NNPC Project Sanctioning and Approval Procedure Manual Volume 1 PDF

Fo R e r s N O tri ot nl ct i to ne ed be U D o s Pr e cu in On m te ly en d t PROJECT SANCTIONING AND APPROVAL PROCEDURE MANUAL VOLUME 1 Overview Stage 2 PC Stage 1 N N Project Identification Concept Screening Evaluation & Selection Stage 3 FEED/ Execution Planning Stage 4 Engineering, Procurement,...

Fo R e r s N O tri ot nl ct i to ne ed be U D o s Pr e cu in On m te ly en d t PROJECT SANCTIONING AND APPROVAL PROCEDURE MANUAL VOLUME 1 Overview Stage 2 PC Stage 1 N N Project Identification Concept Screening Evaluation & Selection Stage 3 FEED/ Execution Planning Stage 4 Engineering, Procurement, Construction (EPC) Stage 5 Start up, Commissioning /Close-Out Stage 6 Operations & Maintenance Stage 7 Decommissioning & Remediation Fo R e r s N O tri ot nl ct i to ne ed be U D o s Pr e cu in On m te ly en d t PC N N Fo R e r s N O tri ot nl ct i to ne ed be U D o s Pr e cu in On m te ly en d t PC N N Fo R e r s N O tri ot nl ct i to ne ed be U D o s Pr e cu in On m te ly en d t PC N N Table of Contents THE PROJECT MANAGEMENT POLICY............................................................................................. VII NNPC GROUP MANAGING DIRECTOR’S MESSAGE............................................................ VIII 2. BACKGROUND................................................................................................................................ 1 3. INTRODUCTION............................................................................................................................. 3 4. 5. 6. 7. 9. 10. 11. Fo R e r s N O tri ot nl ct i to ne ed be U D o s Pr e cu in On m te ly en d t 1. STRUCTURE OF THE PSAP........................................................................................................... 5 THE PSAP STAGES AND TEMPLATES........................................................................................ 8 PSAP GOVERNANCE STRUCTURE............................................................................................ 19 ENTERPRISE PROJECT MANAGEMENT (EPM) – EPM INTEGRATION............................. 32 GLOSSARY..................................................................................................................................... 38 GLOSSARY OF TERMS AND TERMINOLOGIES..................................................................... 47 APPENDIXES.................................................................................................................................. 55 List of Figures FIGURE 1: PSAP PHASES AND STAGES................................................................................................................... 6 FIGURE 2: THE PSAP STAGES AND TEMPLATES.................................................................................................. 7 FIGURE 3: STAGE 1 PROCESS FLOW DIAGRAM................................................................................................... 9 FIGURE 4: STAGE 2 PROCESS FLOW DIAGRAM..................................................................................................11 FIGURE 5: STAGE 3 PROCESS FLOW DIAGRAM..................................................................................................13 FIGURE 6: STAGE 4 PROCESS FLOW DIAGRAM..................................................................................................15 FIGURE 7: STAGE 5 PROCESS FLOW DIAGRAM..................................................................................................17 FIGURE 8: PSAP OWNERSHIP AND LEADERSHIP STRUCTURE........................................................................19 FIGURE 9: PROJECT GOVERNANCE STRUCTURE FOR CSU/ETD MANAGED PROJECTS...........................22 PC FIGURE 10: PROJECT GOVERNANCE FOR SBU MANAGED PROJECTS..........................................................23 FIGURE 11: MILESTONE CONTROLLERS CONCEPT (COMPLEX/HIGH COST PROJECTS).........................27 FIGURE 12: MILESTONE CONTROLLERS CONCEPT (LOW COST PROJECTS)..............................................27 N N FIGURE 13: PROJECT CATEGORIZATION GUIDE...............................................................................................30 FIGURE 14: PSAP SANCTIONING AND APPROVAL COMPONENT....................................................................31 FIGURE 15: EPM CAPABILITIES..............................................................................................................................33 FIGURE 16: EPM HOME PAGE..................................................................................................................................36 FIGURE 17: SAMPLE PROJECT WORKSPACE......................................................................................................37 List of Tables TABLE 1: SOME KEY MANAGEMENT EXPECTATIONS / ACCOUNTABILITY MATRIX............. 