PREMIER OIL VIETNAM CHIM SAO & DUA FIELD DEVELOPMENT PLANNING - COST / SCHEDULE RISK ANALYTICS TO FIRST OIL

1. Premier Oil (Vietnam) B.V.
INDEPENDENT PROJECT RISKS ASSESSMENT
BLOCK 12W GREENFIELD DEVELOPMENT
CHIM SAO & DUA PROSPECTS
Analyses and Presentation by Angus Macleod MAPM – Head Planning & Risk Management
PRESENTATION TO BLOCK 12W STAKEHOLDERS
SCHEDULE / COST RISKS ASSOCIATED WITH
PROJECT DEVELOPMENT & EXECUTION to 1st OIL
LEGAL NOTE : the material contained in this presentation is PROPRIETARY and CONFIDENTIAL and remains at all times the
INTELLECTUAL PROPERTY of PREMIER OIL (Vietnam) B.V>

2. Block 12W Field Schematic

3. 1. Introduction (Basis of Report)
2. Purpose
3. Methodology
4. Risk Inputs
• Qualitative – Risk Registers / Cost Profiles
• Quantative – 3 point duration estimates / Class 2 Estimate
• Risk Analysis / Outputs
• Quantative – Schedule : Monte-Carlo Simulation in Pertmaster
• Quantative – Cost : Monte-Carlo Simulation in @RISK
• Risk Responses, Monitoring & Control
• What if…………
• Consultant Conclusions
• Schedule / Cost Risk Appendices
• Continuous Value Improvement Process
Contents of Report

4. Defined Project Risk Management an integral part of the Project Management Process
Introduction (Basis of Report)

5. Defined Project Risk Management Process as below
Introduction (Basis of Report contd....)

6. Identified some key components for Project Risk Management sucess
Introduction (Basis of Report)
contd......

7. Identified some key elements to obtain Schedule/Cost risk parameters and implement the
results for PSC and Project Management Decision Making
Introduction (Basis of Report) contd.......

8. Identified Project Risk Management Process as a Six Stage Cycle
Introduction (Basis of Report) contd ....

9. Identified the relationships between 6 stage Project Risk Management Process
Introduction (Basis of Report) contd ......
Total Schedule / Cost Effect (+ / -) of Risk

10. Purposes of this Report
• Provide historical basis for schedule/cost risk identification /mitigation
• Map the process of Risk Management used to optimise risk mitigations
• Illustrate consolidated risks that pertain to Execution of the Project
• Identify risks as threats / opportunities to optimise schedule/cost to 1st
Oil
• Illustrate the effective use of qualitative and Quantative methodologies used to
optimise risk mitigation
• Provide a basis for PSC decision-making processes with regard to
• Critical Path(s) to 1st
Oil ( based on probabilistic analyses)
• Mitigation of Schedule/Cost “sensitivities”
• Criticality of Project Sanction to achieve zero deferred production
• Initiate a “Continuous Value Improvement” Process
Purpose of Risk Report

11. Risk Process Methodology
General
Consolidate Risks and Collect p10,p50,p90 estimates
Developed a flowchart to map the Risk Process & Methodologies used

12. and consequences
LEGEND
Methodology 1 – Qualitative Risk Analysis
Utilised Project Risk Register with “Boston Square Matrix ” technique to model
Qualitative Risk Probability / Impact

13. Methodology 2 – Quantative Risk Analysis
Used Project Risk Register, Boston Square Matrix & p50,p10,p90 range of Activity
durations to run “Monte Carlo” simulations in Pertmaster (Schedule) and @RISK (Cost)

14. Risk Outputs- Deterministic (P50) Schedule – Page 1 of 3
RAN a DETERMINISTIC SCHEDULE in Primavera P6 and tested it in Pertmaster using equal distribution of P50 durations
and confirmed a DETERMINISTIC (unrisked) 1st
OIL DATE OF 25th
May 2010
Original Planned
Project Sanctiom
1st Jul 08
LLI
(pre-FID)
PO's Placed
(Cost Risk)
OPS LLI (pre-FID)
PO's
(Cost Risk)

