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Date: 25 Feb 2011 Lubricant Oil Blending Plant Project

Version: 1.0
Status: Authorised
Page: 1 of 40

Multicultural Oil Company, Ltd.

Lubricating Oil Blending Plant Project (LOBP Project)
Hanoi, Vietnam


Revision History
Date of this revision: 3 April 2003 Date of next revision 12 April 2003

Revision
Number
Revision
Date
Summary of Changes Changes
marked
1 3 Apr 03 Initial Release (N)
Approvals
This document requires following approvals.
Name Title Signature
Gunter Nimtz Project Manager
Distribution
This document has been distributed to
Name Title
Peter Duffy MOC Project Team
Budi Hartono MOC Project Team
Sian Bjerking MOC Project Team
Hai Tran MOC Project Team

Date: 25 Feb 2011 Lubricant Oil Blending Plant Project
Version: 1.0
Status: Authorised
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Preface
This project plan is the management document for this project. It records the planning
for the project and sets out the boundaries in which the Project Manager operates. The
project team uses it to ensure the delivery of defined project outcomes. The document
will be reviewed and amended to meet changed conditions or objectives during the
projects life span. The project leadership team can only make changes to the project
plan and scope with approval from the project sponsor.
All these steps represent an effective project scope management, which will help to
communicate the objectives and planned details from the project team to all relevant
stakeholders of the project. This, in turn, produces certainty that all stakeholders accept
the projects outcome.

This project is hereby authorised.


Jim Smith
CEO Multicultural Oil Company Ltd.

Date: 25 Feb 2011 Lubricant Oil Blending Plant Project
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Status: Authorised
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Code of Ethics

We, the members of the LOBP Project Team set for ourselves the following
standards of conduct in our relationship with our suppliers, our employer, each
other and those with whom we work.

In particular:
We intend to comply with the law.
We intend to act honestly.
We will endeavour not to place ourselves in situations which result in
divided loyalty.
We intend to use Multicultural Oil Companys assets responsibly and in
the best interests of Multicultural Oil Company, Ltd.
We intend to respect the rights of the individual and the community in
which we work.

We are individually responsible and accountable for our actions and by the way
we perform our functions and report the results of our actions.

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Contents
Preface ............................................................................................................... 2
Code of Ethics .................................................................................................... 3
Contents ............................................................................................................. 4
1. Background ............................................................................................... 6
2. Purpose ..................................................................................................... 7
3. Objectives .................................................................................................. 7
3.1 Primary Objectives .......................................................................................................... 8
3.2 Secondary Objectives ..................................................................................................... 8
4. Scope Statement ....................................................................................... 9
5. Exclusions ............................................................................................... 10
6. Constraints .............................................................................................. 11
7. Related Projects ...................................................................................... 12
8. Assumptions ............................................................................................ 13
9. Broad Strategy ........................................................................................ 13
10. Phases .................................................................................................... 15
10.1 Engineering & Design................................................................................................ 15
10.2 Procurement .............................................................................................................. 15
10.3 Construction .............................................................................................................. 15
10.4 Commissioning & Start-Up ........................................................................................ 16
10.5 Warranty .................................................................................................................... 16
11. Key Activity Schedule .............................................................................. 16
12. Master Budget ......................................................................................... 17
13. Communications Management Plan ........................................................ 18
13.1 Overview ................................................................................................................... 18
13.1.1 Communications with the sponsor ......................................................................... 19
13.1.2 Communications with functional management ...................................................... 19
13.1.3 Communications with subcontractors .................................................................... 19
13.1.4 Communications within the team ........................................................................... 19
13.2 Media / File Formats .................................................................................................. 21
13.3 Scheduled meetings .................................................................................................. 21
13.3.1 Meeting Standards................................................................................................. 22
13.4 Reporting ................................................................................................................... 23
13.5 Base-lined Documents .............................................................................................. 23
13.6 Contact Information ................................................................................................... 24

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14. Responsibility Matrix................................................................................ 25
15. Stakeholders ........................................................................................... 25
16. Risks ........................................................................................................ 27
17. Quality Procedures .................................................................................. 28
18. Contractual Issues ................................................................................... 28
Annexes ........................................................................................................... 30
Annex 1: Objectives Preference Matrix ................................................................................... 30
Annex 2: Work Breakdown Structure ...................................................................................... 31
Annex 3: Stakeholder Analysis ................................................................................................ 33
Annex 4: Responsibility Matrix ................................................................................................. 38