28 TABLE 2: LIMITS OF AUTHORITY............................................................................................................. 29 PROJECT SANCTIONING AND APPROVAL PROCEDURE OVERVIEW v Fo R e r s N O tri ot nl ct i to ne ed be U D o s Pr e cu in On m te ly en d t PC N N N N PC Fo R e r s N O tri ot nl ct i to ne ed be U D o s Pr e cu in On m te ly en d t THE PROJECT MANAGEMENT POLICY The NNPC Project Management Policy signed on November 24 2014 by the Group Managing Director, Dr. Joseph T. Dahwa. PROJECT SANCTIONING AND APPROVAL PROCEDURE OVERVIEW vii NNPC GROUP MANAGING DIRECTOR’S MESSAGE N N PC Fo R e r s N O tri ot nl ct i to ne ed be U D o s Pr e cu in On m te ly en d t 1. 1. PROJECT SANCTIONING AND APPROVAL PROCEDURE OVERVIEW viii 2. BACKGROUND Organizations embark on projects to meet strategic objectives and to grow or sustain the business through achieving the following: Creation of new business opportunities  Expansion of existing facilities  Improving health, safety and environmental conditions  Maintaining the company’s market share through rehabilitation and upgrading of existing Fo R e r s N O tri ot nl ct i to ne ed be U D o s Pr e cu in On m te ly en d t  facilities  Improving stakeholders relationships and corporate social responsibility In the Oil and Gas Industry, capital projects usually involve a substantial part of the business resources and proper management of the resources is crucial to bringing about value addition for organizational growth and profitability. The Nigerian National Petroleum Corporation (NNPC) embarks on many capital projects in the upstream, midstream and downstream value chain of the Nigerian Oil and Gas. In the near to medium terms, the Corporation will be spending billions Naira annually on capital projects. The objectives of these projects are to either provide facilities to grow, to enhance NNPC’s core business or to provide enabling environments for its businesses to thrive. Subsequent to the golden era when NNPC constructed the refineries and other major projects, the Corporation has recorded low performance on capital projects. Key issues in capital projects delivery include poor scoping, inadequate governance, absence of clear PC and systematic methodology, and schedule and cost overruns. On August 17, 2011, the NNPC’s Group Executive Committee (GEC) approved the development of a framework to efficiently plan, obtain relevant management sanctions and successfully execute N N projects in line with international best practice. The framework was named: Project Sanctioning and Approval Procedure (PSAP). The PSAP Project Team was inaugurated on 25th October, 2011, to develop and roll out templates/toolkit to guide project management and execution in NNPC. The team consisting of staff from across the Corporation, placed under the Leadership of Engr. Shuaibu Otori, the then Special Adviser (Upstream) to the Honorable Minister for Petroleum Resources, was constituted to commence the first phase of the assignment. The PSAP Team also had a Steering Committee and received further support from the Corporate Transformation Office. The Enterprise Project Management (EPM) was introduced to enable the PSAP run on an electronic platform. PROJECT SANCTIONING AND APPROVAL PROCEDURE OVERVIEW 1 The PSAP framework is part of NNPC’s transformation efforts towards improving project delivery and better capital expenditure utilization. The PSAP also seeks to improve NNPC’s project performance, quality, ensure transparency, effective project endorsement and execution. The Project Sanctioning and Approval Procedure (PSAP) Toolkits/Templates have been developed as a tool to guide project management practice across the Nigerian National Petroleum Corporation Fo R e r s N O tri ot nl ct i to ne ed be U D o s Pr e cu in On m te ly en d t (NNPC). It is intended to provide solutions and guidance by streamlining and standardizing the project execution processes towards efficient management of Capital Expenditure (CAPEX) of NNPC. The Toolkits/Templates Manual is relevant to all manner of projects (greenfield or brownfield) and it is for use by Business Development Managers, Project Managers and Project Management Teams in the management and execution of projects from identification to N N PC decommissioning. PROJECT SANCTIONING AND APPROVAL PROCEDURE OVERVIEW 2 3. INTRODUCTION The Project Sanctioning and Approval Procedure (PSAP) is a stage-gate Project Management System whereby implementation of a project is divided into stages separated by gates. Transition through a gate to the next stage requires the sanction of the Milestone Controller Team (MCT)/Gate Keeper and approval of the relevant approving body.  