OTC-24986-MS

Executing Brownfield Projects

Folkert Visser and Rob Brouwer, Shell Global Solutions International B.V.
Copyright 2014, Offshore Technology Conference
This paper was prepared for presentation at the Offshore Technology Conference Asia held in Kuala Lumpur, Malaysia, 2528 March 2014.
This paper was selected for presentation by an OTC program committee following review of information contained in an abstract submitted by the author(s). Contents of the paper have not been
reviewed by the Offshore Technology Conference and are subject to correction by the author(s). The material does not necessarily reflect any position of the Offshore Technology Conference, its
officers, or members. Electronic reproduction, distribution, or storage of any part of this paper without the written consent of the Offshore Technology Conference is prohibited. Permission to
reproduce in print is restricted to an abstract of not more than 300 words; illustrations may not be copied. The abstract must contain conspicuous acknowledgment of OTC copyright.

Abstract
Brownfield projects are significantly different from greenfield projects due to the fact these have to be executed in an
environment with existing facilities and ongoing operations. This imposes a number of challenges and constraints on the
projects that often result in significant cost overruns and schedule delays if not adequately addressed. The challenge already
starts in the early assess and select phase of a project, in agreeing and defining the scope. Although the project teams focus is
on execution of the main scope (e.g. capacity expansion), the drive in the operations and maintenance team is on
addressing integrity and obsolescence issues and/or addressing changes that are driven by new facilities standards. The
resulting scope creep may affect the economics of the main scope and give rise to a recycle of the concept selected. In the
define phase significant scope and thus cost increases can be expected due to inappropriate scoping and costing practices in
the earlier phases that are based on greenfield concepts. In the execution phase brownfield projects are often affected by a
lack of definition resulting in scope growth, low efficiencies of the brownfield work due to permit and bedding limitations,
poor access to the facilities or simply because of lack of incentives for the contractor to perform. To make a step change in
project performance, these issues need to be identified in a proactive manner for incorporation in projects.
Introduction: The Importance of Brownfield Projects in the Oil & Gas Industry
An increasingly growing percentage of the global portfolio of projects in the Oil & Gas Industry has a significant brownfield
element. The projects can range from major expansions, debottlenecking or rejuvenations in a live plant, to tie-ins of a new
facility into an existing system. As investment in new facilities continues apace with hundreds of billions of dollars each
year, the number of brownfield facilities increases as well, along with the challenges to keep these operational and economic.
The business case for a brownfield project is very diverse. Often there are opportunities from nearby, newly discovered
reservoirs that call for a capacity expansion on the existing facility. The many opportunities for recovering significantly
larger percentages from an oil or gas reservoir will often require extending the operating life of mature assets. Also, the
development and maturing of new technologies to optimize production could make the existing equipment obsolete. Issues
found during routine integrity assessments may lead to substantial repair or modification work. Finally, safety incidents and
compliance to new legislation could cause operators to upgrade their facilities.
What many of these business cases have in common is that if the project is not executed, the existing facility may face
abandonment in the near future because it is no longer economic to operate and maintain. Also, with the prospect of
abandonment getting closer, work may have been disregarded in the previous years, adding significantly to the scope of the
project.
Brownfield projects also share that a project team is performing major construction work in an operating asset. Extended
shutdowns will have a direct production impact whilst there are major safety risks working in a hydrocarbon environment.
Other than in greenfield projects, the contractor has less control of the worksite and will need to be conscious of the many
restrictions that the site poses.
Brownfield projects have some clear advantages over greenfield projects. There is an established organisation operating,
maintaining and supporting the site. Relations and permits with authorities are in place. Most (external) stakeholders are well
known, with their interests understood and managed. In the case of an expansion or a technology opportunity, many elements
and common systems and services of the existing facilities can be used with minimal work, such as utility systems, cranes,

