W10_AEP_Monitoring the well work operation using Earned Value


Problem identification

Well servicing operation performed on the hydrocarbon well has two objectives: finding out how the status of the well itself or the reservoir is evolving, and maintaining or adapting the well to keep the best possible operating conditions. Well servicing operations are done over the field’s lifetime. The operations that may have to be carried out on a well are numerous and can be broken down into measurements, maintenance, and workover.

Monitoring a well servicing operation is different with well drilling monitoring. A drilling operation performance can be measured by following the Time-Depth-Cost (TDC) curve. A plateau shown in the depth curve over the time indicates a non productive time (NPT). While a well drilling means a well construction, a well servicing is done in a constructed well. It means that TDC curve is not a suitable to measure well servicing performance.

Development of alternatives

Monitoring the well servicing performance can be done by daily wellwork report. Put the summary information into a balance activity table which compare the plan and actual condition, both in time and cost terms. This activity table is similar to Work Breakdown Structure (WBS) The cost then plotted in a cost versus time curve reflecting every task which is done, ongoing, and predicted. An earned value (EV) curve can be derived from this information.

Development of prospective outcomes

A set of information is retrieved from the 7th day of workover activities in an offshore platform. A balance activity table is created and shown as below:

Table 1. Activities, Plan versus Actual

Table 1. Activities, Plan versus Actual

A cost versus time curve reflecting every task which is done, ongoing, and predicted shown in the picture 1.

Picture 1. Cost versus Time Chart and Prediction

Picture 1. Cost versus Time Chart and Prediction

When we put an earned value, the curve will be look as below:

Picture 2. Cost versus Time + Earned Value Chart

Picture 2. Cost versus Time + Earned Value Chart

Selection of the acceptable criteria.

The monitoring curve must show the following: equal value of work to its budget, equal value of the project equity to the budget planned for the work done, stay on schedule

Analysis and comparison of alternatives.

Table 1 shows a balance of activities which are planned, ongoing and left. We can see an acceleration for some tasks which are skiped due to not applicable condition. But we can also see a task not yet performed 100% due to wait on weather. A predictive cost at completion is based on the activities that are not performed yet. This method predicts the well work will be completed for another 2 days with additional cost of 10% from its original budget. Although Picture 1 is plotting this information, but it does not show the real performance of the well work.

The table is then expanded to follow earned value concept as shown in Picture 2. This predicting the well work will be finished within the budgeted time and cost. The difference is come from the acceleration performed in the beginning of the work. With the earned value concept the consecutive following days until the work actually completed, are put in the table and plotted in the curve, shown in Picture 3.

Picture 3. Actual cost versus time chart

Picture 3. Actual cost versus time chart

Again, some acceleration is done during completing the wellwork. Although 2 additional days are needed to complete this work, the cost is under budget. Applying earned value concept for the wellwork helps the cost monitoring more reliable. Without EV analysis, the estimate at completion recommends the project to be re-baselined. Using EV analysis in predicting the estimate at completion recommends no longer need to the project revision.

Selection of the preferred alternative

The earned value curve  is preferred as a monitoring tool, which shows equal value of work to its budget, equal value of the project equity to the budget planned for the work done, and keep stay on schedule. 

Performance monitoring and postevaluation of results

The most common reason for not using earned value analysis is “I have not got the time”. While proper project plan preparation will let this analysis without additional effort. However, to have a worked and successful application of earned value in any project is  having complete requirements and a good project plan, which includes the WBS to fully document scope, and a schedule and cost estimate that is integrated to the WBS.

References

Humphreys, G. C. (2011). Project management using earned value (2nd ed.). Orange, CA: Humphreys & Assoc.

Lewis, J. P. (2011). Project planning scheduling & control: The ultimate hands-on guide to bringing projects in on time and on budget. New York: McGraw-Hill.

Lukas, J. A. (2008). EVM.01 Earned Value Analysis – Why it Doesn’t Work. 2008 AACE INTERNATIONAL TRANSACTIONS. Retrieved from http://www.icoste.org/LukasPaper.pdf‎

Stratton, R. W. (2009). Predicting Project Completion Date Using Earned Value Management.AACE International 2009 Spring Symposium. Retrieved from http://www.earnedschedule.com/Docs/Ray%20Stratton%20AACE%20Presentation.pdf

Advertisements

2 Comments

Filed under Afriandi EP, Week 10

2 responses to “W10_AEP_Monitoring the well work operation using Earned Value

  1. EXCELLENT case study, Pak Andi and you did a good job on your analysis. My only concern (and my challenge to you) is why is your CPI so high? 650k/525k = 1.24 CPI. Given that the “BEST PRACTICE” targets are 0.95 to 1.05 (See http://goo.gl/bQrlw, Table 1 on page 8) is a CPI of 1.24 good or not? What does a CPI that high mean in terms of CAPITAL ALLOCATION? What should you be doing about it for future projects? (See http://goo.gl/bQrlw Case Study, pages 11 and 12)

    Bottom line- you are DEFINITELY on the right track but you need to understand that a CPI that high is a sign that the projects are being PADDED too much and that if this continues, then the budgets for these projects should be reduced so that the CPI (and SPI) fall within the green or at least the yellow parameters shown in Table 1 on page 8 of my paper.

    Keep up the good work and looking forward to seeing more postings like this. BTW, if you would cite the chapters and pages from Humphrey’s you could be claiming CREDIT for many of the problems you have been assigned……. Work SMART, not HARD…..

    BR,
    Dr. PDG, Jakarta

    • Thank you Doc! I will probably write about this high of CPI in another blog, God willing. At a glance, the budget proposal usually is submitted and approved long before the execution. We, sometime allowing contingency plan to be put in the budget. Some optimization can be done if the actual work condition allowing to do so. The only thing we can do for the future works is reducing the next budget proposals of the similar job based on the actual performance.

      about the chapter(s) i use from Humphrey to generate this blog is coming from several chapters in Section 4: Chapter 27 to Chapter 32. please advise for this multi chapter citation.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s