Fo R e r s N O tri ot nl ct i to ne ed be U D o s Pr e cu in On m te ly en d t The use of PSAP in NNPC will: Ensure transparent and effective project development and execution by exercising appropriate controls at the required levels       Enable clear assignment of responsibilities along the project value chain Minimize risk and avert project failures Optimize existing opportunities Ensure effective funds utilization. Enhance project management skills across NNPC Place NNPC in the league of NOCs/IOCs with best practice project management system In the development of the PSAP Toolkits/Templates, the output from previous NNPC initiatives in the area of Project Management systems – the Capital Expenditure Project Management System (CEPMS) document (which was an outcome of the Project PACE initiative) and existing project management practices and documents were reviewed. The Team also conducted extensive research on best project management practices. The objective was to institute best practices in project management capability and performance consistent with NNPC‘s business needs. As part of the process, two sessions of reviews were conducted on the PSAP Toolkits/Template by identified project management related Subject Matter Experts (SMEs) drawn from SBUs and CSUs across the PC Corporation in order to ensure that they are applicable to all circumstances in the corporation. A total of seventy-two (72) templates were arrived at after various review exercises. These now N N constitute the contents of the PSAP 7-Stage Manual. These Toolkits/Templates are the basis of the automation/workflow configuration carried out with the Microsoft Enterprise Project Management/System (EPM). The PSAP Manual is presented in five (5) volumes viz:  Volume 1: Overview of PSAP, Project Management Practices and PSAP Acronyms guide  Volume 2: Development Planning Phase Templates  Volume 3: Project Execution Phase Templates  Volume 4: Project Execution Phase Templates  Volume 5: Operations Phase Templates This document is volume 1 of the PSAP manuals. PROJECT SANCTIONING AND APPROVAL PROCEDURE OVERVIEW 3 On 20th November 2014, the PSAP package was presented to TMC which granted approval for the following: The implementation and adoption of PSAP on all new and on-going projects corporate-wide;  The NNPC project Management Policy;  The Project Categorization Guide and Project Governance Structure;  The incorporation of PSAP Project Categorization Guide in the NNPC Delegation of Authority Fo R e r s N O tri ot nl ct i to ne ed be U D o s Pr e cu in On m te ly en d t  Guide (DOAG). Additionally, TMC endorsed for higher management approval, the following: 3.1. Establishment of a PSAP Coordination Office; Implementation of a ‘new ETD’. PSAP Project Organization The PSAP Project Organization in Appendix II shows the composition and organization of the project resources during the Templates/Toolkits Development Phase of the Project while the project organization in Appendix III shows the composition and organization of the project resources during the corporate-wide roll-out and deployment efforts. In both cases, Team Members and Subject Matter Experts (SMEs) were selected from amongst the SBUs/CSUs. This work has been developed with in-house expertise and has taken into consideration the peculiar N N PC experiences of the Corporation. PROJECT SANCTIONING AND APPROVAL PROCEDURE OVERVIEW 4 4. STRUCTURE OF THE PSAP The Project Sanctioning and Approval Procedure (PSAP) is the project management methodology of NNPC for managing projects. It is a defined combination of logically related methods and step-bystep techniques for successful planning, control and delivery of the project. PSAP has an in-built mechanism that tracks projects from initiation all through to execution, as well as eventual Fo R e r s N O tri ot nl ct i to ne ed be U D o s Pr e cu in On m te ly en d t decommissioning through the use of the following: Project Categorization – Defining project execution complexity in relation to limits of authority of the Corporation  Gate system of project management and execution  Delineation of project activities in the development and execution phases into milestones  Project Governance Structure In order to provide a pathway to avoid failure, reduce risks and guide project teams through development and implementation activities in well-defined phases of the project implementation lifecycle, the PSAP is structured into seven (7) stages. The seven stages of the PSAP are further decomposed into activities for which the PSAP Toolkits/Templates are applicable as shown in Figures 1 and 2. Seventy two (72) Templates have been developed to guide