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1. Background
The Multinational Oil Company Ltd (MOC) is a wholly owned subsidiary of Shell
Oil. Shell Oil is one of the global players in the oil exploration and oil refining
industry. While Shell Oil focuses on the exploration of crude oil and the refining
of it into major products such as diesel, petrol and kerosene, MOCs main
emphasis is on the production of lubricant oils. Since 1989, MOC owns and
operates several oil processing facilities worldwide. Currently, MOC supplies
the South East Asian market from its facilities in the Americas, Europe and
Australia.
However, market factors, such as supply chain and customer demand, together
with changes in the economy, put pressure on the profitability of the lubricant oil
industry. Therefore, competitive pricing in the marketplace will continue to
increase as major players in the lubricant oil industry fight harder for a bigger
share of the 23 million tons worldwide demand.
To supply the growing South East Asian market with lubricant oils at a
competitive price MOC has decided in cooperation with Shell Oil to establish a
new lubricating oil blending plant in South East Asia. Based on locational
advantages, MOC will benefit from three factors. First, MOC will take
advantage of the lower labour costs, which are substantially lower and will
remain lower than in other existing plant locations around the world. Second,
due to the short physical distance of the biggest markets within the South East
Asian region, such as China, Taiwan and Japan, the transport costs for access
to the these markets are significantly reduced. Finally, the supply of the local
Vietnamese market benefits from the different tariff imposed on the import of the
raw materials for lubricant oils, such as base oil and the finished product. While
Vietnam has imposed a tariff of 20% on lubricant oil, the tariff for base oil, an
important component for lubricant oil, is only 5%.
Only recently, MOCs biggest competitors, including AP Oil International Ltd.
and BP-Amoco, have started to install their own lubricant oil blending plants in
Vietnam. Therefore, MOCs planned facility in Vietnam will play a vital role to
maintain its actual share in the lubricant oil market of 8% (2001). Although the
relative market share will not increase, due to the growing market the absolute
market share in volume will increase significantly in the near future.
Due to the strategic importance of the new facility in Vietnam, the total capital
investment involved in the project will be funded from internal resources. In
particular, MOC and Shell Oil provide the required funding.

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2. Purpose
As mentioned in the Background of this document the project is undertaken to
address the business need of MOC and Shell Oil in the South East Asian
market. The strong competition in the lubricant oil market requires MOC in
cooperation with Shell Oil to establish a state-of-the-art lubricant oil blending
plant in the South East Asian region.
The scope of this project includes the designing and establishment of a state-of-
the-art lubricant oil blending plant in Vietnam.

3. Objectives
Within the overall purpose of this project to design and establish a new state-of-
the-art lubricating oil blending plant in Vietnam, several particular objectives
have to be accomplished. The successful achievement of each individual goal
is crucial to guarantee a competitive position in the South East Asian market
and to gain a global reputation.

Although all goals are important to secure a
highly competitive position, the primary goals are
necessary to fulfil the minimum requirements of
the LOBP Project. The additional
accomplishment of the secondary goals would
further improve the competitive position.
The distinction between primary and secondary
goals is based on the preference matrix (see
Annex 1). Figure 3.1 shows the results of the
preference matrix including the objectives and
the marks for each of those. The goals A, E, D,
and B are classified as primary objectives and
the remaining ones are secondary goals.



Figure 3.1 Objectives Preference Matrix
RESULTS
MARKS
A
17
E
15
D
14
B
9
J
8
C
6
H
5
G
4
I
3
F
2
K
0
OBJECTIVES

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3.1 Primary Objectives
The primary objectives are:
A) The lubricant oil blending plants installed capacity will be 40,000 metric tons
per annum to produce international quality lubricants that meet all of the
domestic market needs. Although the initial capacity will be 40,000 metric
tons per annum, the plant has to be prepared for an expansion up to 80,000
metric tons per annum at a future stage.
E) To be able to gain a competitive position, the cost of the project must not
exceed six million dollars and the annual fixed costs of the installed facility
should be around $200,000.
D) This project should be completed within 12 months including the stages from
the initial design to the commissioning.
B) The plant will include a bulk storage of 4,000 metric tons that is in line with
the blending facility.
3.2 Secondary Objectives
The secondary objectives are:
J) Provide a 12 months warranty from start of operation.
C) A laboratory completely equipped with the most modern scientific
instruments and capable of analysing lubes to extremely fine detail,
controlling the quality of lubes to determine its qualitative aspects has to be
built on the same premises.
H) Train the employees.
G) The plant should be committed to produce and supply lubricants in a safe
and healthy environment for employees.
I) The concept of the plant should be dedicated to the protection of the
environment by development of less toxic products and a range of
biodegradable oils, participating in the collection and the treatment of used
oils, and treating of polluted grounds.
F) In order to integrate the facility into the new companys global information
network, the plant should include a state-of-the-art information system with a
global interface.
K) International and local contractors will supply the blending plant in modular
sections while only local contractors will build infrastructure facilities

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4. Scope Statement
The vital role of the LOBP Project is to coordinate various activities to design
and establish a new state-of-the-art lubricant oil blending plant in Vietnam. In
particular, activities range from the detailed engineering and design, to the
procurement and handling of supply and contractors, to construction monitoring
and inspection and to the final commissioning. Additionally, the LOBP Project
includes the initial training of the employees during the commissioning phase.
In order to be successful, several project deliverables have to be accomplished.
These project deliverables have been listed in the sections above titled Primary
Objectives and Secondary Objectives.
Figure 4.1 shows the project scope and structure in a graphical format.

ENGINEERING
/ DESIGN
(basic &
detailed)

PROCUREMENT,
SUPPLY &
HANDLING
FIELD
FABRICATION &
CONSTRUCTION
PRE-COMMISIONING
COMMISIONING
START-UP
WARRANTY
CLAIM RESPONSE
(12 months)
MECHANICAL
CIVIL
CHEMICAL
ELECTRICAL &
INSTRUMENT
BY LOBP Project
Team
PURCHASING &
EXPEDITING
VEND
OR #1
VEND
OR #3
VEND
OR #2
VEND
OR
OUTSOURCING
MECHANICAL
CIVIL
CHEMICAL
ELECTRICAL &
INSTRUMENT
BY LOBP Project Team

BY LOBP Project Team

GOVERNMENTS
APPROVAL
Multicultural Oil Company,
Ltd.
MOC ~ the owner
MOCs LOBP Project Team
1.1 Project
executor
We are
here
Figure 4.1 Project Execution Planning

CRA

CRA

CRA

CRA
Legend
Checking,
Review,
Approval
Direct labour
Indirect labour

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5. Exclusions
The LOBP Project is clearly confined to the design and establishment of the
lubricant oil blending plant. Several associated facilities and matters are
explicitly excluded from this project.
These exclusions are:
The external transport infrastructure for raw materials and finished products
to and from the plant is excluded.
No bottling and canning of products is to be undertaken within this plant.
This project is not involved in the operating of the facility.
MOCs Logistics Department supplies the required raw material for testing
and commissioning.
The integration of the plant within the companys hierarchy and customer
network is excluded.


