The impact of scope changes on turnaround schedule and cost in the Oil Refinery Industry.

Abstract

The number of deviations submitted to the turnaround team after the scope freeze dates and during turnaround caused a great concern to Engen Refinery, as it has a potential to put stress to the already committed resources, delays schedule and increase in turnaround overall cost. This study examined the turnaround processes on the change in the scope of work and their contributing factors on turnaround schedule and cost in the oil refinery industry. Furthermore, the research investigated the possible factors that could be considered to address the change in scope during turnaround, thus limiting the number of deviations during turnaround. To achieve these factors, the qualitative and exploratory research approach was employed to the Engen Refinery case study. The targeted population of the study included seventeen participants from Engen Refinery who were purposively selected to take part in the interview session. The sample included nine participants which included the professionals from different sub-departments in the Maintenance and Turnaround Department. The sample had two managers and seven Senior Personnel’s, mostly Engineers and one Lead Supervisor. In-depth, semi-structured interviews were done telephonically, where each participant consent first for being recorded and the recordings were transcribed into word document. The transcribed data was analysed using the Thematic Analysis which utilises the six-phase process of data analysis. There were twelve themes which were created and were utilised to analyse the data received from the interview. The theory underpinning this study is the “Theory of Triple Constrains” which relates to the project success or failure. The theory defines the need to satisfy the customer requirements at an agreed schedule and estimated cost. However, this theory does not give guidance on project success or failure when the customer initiated the change in scope which is the main weakness in theory. Therefore, this study assumes the customer requirements are fixed irrespective who request the change. The research study results are tested against the theory of constrains. The research study results indicated that the change in scope after the freeze dates and during turnaround delayed the schedule and increased the overall cost of the turnaround. The contributing factors included the mismanagement of the deviations process, the “known unknowns” and the diversified work culture displayed during turnaround. The “known unknown” were found to be the leading cause of schedule delays and increase in turnaround cost and are contributed by not doing required inspections, and lack of skills and experience of personnel conducting the scope. Not able to clearly define the scope was the cause of change in scope which could be as a result of competency in scope definition. The behaviours, attitude and mindset displayed towards turnaround and during turnaround have a potential to increase cost and delays schedule if not managed properly. The study was limited to Maintenance and Turnaround Department at Engen Refinery which only included the most experienced individuals in the department, focused on changes in turnaround work scope on schedule and cost, and therefore does not represent the overall view of people working in the Oil Refinery and those researching the Turnaround strategies in Oil and Gas sector, therefore the results cannot be generalised. The research outcome may assist turnaround project teams on the impact of changing the turnaround scope of work on the schedule and cost. Those who develop turnaround strategies, scholars, future researchers will find great value of this study on the impact of changing the turnaround scope during or towards the start of the turnaround.