project management N N PC teams on how to carry out these activities during project planning and delivery. PROJECT SANCTIONING AND APPROVAL PROCEDURE OVERVIEW 5 Fo R es r N O tri ot nl ct to ine ed be U D o s Pr e cu in On m te ly en d t N N PC Figure 1: PSAP Phases and Stages PROJECT SANCTIONING AND APPROVAL PROCEDURE OVERVIEW 6 Fo R es r N O tri ot nl ct to ine ed be U D o s Pr e cu in On m te ly en d t N N PC Figure 2: The PSAP Stages and Templates Templates in red fonts are applicable to all Stages PROJECT SANCTIONING AND APPROVAL PROCEDURE OVERVIEW 7 5. THE PSAP STAGES AND TEMPLATES 5.1. STAGE 1: Project Identification This is the stage at which an opportunity is identified in line with corporate strategic objectives and goals. This phase will usually be initiated at the CSU or SBU level by Fo R e r s N O tri ot nl ct i to ne ed be U D o s Pr e cu in On m te ly en d t the business development unit and the activities therein will largely be executed at those levels with or without assistance from Corporate Headquarters. Some of the activities to be undertaken at this stage involve:  Idea Generation  Definition of project goals and objectives  Pre- feasibility studies  Classification of Project opportunities e.g. business growth, compliance, new technology. etc.  Definition of basic technical parameters  Demonstration of value (strategic fit) The key deliverables for this stage are:  The Project Proposal document  The Business Case document  The Project Charter N N PC The process flow for Stage 1 is shown in Figure 3. PROJECT SANCTIONING AND APPROVAL PROCEDURE OVERVIEW 8 Fo R es r N O tri ot nl ct to ine ed be U D o s Pr e cu in On m te ly en d t N N PC Figure 3: Stage 1 Process Flow Diagram PROJECT SANCTIONING AND APPROVAL PROCEDURE OVERVIEW 9 5.2. STAGE 2: Concept Screening/Evaluation & Selection At this stage, the various means or concepts for achieving the objectives of project opportunity in Stage 1 are identified. This is the stage at which various concepts are considered and evaluated in order to select the best opportunity in line with corporate Fo R e r s N O tri ot nl ct i to ne ed be U D o s Pr e cu in On m te ly en d t objectives. Some of the activities at the stage are:  Definition of technical operability parameters  Conducting technical and economic sensitivity analysis on the concepts  Ranking of concepts based on Technical, Economic, Commercial, Operations and Political (TECOM) parameters  Selection of concepts based on established parameters including risks  Detailed feasibility studies  EIA study Some of the key deliverables of this stage are:  The Detailed Feasibility Study Report  The EIA study report  Several plans – security plan, preliminary Execution plan, etc.  Categorized Project and a determination of the requirement (or nonrequirement) of the PSAP Certificate of No Objection (CNO) N N PC The process flow for stage 2 is shown in Figure 4. PROJECT SANCTIONING AND APPROVAL PROCEDURE OVERVIEW 10 Fo R es r N O tri ot nl ct to ine ed be U D o s Pr e cu in On m te ly en d t N N PC Figure 4: Stage 2 Process Flow Diagram PROJECT SANCTIONING AND APPROVAL PROCEDURE OVERVIEW 11 5.3. STAGE 3: Front End Engineering Design and Execution Planning Once the concept has been selected, the basic engineering designs and drawings are prepared as a basis for further detailed engineering works. Also at this stage, the planning for activities required for successful execution of the project is carried out, Fo R e r s N O tri ot nl ct i to ne ed be U D o s Pr e cu in On m te ly en d t the contracting strategy is selected and activities in the contracting cycle commenced. The following are the key activities that take place:  Execution of the Front End Engineering Design (FEED)  Selection of the contracting strategy  Development of contracting plan  Preparation of project execution plans  Negotiations and preparation of commercial agreements  Commencement of contracting cycle activities  Initiating procurement of long lead items Some of the key deliverables of this stage are:  The FEED scope and execution strategy document  Tendering documentation  Project execution plan  Contract document and contract award N N PC The process flow for Stage 3 is shown in Figure 5. PROJECT SANCTIONING AND APPROVAL PROCEDURE OVERVIEW 12 Fo R es r N O tri ot nl ct to ine ed be U D o s Pr e cu in On m te ly en d t N N PC Figure 5: Stage 3 Process Flow Diagram PROJECT SANCTIONING AND APPROVAL PROCEDURE OVERVIEW 13 5.4. STAGE 4: Project Execution (Engineering, Procurement and Construction) The conclusion of contracting for the project usually marks the commencement of this stage. The detailed engineering designs are done and procurements for materials and services are commenced and monitored. Also the