15. Risk Outputs- Deterministic (P50) Schedule Page 2 of 3
(cont’d) DETERMINISTIC SCHEDULE in Primavera P6 and tested it in Pertmaster using equal distribution of P50 durations
and confirmed a DETERMINISTIC (unrisked) 1st
OIL DATE OF 25th
May 2010
LLI
(pre-FID)
PO's Placed
(Cost Risk)

16. Risk Outputs- Deterministic (P50) Schedule Page 3 0f 3)
(cont’d) DETERMINISTIC SCHEDULE in Primavera P6 and tested it in Pertmaster using equal distribution of P50 durations
and confirmed a DETERMINISTIC (unrisked) 1st
OIL DATE OF 25th
May 2010
Un-risked,
Deterministic
First Oil Date
Cost Risk
pre-FID
Contract
Award
CA Cost /
Schedule
Risk

17. Risk Outputs- Deterministic Distrubtion (P50) Schedule
DETERMINISTIC SCHEDULE in Primavera P6 RAN IN PERTMASTER using equal distribution of P50 durations and
confirmed a DETERMINISTIC (unrisked) 1st
OIL DATE OF 25th
May 2010

18. RAN a PROBABLISTIC SCHEDULE with Monte-Carlo Simulations in PERTMASTER using original Deterministic Critical
Path Schedule + collected 3 point estimates + Post-Mitigated Qualative Risk Registers
Quantative Risk Analysis – Probabilistic Schedule
- Critical Path Report – Page 1 of 5
Project
Sanction
July 08

19. RAN a PROBABLISTIC SCHEDULE with Monte-Carlo Simulations in PERTMASTER using original Deterministic Critical
Path Schedule + collected 3 point estimates + Post-Mitigated Qualative Risk Registers
Quantative Risk Analysis – Probabilistic Schedule
- Critical Path Report – Page 2 of 5

20. RAN PROBABLISTIC SCHEDULE with Monte-Carlo Simulations in PERTMASTER using original Deterministic Critical Path
Schedule + collected 3 point estimates + Post-Mitigated Qualative Risk Registers
Quantative Risk Analysis – Probabilistic Schedule
- Critical Path Report – Page 3 of 5

21. RAN PROBABLISTIC SCHEDULE with Monte-Carlo Simulations in PERTMASTER using original Deterministic Critical Path
Schedule + collected 3 point estimates + Post-Mitigated Qualative Risk Registers
Quantative Risk Analysis – Probabilistic Schedule
- Critical Path Report – Page 4 of 5

22. RAN PROBABLISTIC SCHEDULE with Monte-Carlo Simulations in PERTMASTER using original Deterministic Critical Path
Schedule + collected 3 point estimates + Post-Mitigated Qualative Risk Registers
Quantative Risk Analysis – Probabilistic Schedule
- Critical Path Report – Page 5 of 5
15 Oct 2009- 28 Feb 2010
P50 Marine Installation
Weather Window
P50 First Oil
28 May 2010

23. Risk Outputs “Base Case” Probabilistic Schedule Finish Dates
Extrapolated p10, p50, p90 Probabilistic Finish Dates from PROBABLISTIC SCHEDULE ANALYSIS based on Monte-Carlo
simulation of 3 point duration estimates – and produced 1st
Pass range of 1st
Oil dates
P10 1st Oil Date = 25th
May 2010
P50 1st
Oil Date = 7th July 2010
P90 1st
Oil Date = 26th
Aug 2010
1st Pass p10 p50 p90 “Base
Case”
Probabilistic Dates to 1st
Oil

24. Risk Outputs - Tornado Graph – Schedule Sensitivity Index
“Base Case”
RAN Monte-Carlo Simulations in PERTMASTER and produced TORNADO GRAPHS depicting SCHEDULE SENSITIVITY
INDEX – (Top Ten Schedule Sensitivities)

