Innovation in project management practices:a case of Indian organization in the petroleum industry

The Indian petroleum industry is passing through a very dynamic business environment due to the liberalisation of many government policies, vertical integration among organisations and the presence of multinational companies. This caused a competitive environment among the organisations in the Indian petroleum industry in the public sector. Effective project management for developing new infrastructures and maintaining the existing facilities has been considered one of the means for remaining competitive in this business environment. However, present project management practices suffer from many shortcomings, as time, cost and quality non-achievements are part and parcel of almost every project. This study focuses on identifying the issues in managing projects of the organisation in the Indian petroleum sector with the involvement of the executives in a workshop environment. This also suggests some remedial measures for resolving those issues through identifying critical success factors and enablers. The enablers not only resolve the present issues but also ensure superior performance. These are analysed in a quantitative framework to derive improvement measures in project management practices.

A risk-based model for inspection and maintenance of cross-country petroleum pipeline

The existing method of pipeline health monitoring, which requires an entire pipeline to be inspected periodically, is both time-wasting and expensive. A risk-based model that reduces the amount of time spent on inspection has been presented. This model not only reduces the cost of maintaining petroleum pipelines, but also suggests efficient design and operation philosophy, construction methodology and logical insurance plans. The risk-based model uses Analytic Hierarchy Process (AHP), a multiple attribute decision-making technique, to identify the factors that influence failure on specific segments and analyzes their effects by determining probability of risk factors. The severity of failure is determined through consequence analysis. From this, the effect of a failure caused by each risk factor can be established in terms of cost, and the cumulative effect of failure is determined through probability analysis. The technique does not totally eliminate subjectivity, but it is an improvement over the existing inspection method.

Multiple attribute decision making approach to petroleum pipeline route selection

Petroleum pipelines are the nervous system of the oil industry, as this transports crude oil from sources to refineries and petroleum products from refineries to demand points. Therefore, the efficient operation of these pipelines determines the effectiveness of the entire business. Pipeline route selection plays a major role when designing an effective pipeline system, as the health of the pipeline depends on its terrain. The present practice of route selection for petroleum pipelines is governed by factors such as the shortest distance, constructability, minimal effects on the environment, and approachability. Although this reduces capital expenditure, it often proves to be uneconomical when life cycle costing is considered. This study presents a route selection model with the application of an Analytic Hierarchy Process (AHP), a multiple attribute decision making technique. AHP considers all the above factors along with the operability and maintainability factors interactively. This system has been demonstrated here through a case study of pipeline route selection, from an Indian perspective. A cost-benefit comparison of the shortest route (conventionally selected) and optimal route establishes the effectiveness of the model.

Analytic hierarchy process analyses risk of operating cross-country petroleum pipelines in India

The existing method of pipeline health monitoring, which requires an entire pipeline to be inspected periodically, is both time-wasting and expensive. A risk-based model that reduces the amount of time spent on inspection has been presented. This model not only reduces the cost of maintaining petroleum pipelines, but also suggests an efficient design and operation philosophy, construction methodology, and logical insurance plans. The risk-based model uses the analytic hierarchy process (AHP), a multiple-attribute decision-making technique, to identify the factors that influence failure on specific segments and to analyze their effects by determining probability of risk factors. The severity of failure is determined through consequence analysis. From this, the effect of a failure caused by each risk factor can be established in terms of cost, and the cumulative effect of failure is determined through probability analysis. The technique does not totally eliminate subjectivity, but it is an improvement over the existing inspection method.

Integrated project management in Indian petroleum industry

The Indian Petroleum Industry is passing through a very dynamic business environment due to liberalization. Effective project management for developing new infrastructures and maintaining the existing facilities has been considered as one of the means for remaining competitive but these practices suffer from many shortcomings, as time, cost and quality non-achievements are part and parcel of almost every project. This study focuses on identifying the specific causes of project failure by demonstrating first the characteristics of projects in Indian Petroleum industry and suggests some remedial measures for resolving these issues. The suggested project management model is integrated through information management system and demonstrated through a case study.

Hierarchical approach to project planning:the case of a petroleum pipeline construction

Projects exposed to an uncertain environment must be adapted to deal with the effective integration of various planning elements and the optimization of project parameters. Time, cost, and quality are the prime objectives of a project that need to be optimized to fulfill the owner's goal. In an uncertain environment, there exist many other conflicting objectives that may also need to be optimized. These objectives are characterized by varying degrees of conflict. Moreover, an uncertain environment also causes several changes in the project plan throughout its life, demanding that the project plan be totally flexible. Goal programming (GP), a multiple criteria decision making technique, offers a good solution for this project planning problem. There the planning problem is considered from the owner's perspective, which leads to classifying the project up to the activity level. GP is applied separately at each level, and the formulated models are integrated through information flow. The flexibility and adaptability of the models lies in the ease of updating the model parameters at the required level through changing priorities and/or constraints and transmitting the information to other levels. The hierarchical model automatically provides integration among various element of planning. The proposed methodology is applied in this paper to plan a petroleum pipeline construction project, and its effectiveness is demonstrated.