construction works are executed and Fo R e r s N O tri ot nl ct i to ne ed be U D o s Pr e cu in On m te ly en d t monitored until completion for compliance mainly with the Engineering and Design parameters as well as expected quality of the deliverables. All the plans developed in Stage 3 are realized at this stage. Partial commissioning of equipment and systems also take place at this stage and commissioning and operations personnel start getting more actively involved in the project. At the end of this stage, the project is completed and, made ready for commissioning and final delivery for operations. Some of the key activities at this stage are:  Execution of detailed engineering design  Implementation and monitoring of procurement  Realization of project execution plan – construction, procurements, cost management, risk management, Safety, Health, Environment and Security considerations, etc.  Execution and monitoring of construction works  Identification, engagement and training of operations and maintenance personnel  Conduct of pre-commissioning activities It is to be noted that generally, activities run concurrently at this stage. A key PC deliverable of this stage is the Signing off of Completion Certificate. N N The Stage 4 process flow diagram is shown in Figure 6. PROJECT SANCTIONING AND APPROVAL PROCEDURE OVERVIEW 14 Fo R es r N O tri ot nl ct to ine ed be U D o s Pr e cu in On m te ly en d t N N PC Figure 6: Stage 4 Process Flow Diagram PROJECT SANCTIONING AND APPROVAL PROCEDURE OVERVIEW 15 5.5. STAGE 5: Start-up/Commissioning Upon completion, the various systems and facilities installed during construction are made to undergo tests in readiness for operations. The commissioning team and operations personnel are very active at this stage. Documentation for project handover Fo R e r s N O tri ot nl ct i to ne ed be U D o s Pr e cu in On m te ly en d t to Operations including as-built drawings is finalized. The Project Close-out activities also commence. The key activities are:  Equipment, System and Facility commissioning  Preparation of Handover documentation  Preparation of As-Built drawings/documentation  Preparation of completion certificate  Preparation of Punch list  Technical Close-out of the project Key deliverables of this stage are the production of As-Built Drawings and Completion and Hand Over documents. N N PC The Stage 5 process flow diagram is shown in Figure 7. PROJECT SANCTIONING AND APPROVAL PROCEDURE OVERVIEW 16 Fo R es r N O tri ot nl ct to ine ed be U D o s Pr e cu in On m te ly en d t N N PC Figure 7: Stage 5 Process Flow Diagram PROJECT SANCTIONING AND APPROVAL PROCEDURE OVERVIEW 17 5.6. STAGE 6: Operations and Maintenance After successful commissioning, the project is handed over to the operations group. At this stage, the deliverables of the project, in form of facilities, plants etc., are operated, monitored and maintained to realize the initial objective of the project. This Fo R e r s N O tri ot nl ct i to ne ed be U D o s Pr e cu in On m te ly en d t is done by the personnel whose training commenced during the execution stage (stage 4). Also the final project close-out is achieved at the early part of this stage. The key activities are:  Conclusion of project Close-out  Monitoring of plant or facility operations  Post-Project Audit to ensure the facilities perform as per project objectives.  Running of the plant or facility  Periodic maintenance and upgrade of plant or facility. If these activities lead to the execution of a new project, the PSAP will have to be applied. 5.7. STAGE 7: Decommissioning and Remediation Upon the attainment of the life span of the facility, the stage at which further operation of the plant is no longer profitable or the facility poses a safety risk to workers or the environment, the facility is decommissioned and put out of use. After decommissioning, the environment in which the facility was located is then remediated – returned to as close to its initial state, (before the project commenced) as much as possible. Execution of this stage is a project in itself and must go through PC PSAP stages of development, planning, execution and close-out. This stage will involve the Post Environmental Impact Assessments Studies to achieve success in the decommissioning and remediation. N N Fit for purpose process flow diagrams for these phases should be developed for management and approval as may be required at these stages, as required for each project. PROJECT SANCTIONING AND APPROVAL PROCEDURE OVERVIEW 18 6. PSAP GOVERNANCE STRUCTURE A number of TMC–approved sustainability imperatives have been identified to support the full implementation of the PSAP. These include the following: A Project Governance Structure.  