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Project Execution in Russia and Lessons Learned by a Norwegian

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Project Execution in Russia and Lessons Learned by a Norwegian NRCC Project execution in Russia and lessons learned by a Norwegian: Tendering, Pre-qualification, Winning Strategy, Execution and Delivery with a flavor of Russian/Norwegian Culture As part of the NRCC “Doing Business in Russia” six days training program in Murmansk and St. Petersburg. 2011 By Erik Gulbrandsen CEO and Managing Director Norwegian Management Solutions AS St. Petersburg 11.04.2018 1 NorManSolutions Content of Presentation • Introduction • Project Execution • Fabrication opportunities in Russia “Cooperation on Top of the World” • Pre-qualification • Tendering • Winning Strategy • Russian Regulatory navigation • Russian vs Norway – statistical comparison • Cross Cultural alignment and cooperation • Closing remarks with Q & A • Bonus, if time allows 2 NorManSolutions Introduction Presentation performance strategy 22 slides leaves average ca. 3 min per slide + 4 Intro/End presentation + 7 Pictures. Pluss 17 picture slides from Sakhalin 1 and 2 construction period. Please forward questions as we go along and/or at the presentation. + Bonus: A 4 min relaxing, sound Movie of 40 years of working with the O&G Business in Norway and Russia Purpose of Presentation • Give you a “snap-shot” of 2 successful Oil &Gas Projects completed in Russia. • Make sure that you see Russian and Norwegian opportunities in your way forward. Objectives of Presentation • Increasing your understanding of our neighbouring countries, Russia and Norway, by at least 50%. • In such a way that you want to: • Investigate further cooperation with Russian and Norwegian Companies. • Exchange technological and cultural cross boarder 3 NorManSolutions Barents, Kara and Sea of Okhotsk + Caspian Sea potentials TheSizeThe size ofsize North of of North North Sea: Sea: Sea: NorwegianNorwegianNorwegian +and and UK UK SectorUK Sector Sector Source TU Meaning: 1 installation in place per month in 30 years ! 4 Proven execution methods for shallow-water platforms NorManSolutions Sakhalin 1 and 2: Water Depth 30-45 m. One construction site: In Dry Dock Dry Dock Slipforming in Dock Tow out of dock Towing to the field Installation Topside Float-over In operation 5 Fabrication opportunities in Russian Ship yards NorManSolutions Colour Legend: In progress In Operation Need Upgrade In Upgrading Opportunities Steel Mills Survey Consolidated overview of all Yards visited in the time span: 1997 - 2014 SDP-1997, 2004,2006 & 2014 SDP-Supplier Development Program performed by Kvaerner Yard 35 Novatek Murmansk Yard Yard 82 Ex. – Reinertsen Vyborg Yard Murmansk Yard Murmansk Kalingrad Shiprepeair Yard Nikolayevsk-na-Amur Kraznaia Sevmash & Kuznitca Zvezhdoskha To be investigated: Amur Ship Building Plant SDP-1997, 2003, & 2008 - Izhorsky Zavod - Admiralty Ship yard - Baltiysky Zavod SDP-2005 Yakor Sovgavan - Severnaya Verf Vostok Yard Dalzavod Yard Zvezda Yard To be investigated in Astrakan: Slavyanka Yard - Korabel Nakhodka Ship Repair Yard - 3-International - Lotus - Krasnye Barricady 6 Fabrication locations in North West Russia NorManSolutions Visiting program 2015 Color Legend: Shortlisted Shipyards Vyborg Yard For Module assembly Vyborg 21/22.09.15 Mechanical Workshops as Sub-Suppliers & TKC Izorskey Zavod Zvyezdochka Yard StPetersburg Severodvinsk 10.12.15 26.10.15 3 3 Krasnaya Kuznitsa Yard Severnaya Verf Arkhangelsk StPtersburg 27.11.15 23.09.15 Petrozavodsmarsh Batiyski Zavod 6 Mechanical Workshop StPetersburg Petrozavodsk 24.09.15 1 30.11.15 8 1 Admiralteiskiye Verf 4 StPetersburg 25.09.15 & 25.11.15 Atommash Volgodonsk 03.12.15 Kliver Verf Kliver Verf Kaliningrad Kaliningrad 15.11.2016 05/06.10.2015 ZiO Mechanical Workshop Podolsk 5 26.11.15 Yantar Verf 2 Kaliningrad 06.10.15 7 7 The Pre-qualification Process NorManSolutions How to qualify as a Contractor and a Supplier Client preparations and actions: 1. Screening Process: Desk Top study > Long List > Short List > “Statement of Interest”- letter. 2. Visit Contractors/Suppliers facilities. 3. Assessment of incoming Pre-Qualification Questionnaire > make final Short List of Bidders. Contractor/Supplier preparations and actions: 1. Establish Business Development plan and concentrate on Target Project. 2. Start making THE Winning Strategy and evaluate the Risk. 3. Keep your Internet page up to date on a monthly basis. 4. Make contact with the Target Project Client. 5. Complete the Pre-Qualification Questionnaire. 1. Minimum Attachments: 1. Yard/Shop Layout incl. pictures. 2. Sequence of Fabrication incl. pictures. 3. Major Projects of similar nature. 