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6. Constraints
In accomplishing the objectives of the LOBP Project various constraints would
have to be considered beforehand. Although the constraints do negatively
impact on the projects cost, time and planning effort, the consideration of the
constraints will guarantee the success of the project.
In particular, those constraints are:
The local supply of electricity, water and telecommunication is not 100%
reliable. Therefore, additional contingency equipment, such as an electricity
generator, water tank and filter, have to be installed.
It has to be a state-of-the-art facility, which means that it cannot be copied
from any existing plant. Furthermore, all required components have to be
new.
Due to the already approved site in the industrial zone in Hanoi, the size and
the shape are given and cannot be changed.
The total cost of the new plant must not exceed 6 million US dollars.
The project has to be completed within 12 months.
Use of local contractors, which means limited choice of proven quality of
contractors.
Import of required high-tech equipment results in higher costs and longer
lead times due to transport.
Local labour market does not provide adequate skilled worker. Therefore,
an extended training period is required.
Requirement of high occupational health and safety standards.
Measures to avoid polluting the environment including oil leakage from tanks
and pipelines and toxic chemicals.
Complex regulation by the local government to get the final approval for
operation.
This project does not cover the training of other employees than those
involved in operating the technical functions of the plant.

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7. Related Projects
At the same time as the LOBP Project progresses other related projects are
carried out. These projects together with the LOBP Project build a broader
system and therefore have to be considered throughout all stages of this
project. Due to the strong interrelationships between these projects, there will
be special communication measures, as detailed below, between the various
projects.
Related projects are:
Bottling and canning plant in Hanoi, Vietnam:
The bottling and canning plant will be located on a nearby site in Hanoi. It
will use the finished products of the lubricant oil blending plant as its inputs.
Therefore, the lubricant oil blending plant treats the bottling and canning
plant as another major customer. This, in turn, results in cooperation
between both in regard to the product quality and quantity.
Logistics improvement including the external transport of the lubricating oil
blending plant:
In order to reduce the transport costs within the whole supply and
distribution process a further project addresses this issue. A major concern
for the logistic improvement team is the supply of raw materials to the
lubricant oil blending plant in Hanoi and the distribution within the South East
Asian market. Therefore, minor coordination between both projects are
necessary.
Global information system:
To further strengthen the communication and coordination between the
worldwide locations a new global information system will be implemented.
The LOBP Project has to put into operation an information system that
features the requirements of the global information system. Consultants
from the global information system project will give advice on this topic
within the appropriate stages.


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8. Assumptions
The following assumptions are made in conjunction with the LOBP Project:
The feasibility study and the financial analysis was undertaken by the
relevant department within the general management of MOC in cooperation
with Shell Oil. Therefore, no further analysis is necessary.
MOC and Shell Oil provide the complete funding of 6 million US dollars.
The approved site in the industrial zone in Hanoi, Vietnam is accessible by
road and by water.
The national and local governments have initially approved the planning and
building of the lubricant oil blending plant in the specified area. However, to
get the final authorisation prior to commencement of operations further
approval documents are necessary.

9. Broad Strategy
The Multicultural Oil Company Ltd, the owner of the LOBP Project, has already
established a dedicated project team (hereinafter called the LOBP Project
team). The LOBP Project team has full authority in executing this particular
project. Moreover, all decisions related to this project are the LOBP Project
teams responsibility. Hence, this team shall provide regular progress reports to
the board of directors.
Should there be any problems that cannot be resolved by this team or that is
beyond its authority, the team should consult the board of directors.
During this project, the following project phases will be implemented:
Engineering
Procurement
Construction
Commissioning & Start-Up
Warranty
Details will be explained in the Phases part of this document.


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To comply with quality requirements, appropriate standards and procedures
will be applied along with closed supervision from the LOBP Project team.
The following local standards will be applied:
Law on the Protection of the Environment 27/12/93
Vietnam State Regulations on Environment Standards 1995
Vietnamese Fire fighting & prevention standards; TCVN-2622, TCVN-
5738
Procurement regulations and Decree 43/CP-16/7/96
Regulation on construction and investment administration and Decree
42/CP-16/7/96
Ministry of Construction Circular 01/BXD-CXCD-15/4/97
Circular on technology transfer 28 TT 22/1/94
JIS, and other applicable standards

In order to minimize the project cost, approved local resources (material &
manpower) will be utilised. It is also encouraged to produce bulk material-take-
off as accurate as possible to minimise unnecessary costs. The design of the
plant will be compact to reduce bulk materials consumption, with consideration
of some technical and non-technical aspects (e.g. maintainability, operation
ability, accessibility, reliability, safety, security as well as aesthetics). In
addition, a smart strategy in procurement (e.g. vendors binding, negotiation) will
be applied to reduce the prices for equipment and materials.
To comply with the planned overall project duration, the Concurrent
Engineering method (the flying start) will be implemented. By implementing the
Concurrent Engineering strategy, it is not necessary to create a linear schedule
and to use over-the-wall approach. An overlapping activity schedule will be
used with consideration of any possible risks. The critical path on the schedule
shall be closely monitored.
Since time is not a critical dimension among the three dimensions (cost, quality
and time) for the LOBP Project, any shortcoming in the other dimensions will
have to be offset by sacrificing time. However, performance on all three
dimensions is vital in order to achieve the best results on this project.
A sound risk assessment will be applied during the preliminary stage of the
project execution to identify any potential problems as well as to develop a
contingency plan (e.g. HAZOP ~ Hazardous Operating Procedure).
Within all stages of this project the accommodation of future needs (e.g. plant
expansion) is considered. Furthermore, the Life Cycle Analysis (LCA) (i.e.
implementing social, economic, environmental assessment & strategy) will also
be addressed.