Milestone Controllers Concept   Fo R e r s N O tri ot nl ct i to ne ed be U D o s Pr e cu in On m te ly en d t  Project Classification/Categorization Project Management Policy 7.1 Ownership/Maintenance of the PSAP Process The PSAP toolkits/templates are actually owned by ALL of the Corporation’s Project Management Practitioners. The Toolkits/templates are expected to be a living document with active updates from time to time. The Engineering and Technology Division (ETD) will be enhanced and will provide a day-to-day working group for the PSAP Processes, Toolkits/Templates. ITD will provide the necessary technical support for the electronic platform. They will work with the entire Corporation’s Project Execution Units to drive updates in line with international best practices. Figure 8: PSAP Ownership and Leadership Structure PC GMD System Owner Ensure Total Ownership of PSAP by ALL Units of the Corporation Ensure Alignment and Consensus among Stakeholders PSAP Advisory Council (PAC) Membership: Coordinator, CP&S; GEDs - E&P; R&P; C&I Approves changes to OSAO and obtain GMD's concurrence Approves PSAP Key Performance Indicators (KPIs) Subject Matter Experts (SMEs) Review recommended changes to the PSAP Process Endorse relevant improvements for PAC approval Provide mentoring for project personnel Steering Lead: GGM, ETD Develop PSAP KPIs Management oversight of PSAP Corporate-wide Facilitate PSAP Governance Drive PSAP improvement initiatives PSAP Corporate-wide Interface Managemen The Work Group Help Institutionalize PSAP corporate-wide Best Practices, lessons learnt, New initiatives Capture Drive corporate-wide organization capacity / people development Corporate Wide Organization Capacity Development /People N N PAC SMEs Leadership Group PSAP Coordination Office PROJECT SANCTIONING AND APPROVAL PROCEDURE OVERVIEW 19 7.2 Project Governance Project Governance is a management framework within which project decisions are made in order to position the project for successful completion. It outlines the relationships between all the groups involved in the project, the flow of information Fo R e r s N O tri ot nl ct i to ne ed be U D o s Pr e cu in On m te ly en d t and ensures reviews, sanctions and approvals at appropriate stages of the project; the objective is to ensure delivery of the expected value of the project. The PSAP Governance structure is made of five (5) levels namely: i. Approvals Level: made up of the various approval bodies in line with the NNPC’s Delegation of Authority Guideline (DOAG). ii. Technical/Commercial Sanctioning Level: This is the level where decisions concerning the progression of the project from one stage of the PSAP to another are taken. Also, decisions for consideration at the Approvals level are reviewed and endorsed at this level. The Milestone Controller Teams and senior management staff with direct project management responsibilities play key roles at this level. iii. Project Leadership/Steering Level: Guidance on the management of project is given at this level. This level is responsible for transition from one stage to another, up to the operations phase. The Project Manager escalates issue to this level for resolution. Participants at this level offer leadership support to the Project Manager and do not engage in the day-to-day running of the project. Key roles at this level are the Project Sponsor, the ENGINEER, Project PC Consultants and members of the Project’s Steering Committee. N N iv. Project Management Level: This is the level involved in the day-to-day supervision and control of activities on the project and it is led by the NNPC Project Manager, who is supported by the NNPC Project management team. The NNPC Project Manager provides direct leadership to the PMT and is responsible for the planning and execution of the project. The NNPC Project Management team membership should consist of project related professionals and includes personnel from the project users. The contractor’s project management team is also part of this level. v. Others: Namely the Tender Committees and Stakeholders. All the levels in the Project Governance structure are to interact with the main objective of achieving the delivery of projects to meet the objective of their conception. PROJECT SANCTIONING AND APPROVAL PROCEDURE OVERVIEW 20 7.2.1 Description of Key Roles in the Governance Structure i. Project Sponsor The Project Sponsor could be the head of SBU/CSU or respective Group Executive Director which "owns" and funds the project. The Sponsor is a key Fo R e r s N O tri ot nl ct i to ne ed be U D o s Pr e cu in On m te ly en d t advocate for the project and an active member of the Project Steering Committee. The Sponsor has the ultimate responsibility for seeing that the intended