25. Turner & Townsend–ran DETERMINISTIC SCHEDULE SCENARIOS in Primavera P6 to model the BEST CASE schedule
scenarios under theoretical “what-if” conditions to identify threats to 1st
OIL DATE OF 25th
May 2010
If Project Sanction Delayed by 2
Months then deterministic “best
case” is 1st
Oil delayed by
4 months (deferred production)
What-if….Deterministic Schedule Scenario if Sanction (FID) Delay

26. RAN PROBABLISTIC SCHEDULE SCENARIO in PERTMASTER to model the P50 CASE schedule if Project Sanction
delayed 2 months and P50 net result 1st
OIL DATE slips to Dec 2010
What-if Scenario ….Probabilistic Schedule (P50) if Sanction Delay
(Page 1 of 4)
Jacket &
Topsides LF
delayed until
Q2 2010

27. RAN PROBABLISTIC SCHEDULE SCENARIO in PERTMASTER to model the P50 CASE schedule if Project Sanction
delayed 2 months and P50 net result 1st
OIL DATE slips to Dec 2010
Contigency :
Template drilling
$200k USD
cost trade-off to
maintain drilling
schedule
What-if Scenario ….Probabilistic Schedule (P50) if Sanction Delay
(Page 2 of 4)

28. RAN PROBABLISTIC SCHEDULE SCENARIO in PERTMASTER to model the P50 CASE schedule if Project Sanction
delayed 2 months and P50 net result 1st
OIL DATE slips to Dec 2010
FPSO Contract Award
Schedule “frozen”
pending delayed FID
What-if Scenario ….Probabilistic Schedule (P50) if Sanction Delay
(Page 3 of 4)

29. RAN PROBABLISTIC SCHEDULE SCENARIO in PERTMASTER to model the P50 CASE schedule if Project Sanction
delayed 2 months and P50 net result 1st
OIL DATE slips to Dec 2010
All Jacket &
Topsides heavy
lifts slip to
post-monsoon
2010
Most Likely “Sanction Delay Case”
1st
Oil Date slips 5 months to 24th
Oct 10
What-if Scenario ….Probabilistic Schedule (P50) if Sanction Delay
(Page 4 of 4)
Oct 09 - Feb 10
Weather Window

30. Risk Outputs – Quantative – Probabilistic Schedule Finish Dates
Extrapolated p10, p50, p90 Probabilistic Finish Dates from PROBABLISTIC SCHEDULE ANALYSIS based on Monte-Carlo
simulation of 3 point duration estimates – and produced new range of 1st
Oil dates
“Sanction Delay Case “ Probabilistic Dates to 1st
Oil
P90 1st
Oil Date = 6th
Dec 2010
P50 1st
Oil Date = 4th
Nov 2010
P10 1st Oil Date 5th
Oct 2010

31. Used the following Class 2 Estimate to run Cost Probability Simulations in @RISK
Input to @Risk Class II Cost Estimate Scenario

32. Quantative – Cost Risk Outputs on Class II Estimate
using Monte-Carlo Simulation in Palisade @RISK - Page 1
CBS -Extrapolated based on Monte-Carlo simulation of Class 2 Cost Estimate a range of p10, p50, p90 Probabilistic Cost
Profiles (using values probabilistic around the base case costs)

33. CBS -extrapolated based on Monte-Carlo simulation of Class 2 Cost Estimate a range of p10, p50, p90 Probabilistic Cost
Profiles (using values probabilistic around the base case costs)
Quantative – Cost Risk Outputs on Class II Estimate
using Monte-Carlo Simulation in Palisade @RISK - Page 2

34. CBS-extrapolated based on Monte-Carlo simulation of Class 2 Cost Estimate a range of p10, p50, p90 Probabilistic Cost
Profiles (using values probabilistic around the base case costs)
Quantative – Cost Risk Outputs on Class II Estimate
using Monte-Carlo Simulation in Palisade @RISK - Page 3

35. CBS –extrapolated based on Monte-Carlo simulation of Class 2 Cost Estimate a range of p10, p50, p90 Probabilistic Cost
Profiles (using values probabilistic around the base case costs)
Quantative – Cost Risk Outputs on Class II Estimate
using Monte-Carlo Simulation in Palisade @RISK - Page 4