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10. Phases
As mentioned in the broad strategy, the LOBP Project is divided into five major
phases.
10.1 Engineering & Design
The engineering and design will be done on an in-house basis by the
LOBP Project team with support from internal experts.
Within the engineering and design phase two sub-phases exist that will
be carried out subsequently. The first sub-phase is the basic engineering
and the second the detailed engineering.
During and at the end of this phase applicable reviews, checks and
approval procedures will be undertaken to guarantee high quality and
compliance with all objectives.
In order to achieve maximum results, all available resources, such as
manpower, knowledge database, engineering software, will be fully
utilised.
10.2 Procurement
All procurement activities will be handled and monitored by the LOBP
Project team.
The appropriate procedure, including requisition, quotation, bidding,
purchase order, will be followed to ensure that all items purchased
comply with the project quality specification.
For each procurement process a detailed strategy will be developed to
reduce delivery time. This is especially important for long-lead items.
10.3 Construction
To share risk and improve efficiency, it was decided that sub-contractors
would carry out all construction activities.
The LOBP Project team will coordinate and supervise all construction
activities on a day-to-day basis.


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10.4 Commissioning & Start-Up
The LOBP Project team will execute the commissioning and the start-up
with supervision from an approved independent institution to get
Governments final approval.
Throughout this phase of the project the LOBP Project team will provide
on-site training to future operators.
The final documentation (as-built documents) will be finalised during this
phase.
10.5 Warranty
During the warranty period (12 months, after project completion), a
member of the LOBP Project team will be assigned to handle all claims
from the plant operations management.
All applicable procedures shall be done in response to those claims.

11. Key Activity Schedule
The key activity schedule follows the five phases that were explained in the
previous part. Each phase is structured into sub-phases and activities to clearly
identify all required steps. Annex 2 presents the work breakdown structure,
which contains a detailed picture of the key activities.


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12. Master Budget
Figure 12.1 shows the components of the budget in accordance with the overall
estimated and approved budget for the LOBP Project of 6 million US dollars.

Direct Labor
Positions Numbers Salary per month 12 months
Project manager 1 3,000 36,000.00 $
Engineering manager 1 1,500 18,000.00 $
Lead Engineer 4 1,000 48,000.00 $
Engineering engineer 9 700 75,600.00 $
P&E manager 1 1,500 18,000.00 $
P&E officer 2 600 14,400.00 $
CST Manager 1 1,500 18,000.00 $
CST Lead engineer 5 1,000 60,000.00 $
Adm&Fin. Manager 1 1,500 18,000.00 $
Adm&Fin. Officer 2 600 14,400.00 $
Equipments 3,200,000.00 $
Construction 1,200,000.00 $
Electricity 320,000.00 $
Laboratory 400,000.00 $
Materials for commissioning 100,000.00 $
Others 20,000.00 $
Consultant 30,000.00 $
Travelling 60,000.00 $
Training 50,000.00 $
Office equipments 256,000.00 $
Maintenance 43,600.00 $
Total 6,000,000.00 $

Figure 12.1 Master Budget




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13. Communications Management Plan
The Communications Management Plan details the generation, collection,
dissemination and storage of all communication and information activities that
take place during the project, including regular meetings and reporting.
Its purpose is to ensure that all the project stakeholders and team members
receive all the information they need in a timely manner.
13.1 Overview
A number of communication channel models have been identified. These
include both formal and informal communication paths. Figure 13.1 shows the
basic communications model for the LOBP-Vietnam project management team.

















Figure 13.1 Basic Communications Model LOBP-Vietnam.

Upward
Communication to
MOC Ltd Executive
Board
Lateral
Communications to
peers, other functional
groups and customers
Lateral Communications
to community, social
groups, and other
secondary
organisations
Downward
communications to
subordinates and
MOC Project office
staff
LOBP-Vietnam
Project
Manager

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The basic forms of communication will include both formal and informal written
and verbal styles. Table 13.1 classifies the forms of communication used by the
MOC LOBP project.

Formal Written Project Charter
Management Plan
Informal Written Engineers notes
Memos
Formal Verbal Presentations
Informal Verbal Conversations
Table 13.1 Communication Classification

13.1.1 Communications with the sponsor
Communications with the sponsor, Multicultural Oil Company Ltd, is classified
as upward communication. Formal means of communication are preferred
through the use of the Project Charter and other relevant Management Plans.
13.1.2 Communications with functional management
Communications with functional management is lateral communication and is
likely to contain all classification styles depending on the situation.
13.1.3 Communications with subcontractors
Communications with subcontractors is lateral communication and is to be in
the form of both formal and informal written communication. Where verbal
communication is used it is to be followed up and confirmed in a written form.
13.1.4 Communications within the team
Communications within the team will be both lateral and subordinate and will
mostly be in the form of both written and verbal informal style. Furthermore,
Figure 13.4 shows the structure of the project team, which is helpful in
identifying the communication pattern within the team.