benefits are realized to create the expected value for the business. The Sponsor supports the ENGINEER and Project Manager by facilitating the necessary organizational support needed to make strategic decisions and create a successful project. The Sponsor, however, does not interfere in the day-to-day running of the project. Key responsibilities include: Responsible for securing funding for the project Commitment for the project from other key stakeholders. Issues escalated from the project are solved effectively at the Top Management level. Ensures that the project's outputs will be sustained by ensuring that people and processes are in place to maintain it once the project completes its handover. Figure 9 and Figure 10 show the two major governance structures for NNPC projects. Figure PC 9 depicts the Project Governance Structure for ETD Managed projects while Figure 10 shows N N the Project Governance structure for CSU/SBU Managed projects. PROJECT SANCTIONING AND APPROVAL PROCEDURE OVERVIEW 21 Fo R es r N O tri ot nl ct to ine ed be U D o s Pr e cu in On m te ly en d t N N PC Figure 9: Project Governance Structure for CSU/ETD Managed Projects PROJECT SANCTIONING AND APPROVAL PROCEDURE OVERVIEW 22 Fo R es r N O tri ot nl ct to ine ed be U D o s Pr e cu in On m te ly en d t N N PC Figure 10: Project Governance for SBU Managed Projects PROJECT SANCTIONING AND APPROVAL PROCEDURE OVERVIEW 23 ii. The ENGINEER The ENGINEER (who may also be referred to as the Project Director) is responsible for the management of the project at the strategic level and is the single point of accountability to deliver the project in accordance with the project commitments. The Project Manager reports directly to The ENGINEER, who does Fo R e r s N O tri ot nl ct i to ne ed be U D o s Pr e cu in On m te ly en d t not give direction to the project team directly, but through the Project Manager. The ENGINEER is a Member of the Project Steering Committee The ENGINEER has full authority, within the limits of the established project budget and company operating policies, to make decisions regarding the project’s direction. This role is usually defined in NNPC project contracts agreements, and for corporate projects managed by ETD, the GGM ETD will usually play this role. Key responsibilities include:  Managing, directing and assigning project resources  Approving the various project execution plans  Approving payments for certified work done on the project.  Supports and enables the Project Manager to maintain project execution focus.  Establishing project resource assignments and ensures that the project is properly managed and staffed  Giving mentoring, coaching and leadership to the Project Manager in dealing with project management and operational matters. Project Steering Committee PC iii. The Steering Committee provides direction and guidance, and interacts with other N N key stakeholder groups towards achieving successful outcome of the Project. Its role is advisory to the project and should consist of management representatives from the key organizations within NNPC who are knowledgeable in project management and operations of the project’s deliverables. More broadly, the Project Steering Committee will also include the senior leadership of the contractor to allow for seamless execution of the project by stakeholders. The Steering Committee members are to act collectively as a vocal and visible project champion. Generally they help resolve issues and policy decisions, and endorse scope changes and other major decisions for consideration of approving PROJECT SANCTIONING AND APPROVAL PROCEDURE OVERVIEW 24 authorities. Depending on how the project is organized, the Steering Committee may be involved in providing resources and assist in securing funding. The Project Steering Committee should be appointed at the end of Project Stage 1 once the Project Charter is approved. Key responsibilities include: Determination and creation of organizational structures that will sustain the Fo R e r s N O tri ot nl ct i to ne ed be U D o s Pr e cu in On m te ly en d t  project  Periodic review of project performance  Help resolve key project issues and communicate the issues to the sponsor.  Review and Endorsement of key project decisions for consideration by the approving authorities. iv. Project Manager The Project Manager is generally responsible for the day-to-day management of the project activities and ensuring that all project objectives and deliverables are fully met. Key responsibilities include: Leading the project team to achieve the objectives of the project  Planning and execution of the project activities  Coordinating all the various activities required to deliver the project  Development of the various project plans  Managing the team’s performance of project tasks.  