OTC-24986-MS

accommodation and support structure. As with any project, a good alignment between the asset, project team and key
stakeholders, such as partners, is required.
Current Performance
When comparing performance of brownfield projects to that of greenfield projects, it appears that cost and schedule overruns
occur much more frequently and severely in brownfield projects. Cost increases are particularly worrying in the early stages
of project development, up to Final Investment Decision (FID). Even if the business case is still justified at the point of FID,
had the actual costs been estimated early, a different (concept) decision might perhaps have been made or the funds allocated
to other investments providing a higher rate of return. Even worse, if the business case is no longer viable at FID for the
brownfield project, a recycle of the project has to occur and/or divestment and abandonment may turn out to be the better
option. In that case, significant time and resources have been lost.
Research on brownfield projects has indicated that cost increases in the project development phases can be attributed to a
combination of poor scope definition and poor estimating. Scope growth may occur due to unexpected integrity issues, lack
of engineering detail early on, insufficient appreciation of the impact of new standards, poor as-built data, unforeseen
constraints and out of boundary scope matters, which are indirect and unforeseen impacts of the project elsewhere on the
site. The estimate will be inaccurate if the methodology in use has the wrong factors for Non-Productive Time (NPT), does
not consider the un-engineered scope properly or uses inappropriate norms.
Focusing on scope definition and cost estimating will lead to a more predictable outcome for the selected brownfield projects.
The following highlights some of the steps to be taken to address these issues, such that the right portfolio decisions can be
made. In order to further improve the value of brownfield projects, one has to look into other ways to improve the shaping
and subsequent execution of brownfield projects.
Scope Definition
A key challenge in any brownfield project is to understand in which way an existing facility may be affected by the project.
Review of relevant inspection and maintenance records, as-built documentation and systematic surveys of tie-ins, structures,
key equipment and associated systems will be required from the onset to avoid growth in engineering and construction scope.
Surveys may also be required of the subsea infrastructure and submerged parts of the facility. Only with this in-depth
understanding of the facility, will realistic options be developed and surprises during execution avoided. Aspects to look into
include the integrity, remaining life/obsolescence, capacity, ullage, current operating envelope and sparing philosophy of
equipment and systems which may form part of the project. This includes not just process equipment and piping systems, but
also mechanical equipment, safety systems, electrical systems and control and automation systems.
For each concept and for each piece of equipment and system a choice needs to be made as to whether it can be reused as is,
needs to be refurbished, requires to be replaced or must be removed altogether. Maximizing the reuse of existing equipment
and systems is often the most economic solution, although, when developing alternatives and when considering execution
constraints, purchasing new equipment may be preferable. Also, should the project lead to a minimal exceedance of the
capacity of a system or piece of equipment, reusing should not automatically be discarded as an option. Engineering solutions
may be found later on. The need to comply with updated regulations and technical standards will also form part of this
decision making process. At this phase, material handling, deck space, weight and stability constraints need to be known, as
well as potential impact on emergency response, temporary refuge and escape systems. The current case for safety, hazards
register and history of recent incidents must be well understood.
Significant input from the operations and maintenance personnel is required at this stage. They know the asset and its history.
An integrity assessment on a risk based approach is usually required if such has not been kept up to date. Conducting a laser
scan of the facility at this phase will ensure an up-to-date model exists of the facility and will help to verify as-built
conditions. It is also the starting point for future 3D models, which are used to generate concepts, to perform detailed design
and to conduct constructability reviews.
Executability
From the start, execution constraints should also be established, as these may significantly impact the choice of the optimal
concept. This includes determining the availability of beds and surveying the potential work locations to appreciate issues
like access and congestion. A resource loaded schedule is required early on. One must understand the control of work
system on the platform to assess the ability to execute simultaneous operations, to work in restricted areas (e.g. flare) and to
perform hot work. Also, logistics arrangements to transport people and materials to and from the platform and use of
temporary facilities, lifting equipment, warehouses and laydown space must be confirmed. Removal, cleaning and disposal of
hazardous substances offer a significant challenge during construction.
Once the main surveys are done and constraints identified, it is important to define the boundaries of the project. A small