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Figure 13.4 Project Team Structure
PROJECT
DIRECTOR
PROJECT
MANAGER
PROJECT CONTROL
MANAGER
QA/QC MANAGER
MECH. LEAD
ENGINEER
PROCUREMENT
MANAGER
CONSTRUCTION
MANAGER
FINANCE
MANAGER
COMMISSIONING
MANAGER
ENGINEERING
MANAGER
PROJECT
ENGINEER
PIPING
LEAD
ENGINEER
ELECT LEAD
ENGINEER
CIVIL LEAD
ENGINEER






Note: this graph
indicates the job roles. It
is possible for one
person to take more than
one job role.

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13.2 Media / File Formats
The following table details the accepted electronic file formats to be used by the
project team. The MOC information support cell has a limited ability to convert
many different file formats into the projects accepted file format whenever the
need arises, such as files received from external sources.
Document Type File Format
Documents, letters, manuals, etc. (source version) MS Word 2000 or compatible
Spreadsheets MS Excel 2000 or compatible
Project Schedules MS Project 2000 or compatible
Presentations MS PowerPoint 2000 or compatible
Archive Files .pdf and .zip, or compatible

13.3 Scheduled meetings
A number of scheduled meetings have been identified and are detailed below.
MEETING
Project Leadership Meeting.
Purpose To discuss project activities, progress and issues.
To discuss long-range project management issues.
Location MOC Asia-Pacific Regional Headquarters. Brisbane Australia.
Frequency First Thursday of every other month. Commencing at 0900 hrs. Duration
3 hrs.
Chairperson Gunter Nimtz
Minutes by Budi Hartono
Attendees Representatives from Shell, MOC Headquarters, LOBP Project team
and other invited attendees
Agenda Long term planning and performance issues
Minutes copied to All Attendees and CEO MOC Ltd
Media Minutes produced in MS WORD 2000 and distributed by e-mail.

MEETING
Weekly Project Management Meeting
Purpose To discuss project activities, progress and issues.
To review upcoming work, expected issues and risks.
Location MOC Asia-Pacific Vietnam Headquarters.
Frequency Every Wednesday Commencing at 1600 hrs. Duration 2 hrs.
Chairperson Gunter Nimtz
Minutes by Hai Tran
Attendees Gunter Nimtz, Hai Tran, Sian Bjerking, Budi Hartono, Peter Duffy
Agenda Project planing issues
Minutes copied to All Attendees
Media Minutes produced in MS WORD 2000 and distributed by e-mail.


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MEETING
Daily Production Meeting
Purpose To discuss project activities, progress and issues on a daily basis.
To inform stakeholders of daily program of work and associated
hazards and risks.
To be on hand to address issues on site before they become problems.
Location On Site Project Office
Frequency Daily commencing one week before production phase start at 0800hrs
with a duration of 1 hr
Chairperson Peter Duffy
Minutes by Sian Bjerking
Attendees All relevant contractor / stakeholder representatives
Agenda On site OH&S and environmental and daily coordination issues over
the next 1-2 days
Minutes copied to All Attendees
Media Minutes produced in MS WORD 2000 and distributed by e-mail.
13.3.1 Meeting Standards
The following dot points describe the standards for all meetings:
An agenda will be developed for planned meetings.
The agenda and support materials will be sent out no later than 48 hours
prior to the scheduled meeting start time.
The meeting will have a meeting leader/facilitator, note taker and
timekeeper. Where possible different people should cover these roles.
Come prepared to the meetings, review the agenda and support
materials in advance.
Be on time for meetings and remain present throughout its duration.
Start and stop the meeting at scheduled times.
Announce arrival when joining a teleconference.
Identify yourself before speaking.
Summarise the action items, responsibilities and due date before the
close of the meeting.
Within 48 hours after close of meeting send out minutes which clearly
identify action items, responsibilities and due dates.

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13.4 Reporting
The following formal status reports are to be generated by the project manager
or his representative.

REPORT Project Status Report
Purpose Highlight project progress to date.
Recognise outstanding performance by teams and individuals
throughout project.
Community Liaison
Frequency Every Three Months
Author Peter Duffy
Distributed to All Stakeholders as per stakeholder matrix
Media MS WORD 2000 Glossy Print
13.5 Base-lined Documents
Base-lined documents or processes are those that cannot be modified without
using the change control process. They serve as foundation information for the
LOBP Vietnam Project as a whole and are used to track progress and
achievement of objectives. The LOBP Vietnam base-lined documents are:
Project Charter.
Project Schedule.
Work Breakdown Structure.
Communications Management Plan.
Quality Management System.
Roles and Responsibilities.
Change Control Processes.
Risk Management Data Base.


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13.6 Contact Information
Org. Name Phone Number Fax Number Email Address Comment
MOC
Gunter
Nimtz
0434528764 0734525436 g.nimtz@moc.com
MOC Peter Duffy 0401321004 0734525436 p.duffy@moc.com
MOC Hai Tran 0433712898 0734525436 h.tran@moc.com
MOC Budi Hartono 0443543245 0734525456 b.hartono@moc.com
MOC
Sian
Bjerking
0432177572 0734525456 s.bjerking@moc.com
MOC Jim Smith 0456563254 0734523456 j.smith@moc.com CEO
Shell John Kline 0423456543 0256467365 j.kline@shell.com.au








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14. Responsibility Matrix
The responsibility matrix is based on the work breakdown structure. Each
component can have single or multiple responsibilities. The basic responsibility
for each task lies within the LOBP Project team. Nonetheless, other entities can
be responsible to provide consulting or approval activities.
A detailed list of the responsibilities can be seen in Annex 4.

