The document outlines the work breakdown structure (WBS) for the Horse Hill field development project in the UK. The WBS includes six main stages: 1) evaluating the UK's fiscal systems, 2) analyzing potential partnerships, 3) additional exploration drilling and appraisals to determine reserves, 4) a feasibility study, 5) a final investment decision based on available financial options and estimated costs, and 6) detailed engineering, construction, procurement, installation and commissioning of required facilities by an EPCI contractor. The WBS provides a hierarchical structure to plan and manage the complex project while accounting for risks in the oil and gas industry.

1. Published: February 20, 2016
Work BreakdownStructure for Exploration for Petroleum Resources
Introduction
Exploration for petroleum resources is a complicated process that not only requires technology
but also performs seismic surveys and drilling operations. It also involves regulations set by
the government under countries’ laws, the acquisition or lease of acres, permits, create and
manage licensing partners, negotiating contracts and working with new and innovative
technologies and geological complexities and countries’ politics. According to Inkpen and
Moffett (2011) “The upstream part of the life cycle of oil and gas exploration is the first part
of the total value chain that consists of upstream, midstream and downstream activities.” EKT
Interactive (2015, p. 8) stated that the most complicated process in the petroleum supply chain
is the ‘upstream sector.'
The various stages of a field development project
The life cycle of a petroleum field development start from the identification of an area through
several stages all the way to the abandonment of the field. According to Inkpen and Moffett
(2011, p. 83), the stages goes from approval and access to the licenses, appraisals, and analysis
of the field and recoverable assets through explorations, evaluate financial options and
contractual agreements based on recoverable assets that are evaluated. Based on this, a ‘final
investment decision’ is made for the development of an oil field and production can start, and
revenue is created based on, i.e., conceptual, feasibility, FEED, design, construction,
productions, and export (Inkpen and Moffett, 2011).

2. However, field development projects have multiple ‘gate stages’ that one has to pass where
‘go-no-go’ decisions are made and for new field development projects have five ‘distinct
components’ that must be entrenched methodically to maximize the effectiveness of a project
(Barnett, 2013):
 A robust charter,
 A strong risk management approach,
 A solid launch plan that integrates all components,
 A strong governance of the projects where all senior level management are part of and
is accountable,
 Clear ownership structures with responsibilities for the processes.
Evaluation and work breakdown structure of the Horse Hill field development project
The Horse Hill field held two licenses (i.e. PEDL 137 and PEDL 246) and was a significant
discovery based on initial flow testing. They estimated the field to be of 100 billion of barrels
of crude oil, and 5% to 15% is recoverable (Moylan, 2015).
Oil and gas development has become both costly and technologically challenging to IOC’s and
more so when exploration activities go into the deeper water with higher temperatures and
higher pressures with geologically challenging formations (Inkpen and Moffett, 2011). On the
other hand, the Horse Hill development project is an onshore field development project that
has despite its size, less cost hurdle than an offshore field development project would face
(Moylan, 2015).
A complex development project requires carefully planning. For the project to be lifted off the
ground, a work breakdown structure (WBS) must be created that can identify the different
stages in the development. The WBS is the project ‘recipe’ and a key document that gives the
project manager a vision of what to be delivered. It is a ‘hierarchical decomposed’ manageable
structure created based on “inputs, tools, techniques, and outputs” that has a top-down approach
typically with work packages at the lowest level (PMBOK Guide 2013, p.119).
The Horse Hill project undergoes six stages as suggested in the WBS in figure 1 that has
intentionally left out the abandonment phase, as this can be 20 to 25 years into the future. The
project manager must perform an evaluation of the UK’s fiscal systems that has a “concession
system, profit-based special taxes, corporate income tax” that will have an economic impact
on the project and its financial decision (EY, 2014, p. 594). Then analysis and make decisions
on partnerships to be ‘farmed-in.' Further, one has to evaluate possible concept to be used and
then perform additional exploration drilling appraisals that will determine actual reserves.
The UK government has already approved the exploration drilling campaign (Robertson and
Masud, 2015). Moreover, a feasibility study must take place to analyze the possibility of
producing real crude that will lead to a scope of work, i.e. project charter that will give rise to
a final investment decision based on those financial options that are available based on actual
reserves and the estimated costs of development.
The decision in this WBS is based on a full turnkey solution with an EPCI contractor that will
be responsible for the whole project scope, including a detailed engineering, construction,
procurement, installation and commissioning of the facilities required as per figure 1:

3. Fig. 1 “Work Breakdown Structure” for “Horse Hill” Field Development
Source: Sudenius (2016)
An oil field development is a high-risk approach with a volatile market, and that has
environmental conditions, and one has to consider the overall contractual risks involved before
making the decision (Galli, Armstrong and Jehl, 1999).
References:
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Galli, A.G., Armstrong, M. & Jehl, B. (1999) ‘Comparison of three methods for evaluating
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4. Inkpen, A.C. & Moffett, M.H. (2011) The global oil & gas industry: management, strategy &
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