Practical Project Management

Strategic Planning and Leadership

Responsible Project Team
Supportive Stakeholders
Project Management Systems
Proven Project Management Practices

Heather A oil and gas production platform located in the North Sea
(Latitude 600 57 N and Longitude 00 53 E in 470 feet of water).

Don Cowan, MSc (Environ Manage), PMP, PEng,

Project Co-ordinator, Heather Field Development Project,
1974 to 1978
WDC Environmental Drilling Ltd
(Linkedin1).Docx
Email: wdoncowan@shaw.ca

Practical Project Management

29 March 2015

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TABLE OF CONTENTS
PRACTICAL PROJECT MANAGEMENT......................................................................... 3
Get it Right this Time!............................................................................................................... 3
What is Project Management? ................................................................................................. 4
Maximize Project Returns! ....................................................................................................... 4

FRAMEWORK FOR EFFECTIVE MINE DEVELOPMENT .................................................. 6

A Commitment to Project Management ................................... Error! Bookmark not defined.
A Responsible Project Team ..................................................................................................... 6
Supportive Stakeholders .......................................................................................................... 7
Useful Project Management Systems ...................................................................................... 7
A Proven Project Management Standard................................................................................. 7

FORMATIVE PROJECTS.............................................................................................. 8
Silver Queen Mine Development ............................................................................................. 8
Exploration of Oil Sands Lease (Kearl oil sands mine) ............................................................ 10
Heather Field Development Project ....................................................................................... 10
Broom Field Development ..................................................................................................... 13
Prairie Creek Mine Exploration .............................................................................................. 13

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PRACTICAL PROJECT MANAGEMENT
Get it Right this Time!

The main purpose of this commentary is to This short commentary

Benefits of PM

Mining development is a series of phases in one big project

Based on personal experience and project management studies

Need to continue studying project case studies to maximize

benefits of a project team

ll our working lives, as project geologists or engineers, we are members of a

project team, when we work for an exploration company. When we
are prospecting, mapping, logging core or building the mill, we are on
working on a project or phase of a much larger project. The Ontario
government defines five phases in a mining project as exploration,
advanced exploration, development, operations and closure (Practitioners
Guide, 2008). The Project Management Institute (PMI) defines a project
as:
A temporary endeavor undertaken to create a unique product,
service or result (PMI, 2013).
Oh Lord, we often wail, just give me one more chance. I promise that this
time we will finish on time and under budget, and that the mill will operate
as promised. We should not discount the power of prayer, but experience
tells me a competent project manager, more often than not, is our best
guide to salvation in the mineral exploration business.
Practical project management uses lessons learned on exploration
projects to tailor The Standard for Project Management of a Project (PMI,
2013) to develop a framework for managing mining projects. We need
everyones experience. The more experience we get the better we perform.
Our mantra is Profit by Experience.

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What is Project Management?
Project management is the application of knowledge, skills, tools, and
techniques to project activities to meet project requirements (PMI, 2013).
The focus is on results and project processes that deliver these results, as
follows:
Initiating processes define the project and obtain authority to
start work
Planning processes establish the scope of the project, its objectives
and the course of action required to achieve project objectives
Executing processes complete the work defined in the project
management plan to satisfy project specifications
Monitoring and controlling processes track, review, and regulate the
progress and performance of the project. They identify any areas
in which changes to the plan are required and initiate these changes
Closing processes finalize all project activities
Mining projects are risky and require large, up-front capital
expenditures. There is a long wait for a payback. Fortunately, an effective
project manager applies tools and techniques that reduce the period
between commencement of major expenditure and revenue collection, and
significantly improving project returns. (Check this!!)
Maximize Project Returns!
Initial exhaustive planning before beginning fieldwork is a cheap and high
value adding activity. The importance of up-front planning, rather than
planning as the project progresses, is driven by the extremely low cost of
planning in the in this early stage of the project, as a percentage of the
whole-life costs, and the costs the large cost incurred to correct any wrong
decisions made. Planning costs are likely to be no more than 5 percent of
the capital costs and only 3 percent of the whole-life costs (Mullen.
The essential model of project managementinitial exhaustive planning
before beginning work on siteis a relatively cheap and high value adding
activity. Monitoring and controlling follows during the costly construction
phase. Project management can reduce the period between commencement
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of major expenditure and revenue collection, significantly improving project
returns.
Correcting errors late in the life of the project can cost up to a million
times the initial cost of correcting these errors during the planning phase.
The potential reduction of construction time (the period during which large
funds are expended with no return on the investment), justifies significant
planning resources being spent during the relatively cheap planning period
before major work occurs on site.

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A FRAMEWORK FOR EFFECTIVE DEVELOPMENT

merada Minerals Corporation of Canada (Canadian subsidiary of the

Hess Corporation), a major American oil company, owned this lease,
and I was their Tar Sands Supervisor. The Hess Corporation had

established policies and procedures for project management. We had to

present a compelling business case to obtain approval and funds for the oil
sands lease evaluation project.
Effective companies use a business case as input to project initiation, the
first step in the project management life cycle (PMI, 2013). The project
was a success, but the world is not perfect. Hess restructured and sold
their Canadian assets to Exxon Mobile. They built the mine and Hess built
another refinery in the Caribbean. Meanwhile, I learned that to succeed
projects requires a systematic approach with well-defined project
management processes.
I consider everything that I have ever
done to be a project. However, for this
document, I have analysed five of my most
productive assignments (i.e., projects that
generated useful ideas and knowledge) to
develop the project management
framework. Here, I have defined each
element of the framework and shown how
its presence or absence had a significant
effect on a projects success or failure.