15. Stakeholders
This section identifies the stakeholders of the LOBP Project. In order to
appropriately deal with all issue that impact on or involve stakeholders a
detailed stakeholder analysis is provided at annex 3.
In particular, the following stakeholders have been considered:

Primary Stakeholders
Multinational Oil Company Ltd
Shell Oil
Project Team
Subcontractors
Vendors/Suppliers
Employees/Labour Union
Customers
Users
Local Community
Secondary Stakeholders
Management of Industrial Zone in Hanoi
Local Government
National Government
Environmental Groups

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Furthermore, Figure 15.1 groups the various stakeholders into four groups
assessing their active or passive attitude for or against the LOBP Project.
Figure 15.1 Stakeholders



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16. Risks
Throughout all phases of the LOBP Project various risks exist and threaten to
reduce or delay the success of the project. Table 16.1 shows the initially
identified risks and assesses their level of risk on a scale from low to high.
Additionally, mitigation approaches are determined to provide measures that
limit the exposure to each risk.
A full analysis is provided in the risk management plan.
Activities
Level
H M L
Mitigation approaches
1. Vendors supply low quality products
and deliver not on time.
H Close supervision, clear and
detailed contract and schedule.
Provide alternatives.
2. Delay of shipment of equipments and
materials due to customs procedures
possible.
H Closely working with customs
office, if necessary, negotiate
delay with the stakeholders.
3. Agree with labour union about
working conditions such as annual
leave, bonus, maternal leaves, salary,
rights and obligations of both
employer and local employees.
H Getting advice and information
from consultants with local and
international expertise.
4. Off-specifications equipments and
construction not implemented exactly
as the approved design. Delay in
installation and construction.
H Clear contract, close monitoring
and supervision. Provide
alternatives.
5. Negotiating with industrial zone
owner the electricity and water supply
for the facility.
H Closely monitor negotiations, if
necessary considering of
alternatives.
6. Negotiating with Environmental
Agency and local community about
issues such as noise, gas emission,
and wastewater.
M Getting advice and information
from consultants.
7. Negotiating with vendors and material
suppliers of a contract to deliver
before deadline.
M Closely monitor the negotiations.
Provide alternatives.
8. Commissioning M Closely monitor if necessary,
negotiate delay with the
stakeholders.

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9. Lack of team work M Clear organizational structure,
clear individual responsibilities,
and incentive programs to get
more commitment from each
member.
10. Uncertainty of legislation M Detailed risk analysis, provide
back up planning.
11. Uncertainty of weather M Detailed risk analysis, provide
back up planning.
12. Project Scope changes required due
to client requests and new technical
considerations.
M Clear statement of tasks. Discuss
and negotiate changes with the
stakeholders.
13. Negotiating with sub-constructors of
contract to deliver before deadline.
M Closely monitor the negotiation.
Provide alternatives.
14. Getting the MOCs approval of the
engineering design.
L Discuss and recheck carefully, if
necessary, negotiate with the
MOC for delay.
15. Recruiting local professional staff
before commissioning
L On site training current and future
local staff
Table 16.1 Risk Assessment

17. Quality Procedures
Quality procedures are in accordance with MOCs quality manual. In addition,
the LOBP Project will utilise all appropriate local or international standards.

18. Contractual Issues
Significant parts of the LOBP Project will be contracted to other suppliers and
manufacturers. These areas include procurement, supply and handling, field
fabrication and construction as shown in Figure 4.1.
These issues are addressed separately in the procurement strategy document.


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Annexes

Annex 1: Objectives Preference Matrix


Objectiv
es
A B C D E F G H I J K
A A2 A2 A1 A1 A2 A1 A3 A1 A1 A3
B B1 D2 E2 B1 B1 B2 B1 B1 B2
C D2 E2 C1 C1 C1 C1 J1 C2
D E1 D2 D1 D2 D1 D1 D3
E E2 E1 E2 E1 E1 E3
F G1 H1 I1 J2 F2
G H1 G1 J1 G2
H H1 J1 H2
I J1 I2
J J2
K
ANALYSIS

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Annex 2: Work Breakdown Structure

1.0 Lube Oil Blending Plant (LOBP) Project
1.0.1 Engineering
1.0.1.1 Process
1.0.1.1.1 Basic Design (P&ID, PFD)
1.0.1.1.2 Calculation & simulation
1.0.1.1.3 Process Data Sheet

1.0.1.2 Civil
1.0.1.2.1 Specification & Calculation
1.0.1.2.2 Engineering Drawings
1.0.1.2.3 Civil Requisition & Material Take-Off

1.0.1.3 Mechanical
1.0.1.3.1 Specification & Calculation
1.0.1.3.2 Loading Data
1.0.1.3.3 Engineering Drawings
1.0.1.3.4 Mechanical Requisition & Material Take-Off
1.0.1.4 Piping
1.0.1.4.1 Basic Engineering (Plot Plan, General Layout)
1.0.1.4.2 Detailed Engineering Drawing
1.0.1.4.3 Piping Requisition & Material Take-Off

1.0.1.5 Electrical & Instrument
1.0.1.5.1 Basic Engineering
1.0.1.5.2 Detailed Engineering Drawing
1.0.1.5.3 Electrical & Instrument Requisition & Material Take-Off