Securing acceptance and approval of deliverables from the Project Sponsor and PC  Stakeholders.  issues that cannot be resolved within the team. N N Communication, including status reporting, risk management and escalation of v. Project Management Team (PMT) The Project Management Team (PMT) is responsible for executing tasks and producing deliverables as outlined in the Project Plans and directed by the Project Manager. The PMT supports the Project Manager to achieve the success of the project and reports solely to the Project Manager. vi. Milestone Controller Teams (MCT) These are teams that review the deliverables at the end of each PSAP stage and endorse transition to the next stage, upon the deliverables meeting the expected criteria. They ensure a seamless transition from one stage to another. PROJECT SANCTIONING AND APPROVAL PROCEDURE OVERVIEW 25 The main task of the Milestone Controller Teams (MCT) is to review and ensure alignment of the technical and commercial fitness of the project to its objective. This is to ensure that the project is on track to deliver the objective for which it was conceived. MCTs are technical and commercial endorsement authorities and not a financial Fo R e r s N O tri ot nl ct i to ne ed be U D o s Pr e cu in On m te ly en d t approval authority. Financial approvals are granted by the various approval bodies as specified in the NNPC Delegation of Authority Guidelines (DOAG). Decisions of MCTs could be any of the following: a. Proceed with the Project to the next stage: This is a go-ahead for the project and recommendation of funds and resources for the next stage. b. Continue work in the current stage: This implies that the MCT is not satisfied with the work/deliverables and more work needs to be done in the current stage. Also it could be as a result of new information being available that alters initial assumptions. c. Return to a previous stage: This decision is taken when new information has become available requiring a review at a previous stage d. Place the Opportunity/Project on hold: This decision could be taken in the event that priorities have changed. e. Abandon or Divest: Abandonment of a project in the event that the Project objectives are negated to the extent that continuation or participation by NNPC in the Project is no longer economically justified. PC Figures 11 and 12 show the recommended composition of the Milestone Controller teams for N N complex/high cost projects and low cost projects respectively. PROJECT SANCTIONING AND APPROVAL PROCEDURE OVERVIEW 26 Fo R e r s N O tri ot nl ct i to ne ed be U D o s Pr e cu in On m te ly en d t Figure 11: Milestone Controllers Concept (Complex/high Cost projects) N N PC Figure 12: Milestone Controllers Concept (Low Cost projects) PROJECT SANCTIONING AND APPROVAL PROCEDURE OVERVIEW 27 Fo R e r s N O tri ot nl ct i to ne ed be U D o s Pr e cu in On m te ly en d t Table 1: Some Key Management Expectations / Accountability Matrix Table 1 above depicts the expectation and accountability matrix for some of the key roles in the governance structure. vii. Project User The Project User is the CSU/SBU that takes custody of the deliverable from the PC project and realizes the intended project benefits. viii. The Tenders Committee drives the tendering processes and makes appropriate N N Tender Committees recommendation to the approving authorities. ix. Contractor A person, company or firm who has gone through the tendering process and has been selected for carrying out works and/or the supply of goods or services at an agreed price, within a specified scope in connection with the project. x. Stakeholders A stakeholder is any person, group of persons or organization(s) that is actively involved in a project, or whose interests may be positively or negatively impacted in the course of the execution or completion of the project. PROJECT SANCTIONING AND APPROVAL PROCEDURE OVERVIEW 28 xi. Approving Bodies These are constituted authorities that are recognized in the NNPC Delegation of Authority guidelines (DOAG) to approve financial expenditure up to specified limits. Fo R e r s N O tri ot nl ct i to ne ed be U D o s Pr e cu in On m te ly en d t Table 2 shows the approval limits of all approving bodies in the DOAG. Table 2: Limits of Authority S/N 1. 7 LIMIT N2.7b and above ($20m and above) NNPC Tenders Board N1.4b < N2.7b ($10m < $20m) Group Executive Committee Tenders Board N540m < N1.4b ($4m < $10m) SBU Board/(DEXCOM) – Tenders Board N270m < N540m ($2m < $4m) SBU MD (MEXCOM)/ Chq Divisional (DIVCOM) - Tenders N70m < N270m Board ($0.5m < $2m) SBU ED (DIVCOM)/ CHQ Departmental – Tenders Board N13.5m < N70m ($0.1m < $0.5m) GMD (Emergency Situation Only)