Capital Construction: IT Investments Pay Off Handsomely

By Elena Zhuk, February 19, 2014

Oil and gas industry, on par with transport, construction and real estate, is a leader in capital construction investments. Moreover, according to forecasts by Russia’s Ministry of Economic Development, investment growth is slated to continue in coming years.

In global rankings measuring information technology’s contribution to GDP, Russia lies at the bottom of the table. And still, there is ground for optimism – from 2010 to 2015, IT expenditure in Russia will grow on average by 18 percent per year, forecasts suggest. Growing investments will push Russia up the global ranks, closer to the middle section of the rankings, though midlevel players won’t stand still, too, Parma-Telecom (ITPS Group) general director Leonid Tikhomirov told the conference “Managing the Lifecycle of a Capital Construction Project. From Green Field to iField,” which was held Nov. 20 in Moscow. Today, IT industry’s growth dynamics is developing at high speed. A forecast by David House (Intel) suggests that performance of computer hardware doubles every 18 months due to a combination of growing number and performance of transistors used there. According to Tikhomirov, dynamics of development are best characterized by the British classic: “Here we must run as fast as we can, just to stay in place. And if you wish to go anywhere you must run twice as fast as that.” Tikhomirov bases his confidence in IT getting proper development in Russia on historically solid R&D base and availability of professional staff.

Defining Value Is Key

The relevance of efficient management of capital construction facilities at all stages of the lifecycle grows alongside investments. Project management experts agree that particular attention must be paid to initial stages used for definition and creation of the project’s value, though quite often just the opposite happens – companies rush into construction almost immediately after the announcement of project schedules. According to Tikhomirov, definition and creation of the project’s value require maximum efficiency, because mistakes at these stages may irreparably damage the result. “Costs in the early stages are small, but their impact on the result is very large,” says Tikhomirov. 

Sergei Budlov, head of well operations at LUKOIL Overseas and the lead of the LIFE-Field (LUKOIL Intelligent Functioning Environment) project, agrees with the expert. “For us, it is very important that project management methodology requires a phased approach to project planning and implementation, and that the project’s basic value is defined at early stages,” says Budlov. “If we don’t have the tools to properly plan our actions for preparation and implementation of a major capital construction project, by the operational stage the result will be worse than what could have been achieved,” he adds. 

One of such tools is IPMS (Integrated Projects Management System), launched by Lukoil Overseas from scratch in 2011. As it tweaks the IPMS methodology, LUKOIL Overseas is introducing the system on parallel tracks at its new fields in Uzbekistan and Iraq.

Management Difficulties? Here’s the Solution!

Successful management of capital construction facilities and contemporary approach to design will succeed only in combination with