1.0.2 Procurement, Supply & Handling
1.0.2.1 Civil
1.0.2.1.1 Piles
1.0.2.1.2 Steel Structure
1.0.2.1.3 Rebar
1.0.2.1.4 PVC Pipe
1.0.2.1.5 Grating

1.0.2.2 Mechanical
1.0.2.2.1 Main Equipment
1.0.2.2.2 Pumps

1.0.2.3 Piping
1.0.2.3.1 Pipes
1.0.2.3.2 Fittings
1.0.2.3.3 Valves
1.0.2.3.4 Pipe Support Materials
1.0.2.3.5 Gaskets, Bolts & Nuts
1.0.2.3.6 Special Pipe Items
1.0.2.3.7 Fire Fighting


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1.0.2.4 Electrical & Instrument
1.0.2.4.1 Diesel Engine Generator
1.0.2.4.2 Switchgear & MCC
1.0.2.4.3 UPS
1.0.2.4.4 Cable Tray
1.0.2.4.5 Wire
1.0.2.4.6 Lighting
1.0.2.4.7 Fire Detection System
1.0.2.4.8 CCTV
1.0.2.4.9 Control Valve
1.0.2.4.10 Pressure Regulators

1.0.3 Construction & Field Fabrication
1.0.3.1 Manpower Mobilization
1.0.3.2 Temporary Facilities
1.0.3.3 Site Preparation
1.0.3.4 Piling
1.0.3.5 Steel Structure Erection
1.0.3.6 Equipment Erection
1.0.3.7 Piping Fabrication
1.0.3.8 Piping Erection
1.0.3.9 Electrical & Instrument Installation

1.0.4 Site Commissioning & Start-up
1.0.4.1 Commissioning
1.0.4.2 On-site training
1.0.4.3 Final Documentation

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Annex 3: Stakeholder Analysis
In this part the stakeholder analysis is presented. First, the strengths and
weaknesses of the LOBP Project are identified. Second, the opportunities and
threats that arise from the environment are documented. Finally, for each
stakeholder the relevant information and the needs for this particular
stakeholder are presented.

Strengths:
Subsidiary of Shell Oil (well recognised company and a global player in
the oil exploration and oil refining industry);
MOC has an already well established market in South East Asia;
Management of Industry in Hanoi is very supportive of new projects in
area, encourages the growing industry.
Strong engineering design background.

Weaknesses:
It is the first project in Vietnam for MOC and the LOBP Project team.
The LOBP Project team is unexperienced in doing business in Vietnam.
The LOBP Project team lacks experience in dealing with customs and
official agencies.

Opportunities
Lower labour costs in Vietnam;
Low transport costs due to the short physical distance of the biggest
markets within the South East Asian region, such as China, Taiwan and
Japan;
Low tariff the Vietnamese market imposes on the import of raw materials.
Will create opportunities for locals to obtain jobs at the plant.
Vietnam is a member of ASEAN. Hence, no import/export tax is imposed
on trade between those countries.

Threats
Competing Lubricating Oil Blending Plants such as AP Oil International
Ltd. and BP-Amoco;
Opposed Environmental Groups.
Refer also to Risks

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Multinational Oil Company Ltd
Information: MOC owns and operates several oil processing facilities
worldwide; MOC currently supplies the South East Asian market from its
facilities in the Americas, Europe and Australia, and will greatly benefit from
establishing a new lubricating oil plant in Vietnam because of the advantages of
its locality and also in order to rival competitors.

Needs: Building of Plant to be accomplished in shortest time frame possible;
Project and product to be of highest quality; Cost of building plant to be as low
as possible.

Shell Oil
Information: Shell oil is the owner of MOC, hence will profit from the new
facility in Vietnam.

Needs: Building of Plant to be accomplished in shortest time frame possible;
Project and product to be of highest quality; Cost of building plant to be as low
as possible.


Project Team (Project Manager and Team Members)
Information: Responsible for managing the project.

Needs: Facility when completed to be of a high quality of work that meets or
exceeds MOCs expectations; Project to be completed within expected time
period; Work with dedicated, highly skilled and trusted team of employees.

Subcontractors
Information: Will profit from work they will be contracted to do on the site.

Needs: Clear task and payment description; Clear understanding of all
contractual agreements.




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Vendors/Suppliers
Information: Will profit from selling products to MOC required in order to
complete project.

Needs: Clear task and payment description; Clear understanding of all
contractual agreements.

Employees/Labour Union
Information: Will earn money from being employed to work on project.

Needs: Healthy and safe work environment; Acceptable wages, social security,
health insurance and working hours.

Customers
Information: Will profit from buying and selling products produced by MOC at
Hanoi Plant.

Needs: Reliable products with constant quality; reasonable priced products.

Users
Information: Will directly use the projects products.

Needs: Reliable products with constant quality; reasonable priced products.

Local Community
Information: Either will be supportive of project because they can see the
benefits to themselves (ie. create jobs in the area); Or will be opposed to the
project because will be concerned about negative impacts on the community
and environment.

Needs: Assurance that the project will have no negative impacts on the
environment and value of property in the area, and the locals quality of life;
Assurance that the facility will create jobs and/or have a positive impact on
property in the area.

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Strategy: Assure the locals of MOC and Shell Oils good reputation worldwide;
Ease concerns about negative impacts to the community and environment by
using examples of other communities worldwide thriving from the advantages of
having a MOC Oil Lubricating Plant in the area (ie. jobs created, no
environmental concerns).