OTC-24986-MS

project on the site that pushes a common system (e.g. control system) over the limit should not necessarily be tasked with
upgrading that common system as well. Also, should significant integrity issues be discovered for which the repair goes well
beyond the initial framing of the project, a decision will need to be made whether that is best dealt with by a separate project.
Some of the challenges presented above, necessitate innovative thinking to minimize work on the platform. Novel
technologies can help improve to allow access, inspection and construction in a safe way.
A critical aspect of the project will be to integrate the schedule with the existing asset schedule, which should include
shutdowns or turnarounds, major maintenance works and other projects that may be executed in the same period. Agreement
on interfaces with these other activities will need to be made and adhered to.
As with any project, only with sufficient preparation will the project become a success and able to deliver on its promise. Due
to the fact that one might tend to think to know what needs to be done on brownfield projects, the level of preparation is
often less than in greenfield projects. It is evident from the long list of uncertainties that need to be removed early on and the
constraints during execution, that front end loading of brownfield projects should actually be relatively better than in
greenfield projects. In reality, it is often worse.
The level of (design) detail required to develop a cost estimate that falls within the inaccuracy range of a given decision gate
needs to be higher in brownfield than in greenfield project. Factors for un-engineered scope used in greenfield projects are no
longer reliable and a bottoms-up cost estimate is required from the onset. Material Take Offs should be available earlier to
minimize the un-engineered scope allowance, resources planned through workfront analysis, norms specific for the location
used and the appropriate (higher) allowances used for activities and NPT (e.g. weather, permitting, breaks).
Contracting and Procurement
A question every project team will have to answer is how to best contract the work. Often a maintenance contractor is already
working on the facility on a long term contract. The contractor will have developed a thorough understanding of the facility,
its history, procedures and people. However, not always will the contractor be able to handle the size and complexity a major
brownfield project. Conversely, contractors specializing in greenfield or modular construction may not have the flexibility
and experience of the asset to allow for an effective execution on a live asset. In any case, it is prudent to maximize the
amount of work done offsite, to make sure it is as complete as possible when it leaves the yard and, where possible, to
perform a trial fit to minimize the risk of extra work once in the field. The contract strategy could also allow for a
combination of contractors where the major off site work is performed by another party than the one that performs the
hookup work in the field. In addition, it can be beneficial to involve the contractor who will execute the project early, as the
contractor may be able to provide valuable insights and experiences during concept select and project definition.
Choosing the contract form and the right remuneration principles is usually dependent on the allocation of risk. A major risk
element in brownfield projects is the productivity of the site work which is subject to a large number of constraints, some of
which are under control of the asset, others by the project owners team and/or the contractor. The challenge is how to get the
best performance of the contractor, the project team and operations in executing a brownfield project and to reduce NPT.
Turning certain scope elements into lump sum packages, fabricating modules offsite or turning a certain part of the facility
into a greenfield area is one way to drive performance. For any part of the scope, excellent front end loading, clear and
detailed scope definition, detailed execution planning and a continuous improvement mindset are key ingredients for success.
In execution, a best in class project progress monitoring system by the contractor will support a low level of NPT.
Excellence
From the above, it is clear that the skills and expertise from staff that needs to be involved in the early phase of brownfield
projects is different from those in greenfield. Whereas in greenfield projects process and concept engineers work with
petroleum engineers to define the concept, in brownfield projects one has to involve a variety of discipline engineers, who
understand the integrity issues and utilities, as well as construction engineers, who appreciate how constraints will affect the
executability of the project. With the added complexity, risks and uncertainties in brownfield projects, the best imaginable
project team is required. Yet with the competition for resources coming from the more eye-catching major greenfield
projects, getting competent project professionals and discipline engineers on the project is a major challenge, both for the
operators and the contractors. Preferably, these people should have experience with the site as well as project management
capabilities. In addition, significant involvement of experienced operations and maintenance personnel is required early on. It
is a significant challenge for the industry to develop, to retain and to allow engineers to excel in brownfield projects.