Petroleum pipeline construction planning:a conceptual framework

A cross-country pipeline construction project is exposed to an uncertain environment due to its enormous size (physical, manpower requirement and financial value), complexity in design technology and involvement of external factors. These uncertainties can lead to several changes in project scope during the process of project execution. Unless the changes are properly controlled, the time, cost and quality goals of the project may never be achieved. A methodology is proposed for project control through risk analysis, contingency allocation and hierarchical planning models. Risk analysis is carried out through the analytic hierarchy process (AHP) due to the subjective nature of risks in construction projects. The results of risk analysis are used to determine the logical contingency for project control with the application of probability theory. Ultimate project control is carried out by hierarchical planning model which enables decision makers to take vital decisions during the changing environment of the construction period. Goal programming (GP), a multiple criteria decision-making technique, is proposed for model formulation because of its flexibility and priority-base structure. The project is planned hierarchically in three levels—project, work package and activity. GP is applied separately at each level. Decision variables of each model are different planning parameters of the project. In this study, models are formulated from the owner's perspective and its effectiveness in project control is demonstrated.

Planning for project control through risk analysis:a case of petroleum pipeline laying

Projects that are exposed to uncertain environments can be effectively controlled with the application of risk analysis during the planning stage. The Analytic Hierarchy Process, a multiattribute decision-making technique, can be used to analyse and assess project risks which are objective or subjective in nature. Among other advantages, the process logically integrates the various elements in the planning process. The results from risk analysis and activity analysis are then used to develop a logical contingency allowance for the project through the application of probability theory. The contingency allowance is created in two parts: (a) a technical contingency, and (b) a management contingency. This provides a basis for decision making in a changing project environment. Effective control of the project is made possible by the limitation of the changes within the monetary contingency allowance for the work package concerned, and the utilization of the contingency through proper appropriation. The whole methodology is applied to a pipeline-laying project in India, and its effectiveness in project control is demonstrated.

New York mark-ups on petroleum products

In this paper we analyse rigidities in the behaviour of the mark-up on regular, midgrade and premium varieties of petrol in the New York area using a set of weekly frequency data and a methodology that analyses the pricing process using deterministic and stochastic techniques. The results are consistent across methodologies and indicate that the speeds of adjustment to the long-run equilibrium mark-up differ across varieties of petrol with margins of the premium variety falling faster than they rise, contrary to the popular claim of welfare-decreasing asymmetries in price transmission. © 2012 The Authors. The Manchester School © 2012 Blackwell Publishing Ltd and The University of Manchester.

Price transmission in the EU wholesale petroleum markets

This article employs nonlinear smooth transition models to analyze the relationship between upstream and midstream prices of petroleum products. We test for the presence of nonlinearities in price linkages using both weekly series constructed using official EU procedures and also daily industry series applied for the first time. Our results show that the estimated shape of the transition function and equilibrium reversion path depend on the frequency of the price dataset. Our analysis of the crude oil to wholesale price transmission provides evidence of nonlinearities when prices are observed with daily frequency. The nature of the nonlinearities provides evidence in support of the existence of menu costs or, more generally, frictions in the markets rather than supply adjustment costs. This result differs from that found for the U.S. petroleum markets. © 2012 American Statistical Association.

Asymmetric price transmission in EU petroleum markets

This research investigates the determinants of asymmetric price transmission (APT) in European petroleum markets. APT is the faster response of retail prices to cost increases than to cost decreases; resulting in a welfare transfer from consumers to fuel retailers. I investigate APT at 3 different levels: the EU, the UK and at the Birmingham level. First, I examine the incidence of asymmetries in the retail markets of six major EU countries; significant asymmetries are found in all countries except from the UK. The market share data suggest that asymmetries are more important in more concentrated markets; this finding supports the collusion theory. I extend the investigation to 12 EU countries and note that APT is greater in diesel markets. The cross-country analysis suggests that vertical and horizontal concentration at least partly explains the degree of asymmetry. I provide evidence justifying scrutiny over retail markets’ pricing and structure. Second daily data unveil the presence of APT in the UK fuel markets. I use break tests to identify segments with different pricing regimes. Two main types of periods are identified: periods of rising oil price exhibit significant asymmetries whilst periods of recession do not. Our results suggest that oligopolistic coordination between retailers generate excess rents during periods of rising oil price whilst the coordination fails due to price wars when oil prices are going downwards. Finally I investigate the pricing behaviour of petroleum retailers in the Birmingham (UK) area for 2008. Whilst the market structure data reveals that the horizontal concentration is higher than the national UK average, I find no evidence of APT. In contrast, I find that retail prices are sticky upwards and downwards and that firms with market power (majors and supermarkets) adjust their prices slower than other firms.

Multi-media filtration for removal of petroleum contamination

A pilot scale multi-media filtration system was used to evaluate the effectiveness of filtration in removing petroleum hydrocarbons from a source water contaminated with diesel fuel. Source water was artificially prepared by mixing bentonite clay and tap water to produce a turbidity range of 10-15 NTU. Diesel fuel concentrations of 150 ppm or 750 ppm were used to contaminate the source water. The coagulants used included Cat Floc K-10 and Cat Floc T-2. The experimental phase was conducted under direct filtration conditions at constant head and constant rate filtration at 8.0 gpm. Filtration experiments were run until the filter reached its clogging point as noted by a measured peak pressure loss of 10 psi. The experimental variables include type of coagulant, oil concentration and source water. Filtration results were evaluated based on turbidity removal and petroleum hydrocarbon (PHC) removal efficiency as measured by gas chromatography. Experiments indicated that clogging was controlled by the clay loading on the filter and that inadequate destabilization of the contaminated water by the coagulant limited the PHC removal. ^

Petroleum taxation contingent on counter-factual investment behaviour

ACKNOWLEDGMENTS We thank the referees for constructive suggestions. Thanks are due to Norwegian Research Council (Petrosam 2) for financial support.