4. If requested, submit: Company Standard Sales Brochures. (E-mail or by Courier) 8 The Tendering Process NorManSolutions Winning strategy and risk evaluations. WINNING STRATEGY RISK EVALUATION 1. Establish Risk Register 1. Product and Technology 2. Contractor’s Risk (your own) 2. Client Relations 3. Your Sub Contractor's Risk 3. Country Relations (export) 4. Engineering Risk 4. Sales Capability (tendering) 5. Procurement Risk 5. Project Execution (capacity) 6. Labour Productivity Risk 6. Capability / Partners 7. Schedule Risk 7. Profit Expectations 8. Quality Risk 8. Resources / Capabilities 9. Extra Work Risk 9. Additional Strategic Value “Never take a RISK that you can NOT handle” 9 Establish a Risk Register during the Tendering Process NorManSolutions Customer gives Tender documents to be compared with Mandatory Contractor’s legal Business Norms Items in Description of Customer Description of Contractor Gap Analyses with Tender documents Tender documents Business Norms comments and proposals Terms & Conditions Legal framework for the Contract A: Scope of work What to deliver B: Compensation How to get paid for Scope of Work The C: Contract Schedule When to deliver Scope of Work difference D: Administration requirements How to handle the Contract between E: Technical requirements/Specifications Standards, Norms and Quality of Work What Risk ACCEPT can and NOT Drawings for Scope of work F: Drawings and Technical Documents Contractor ACCEPT G: Purchased Provided Items Company Provided and LLI ACCEPT H: Agreed/Nominated suppliers By Company and Contractor and NOT ACCEPT? and I: Procurement and Material Procurement and Material proposed J: Standard performance guarantee By Contractor and Subcontractors SOLUTIONS K: Insurances Min requirement. Contractor propose ! L: Supplier’s proprietary information NDA and Patents M: Bank Guaranty/Parent company guarantee Company requirements 10 Establis a Winning Strategy prior to the Tendering Process NorManSolutions 1. INTRODUCTION TO THE PROJECT 6. ACTION PLAN – for Tendering 1. High level 7. PROJECT INFORMATION 2. BUSINESS OPPORTUNITY 1. Description of Project in Detail 3. VALUE – commercial and product 2. Previous work performed to Field/Client 4. SUCCESS CRITERIA TO WIN 8. COMPETITOR ANALYSES 5. WINNING STRATEGY 1. SWOT analyses (Strength/Weakness/Opportunities/Threats) < 1st issue in Pre-qualification period > 1. Product and Technology 9. RECOMMENDATIONS: Go/No go 2. Client Relations 1. Based on TOA analyses 3. Country Relations (export) (Initial 1st TOA - Target Opportunity Assessment) 4. Sales Capability (tendering) 10. Short version for Upper Management 5. Project Execution (capacity) 1. Some 5-10 PPT slides 6. Capability / Partners 7. Profit Expectations 8. Resources / Capabilities 9. Additional Strategic Value 11 NorManSolutions Russian Regulatory navigation 10% “Never take a RISK that you can NOT handle” 12 NorManSolutions Russia and Norway is organized differently in the Oil & Gas Industry NORWAY RUSSIA Norwegian O&G Russian O&G Company Company No ownership Ownership Norwegian Russian Design Shipyards Supply chain Engineering Norwegian EPC Institute (RDI) Company Company Independent + Engineering Company Russian Design Constructability Institute (RDI) included in design Independent Shipyards 13 NorManSolutions Overall Russian power System State Power State Power Independent branches Legislative Executive Judicial Federal Prime Minister and System of Federal level Federal Assembly Government Courts Regulatory Issues Legislative Head of the region and Regional regional government body of courts subject of RF Regional level Regional 14 NorManSolutions RF government and Regulatory authorities (Updated Nov 2014) RF President Ministries and Services Reporting to RF President Reporting to Federal Assembly Foreign Afairs Justice Federal Security Service Accounting Chamber RF President Administration Internal Afairs Civil Defence Foreign Intellig. Service Prime Minister Defence Federal Protection Service Regulatory First Deputy PM PM Administration Federal service for Responsibility technical and export control Deputy PM Deputy PM Deputy PM Deputy PM Deputy PM Deputy PM Ministries Energy Natural Resources Healthcare Construction Economic Transport Industry and Finance Agriculture and Development Trade Environmental Federal Agency for Federal Agency Federal Autonomous Federal Service for Hydrometeorology and for Water Institution “Main State Property Federal Agency Federal Agency for Federal Federal Environmental Resources Department of State Management for Sea and Technical Taxation Agency for Monitoring Expertize (RosImushestvo) Inland water Regulation and Service Fishery (GlavGosExpertiza) transport Metrology GGE (RosStandard) Federal Agency for Federal Mineral Resources Forestry Agency Federal Custom Federal Service for Federal Agency on Federal Service for Federal Autonomous Agencies Service Ecological, Consumer Rights Transport Institution “Russian Technological and Protection and Human Supervision Maritime Register
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