Management of Industrial Zone in Hanoi
Information: Industrial zones (IZ) are special zones set up by the Vietnamese
Government to enhance industrial production. The zones also offer favourable
tax treatment and hence new investments are readily encouraged.

Needs: An Investment licence must first be obtained before a company may
operate in Hanoi. These licences are easy to obtain, by submitting an
application to the local IZ management board.

Local Government
Information: The local government in Hanoi supports foreign investment as it
means bringing of capital into Vietnam and stimulating employment in the
region.

Needs: An Investment licence must first be obtained before a company may
operate in Hanoi. These licences are easy to obtain, by submitting an
application to the local IZ, EPZ management boards or by application to the
Ministry of Planning and Investment (MPI).

National Government
Information: The National Government of Vietnam actively supports the
development of industry, by the designation of Industrial Zones and Export
Processing Zones. These zones serve as incentives for foreign investment in
the country by offering favourable tax treatment.

Needs: An Investment licence must first be obtained before a company may
operate in Hanoi. These licences are easy to obtain, by submitting an
application to the local IZ, EPZ management boards or by application to the
Ministry of Planning and Investment (MPI).





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Environmental Groups
Information: Opposed to the establishment of the oil refinery, because of
possible adverse affects on the surrounding environment.

Needs: Assurance that the project will have no negative impacts on the
environment, both in the plant construction and in the operation of the plant in
the future. Assurance of site rehabilitation if need be in the future. Assurance
of proper disposal and storage of all by-products and waste.

Strategy: Assure environmental groups of MOC and Shell Oils good
reputation worldwide; Provide environmental groups with an outline of all by-
products and waste disposal policies and emergency procedures; Assure
environmental groups of MOCs commitment to minimising disturbances to the
surrounding environment during and after construction.

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Annex 4: Responsibility Matrix
1 responsible
2 support 4 notification
3 consult 5 approval


Activity
Organisation
TFPT CVL MECH ELINS PIP CNSL

1.0.1 Engineering
1.0.1.1 Process
1.0.1.1.1 Basic Design (P&ID, PFD) 1 3
1.0.1.1.2 Calculation & simulation 1 3
1.0.1.1.3 Process Data Sheet 1 3

1.0.1.2 Civil
1.0.1.2.1 Specification & Calculation 1 3
1.0.1.2.2 Engineering Drawings 1
1.0.1.2.3 Civil Requisition & Material Take-Off 1

1.0.1.3 Mechanical
1.0.1.3.1 Specification & Calculation 1 3
1.0.1.3.2 Loading Data 1
1.0.1.3.3 Engineering Drawings 1
1.0.1.3.4 Mechanical Requisition & Material Take-Off 1

1.0.1.4 Piping
1.0.1.4.1 Basic Engineering (Plot Plan, General Layout) 1 3
1.0.1.4.2 Detailed Engineering Drawing 1
1.0.1.4.3 Piping Requisition & Material Take-Off 1

1.0.1.5 Electrical & Instrument
1.0.1.5.1 Basic Engineering 1 3
1.0.1.5.2 Detailed Engineering Drawing 1
1.0.1.5.3 Electrical & Instrument Requisition & Material Take-Off 1

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1.0.2 Procurement, Supply & Handling
1.0.2.1 Civil
1.0.2.1.1 Piles 1
1.0.2.1.2 Steel Structure 1
1.0.2.1.3 Rebar 1
1.0.2.1.4 PVC Pipe 1
1.0.2.1.5 Grating 1

1.0.2.2 Mechanical
1.0.2.2.1 Main Equipment 1 3
1.0.2.2.2 Pumps 1 3

1.0.2.3 Piping
1.0.2.3.1 Pipes 1
1.0.2.3.2 Fittings 1
1.0.2.3.3 Valves 1
1.0.2.3.4 Pipe Support Materials 1
1.0.2.3.5 Gaskets, Bolts & Nuts 1
1.0.2.3.6 Special Pipe Items 1
1.0.2.3.7 Fire Fighting 1

1.0.2.4 Electrical & Instrument
1.0.2.4.1 Diesel Engine Generator 1 3
1.0.2.4.2 Switchgear & MCC 1
1.0.2.4.3 UPS 1
1.0.2.4.4 Cable Tray 1
1.0.2.4.5 Wire 1
1.0.2.4.6 Lighting 1
1.0.2.4.7 Fire Detection System 1
1.0.2.4.8 CCTV 1
1.0.2.4.9 Control Valve 1
1.0.2.4.10 Pressure Regulators 1

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1.0.3 Construction & Field Fabrication
1.0.3.1 Manpower Mobilization 1
1.0.3.2 Temporary Facilities 5 1
1.0.3.3 Site Preparation 5 1
1.0.3.4 Piling 5 1
1.0.3.5 Concrete Foundation 5 1
1.0.3.6 Steel Structure Erection 5 1
1.0.3.7 Equipment Erection 5 1
1.0.3.8 Piping Fabrication 5 1
1.0.3.9 Piping Erection 5 1
1.0.3.10 Electrical & Instrument Installation 5 1

1.0.4 Site Commissioning & Start-up
1.0.4.1 Commissioning 1 5
1.0.4.2 On-site training 1 3
1.0.4.3 Final Documentation 1 3

legend TFPT Task Force Project Team
CVL Civil Subcontractor
MECH Mechanical Subcontractor
ELINS Electrical / Instrument Subcontractor
PIP Piping Subcontractor
CNSL Consultant