36. CBS –extrapolated based on Monte-Carlo simulation of Class 2 Cost Estimate a range of p10, p50, p90 Probabilistic Cost
Profiles (using values probabilistic around the base case costs)
Quantative – Cost Risk Outputs on Class II Estimate
using Monte-Carlo Simulation in Palisade @RISK - Page 5

37. CBS –extrapolated based on Monte-Carlo simulation of Class 2 Cost Estimate a range of p10, p50, p90 Probabilistic Cost
Profiles (using values probabilistic around the base case costs)
Quantative – Cost Risk Outputs on Class II Estimate
using Monte-Carlo Simulation in Palisade @RISK - Page 6

38. CBS - extrapolated based on Monte-Carlo simulation of Class 2 Cost Estimate a range of p10, p50, p90 Probabilistic Cost
Profiles (using values probabilistic around the base case costs)
Quantative – Cost Risk Outputs on Class II Estimate
using Monte-Carlo Simulation in Palisade @RISK - Page 7

39. CBS -extrapolated based on Monte-Carlo simulation of Class 2 Cost Estimate a range of Probabilistic Cost Profiles (using
values probabilistic around the base case costs)
Quantative – Cost Risk Outputs on Class II Estimate
using Monte-Carlo Simulation in Palisade @RISK - Page 8

40. CALCULATED based on Monte-Carlo simulation of Class 2 Cost Estimate a range of Probabilistic Cost Profiles (using
values probabilistic around the base case costs)
Quantative – Cost Risk Outputs on Class II Estimate
using Monte-Carlo Simulation in Palisade @RISK - Page 9

41. Based on Spearman's Rank Correlation simulation of cost centre sensitivity (relative Coefficient values) of Class 2 “Total
Project Value”
Quantative – Cost Risk Sensitivity on Class II Estimate
using Monte-Carlo Simulation in Palisade @RISK

42. Calculated Cumulative Ascending Cost Distribution Curve based on values inherent in
Class 2 “Total Project Value” Cost Estimate
Cost Distribution of “Total Project Value” on Class II Estimate
using Monte-Carlo Simulation in Palisade @RISK

43. Template Drilling Costs (if EPCI miss 2009-2010 weather
window)

44. • Risk Analysis / Outputs :
• Schedule : Monte-Carlo Simulation in PERTMASTER ( “Base Case” assumes
Sanction July 08”)
• P10 = 25th
May 2010 (originally the P50 Deterministic Case)
• P50 = 7th
July 2010
• P90 = 26th
August 2010
• Schedule : Monte-Carlo Simulation PERTMASTER (“Sanction Delay Case”
assumes Sep 08”)
• P10 = 5th Oct 2010
• P50 = 4th
Nov 2010
• P90 = 6th
Dec 2010
Chima Sao Field Development
“Best Case” and “Sanction Delay Case”
pe-mitagated (Determinstic) post-mitigated (Probablistic)
Cost / Schedule Analytics to acheive Optimal 1st Oil Date
using Oracle Primavera Risk Analysis and Palisade @RISK
Statistical Results of Cost / Schedule Risk Analyitics

45. Conclusions of this Report :
The original Deterministic Schedule is “aggressive but achievable” provided no slippage
occurs in Approvals Process and Project Sanction is not delayed beyond July 2008
• EPCI LL Procurement manageable with a schedule benefit and slight cost risk
ahead of Project Sanction
• Much effort has gone into ensuring that “team effort” at 2 x risk workshops
contributed to refinement both of quality, content and appropriate detail of Risk
Registers
• A “face-to-face” knowledge management process was adopted to refine accuracy
of schedule 3 point activity duration estimates – this proved a valuable exercise
and encouraged risk “ownership”
• Using a structured Risk Assessment Process and latest risk analysis methodologies
applied to state of the art Risk Analysis software the consultant was able to :
• Link Qualitative Risk Registers to Level 2 Schedule activities
• Run probabilistic algorithms on Quantative 3 point duration estimates and
Class 2 Estimate
CONCLUSIONS