Kearl Oil Sands Mine

A Responsible Project Team

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Supportive Stakeholders

Useful Project Management Systems

A Proven Project Management Standard

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FORMATIVE PROJECTS
Silver Queen Mine Development
History of the Silver Queen Mine
The Silver Queen is enticing and still building
hopes in the hearts of rugged explorers, even
after a 100 years. She is resides at Owen Lake,
south of Houston B.C. and is certainly, but not
wholly, responsible for the demise of my career as
an exploration geologist with Pacific Petroleums
Ltd and a number of other careers with Pacific
The Silver Queen

Petroleums and Bralorne Can-Fer Resources Ltd.

Prospectors staked the main vein in 1912 and

between initial staking and 1924, prospectors discovered additional vein

systems. As a result, in 1928 Owen Lake Mining and Development Company
acquired the Silver Queen deposit, sank a shaft and drove an adit to
explore the polymetallic, epithermal, vein system (Cummings, ).
In 1941, Canadian Exploration Ltd. acquired the claims covering the
vein system and explored them until 1947. Nadina Explorations acquired an
option to explore the Silver Queen deposit, in 1963. To this day New
Nadina Exploration Ltd continues to explore, and has not lost faith.
Nadina and others continued to explore until 1971, when Nadina formed the
Bradina Joint Venture with Bralorne Can-Fer Resources and Pacific
Petroleum. The Bradina Joint Venture developed and operated the mine
until 1973, milling 500 tons per day. They had to shut down the mine in
1973 because of poor production (too few headings to provide enough
feed), and mining and concentrator problems (poor liberation) that led to
low metal recover (Sinclair, 2002).

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What I Learned from the Project
The project manager and his team delivered a mining-mill complex that
failed to meet cost and scope constraints of the project. My management
told me that Pacific Petroleums expected to pay a million dollars, but they
ended up paying eight million. Mining and milling operations failed to
produce the specified concentrate. The consortium cancelled the project
because it could not produce the expected revenue.
In the 1970s mining executives, and everyone else, were not aware of the
discipline of project management and its tools and techniques that enable
the project team to organize their work to meet time, cost, scope and
quality constraints. They believed that competent mining engineers,
geologists or mine managers were capable of managing development
projects.
The Silver Queen project had many shortcomings. To begin with, the
project sponsors should not have approved it, in the first place. Specifically
from a project management point of view:
In the early 1970s luck and contingency
The project team (very experienced engineers and accountants
from the Bralorne-Pioneer mine) did not have sufficient knowledge
of the skills, tools and techniques needed to manage the project
Specifically, nobody was tracking costs nor taking corrective action
to control spending

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Exploration of Oil Sands Lease (Kearl oil sands mine)
Oil Sands Lease 87 Exploration Program
The Amerada Minerals Corporation of Canada Ltd
hired me to evaluate Lease their manager

Alberta Oil Sands

Lease 87

Learning from Exploration of Lease 87

Heather Field Development Project

Project Description
Heather A oil and gas production platform located at Latitude 600 57
N and Longitude 00 53 E in 470 feet of water, and set with piles
driven into the bed of the North Sea.
Build an inventive organization. Profit by experience. Develop your mine
following the four principles of inventive project management.
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Develop a proactive team

Buil d a learning organization

Nurture supportive stakeholders

Use good systems

Union Oil Company of Great Britain awarded J. Ray McDermott, Inc.an
EPCIM contract and initiated the Heather Project. The contractor, now
McDermott International, provided engineering, construction, procurement,
installation, hookup, commissioning, and start-up assistance and project
management services.
The project started in 1974 when McDermott completed modification of an
off-the-shelf jacket design and started construction, at their fabrication
yard in Scotland.
In 1977, the jacket was loaded onto a barge and towed to the Heather
Oilfield, 90 miles NE of the Shetland
He

Islands, where it was installed on the

bottom of the North Sea in 470 feet of
water.

Heather

completely
Fabric

assembled

platform
and

was

started

producing oil in 1978.

The

project
Heather

was
Field

successful

and

the

still

continues to produce
oil 40 years after
work on the project
started in 1974.
This success was due
to

good

people,

contract
especially;

good company and contractor organizations and a good

project management system.
A project team makes its own luck by never taking its eyes off the Iron
Triangle of project management. That is by balancing all the conflicting
daily requirements of a building program.
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Unocal was the first American oil company to use a planning system on a
North Sea construction project. The jacket was loaded out and installed on
schedule.
The Heather Field made her backers lots of money and continues to do so,
40

years

after

the

Heather

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Project

was

initiated.

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Responsible Project Team
The project team as it evolved

Broom Field Development

Prairie Creek Mine Exploration

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