key to a successful egtl site

EGTLKEY TO A SUCCESSFUL SITE

Tom Beck Executive Project Manager

Nick Tasker Contract Manager

Jochen Stolle Operations & Deputy Project Manager

Hans Grabow Commercial Manager

Executive Summary

Only six months before completion, the Gas to Liquids Project in Escravos continues to be one of the major topics of conversation within the Bilfinger Berger group of companies. Evidently, the projects commercial results are exceeding initial expectations and the achievements in the fields of quality, health, safety and environment are outstanding. Apparently there are countless factors throughout the lifetime of a project that have the ability to influence the final outcome and it is the duty of the management of the project to identify and control such factors. Upon inquiry from corporate management this report was compiled, emphasizing on the most important features that contributed to the success of the project.

It is the authors intend to record what is necessary to make a particular site such as the Escravos Gas to Liquid Project successful so the lessons learned can be applied to similar sites in the future.

With 23 December 2005, Julius Berger Nigeria PLC and Bilfinger Berger Nigeria GmbH have entered into agreements with Southern Gas Constructors Limited (SGC) and Charville Consultores E Servicos Lda respectively, to carry out general civil, piling, wharf and building engineering, procurement and construction works for the Escravos Gas to Liquid Project in Nigeria´s Delta State under an awarded Subcontract No. 6327-ON/OF-K-011. The nature of the project required thorough and detailed planning and programming, and tight control of the execution of all aspects of the Works, including those relating to quality, safety, communication and interfacing with all interested parties on the project, was implemented and consistently maintained.

This was achieved by putting particular emphasis on expertise, experience, reliability and on establishing, implementing and maintaining high quality standards and strict compliance with defined practices and work methods.

To ensure such high standards and compliance with all pertinent subcontract requirements are achieved, Julius Berger Nigeria PLC and Bilfinger Berger Nigeria GmbH undertook to manage the works in a systematic and thorough manner by establishing a coherent and integrated system of documented practices and plans, describing resources, work methods, verifications and activities, including respective internal and external reporting, to ensure the project objectives are consistently met for all aspects of the works.

To provide essential security for all personnel on the Escravos Gas to Liquid Project a closed camp with extremely high security controls had been established. 24-hour access control, restrictions and bans on visitors made working and living within this environment a rather unique and challenging experience for all employees and relatively early into the project it became obvious, that not all technically qualified personnel would be able to perform under such conditions.

EGTL Subcontract 6327-ON-K011EGTL - Key to a Successful SiteManagement Narrative

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Table of ContentsExecutive Summary01. Project History...........................................................................................................3

The EGTL Project......................................................................................................3Site Conditions...........................................................................................................3JBN Scope of Work....................................................................................................3

K011: General Management...........................................................................3K011-02: General Civil....................................................................................4K011-03: Piling................................................................................................4K011-06: EPC Buildings..................................................................................4K011-08: EPC Wharf.......................................................................................5K011-09: Batch Plant Services........................................................................5Time Extensions and Additional Works (see Attachment)...............................6

2. Involvement of Execution Members during the Tender..................................................6Tender Team.............................................................................................................6Implementation of Special Conditions........................................................................7Early Start Advantage................................................................................................7

3. Key Personnel kept on Board during Project Period..................................................8Project Management Team........................................................................................8Site Engineer / Wiesbaden Project Coordinator Exchange........................................8

4. Strong Contractual Management...............................................................................85. Lean but Unified Project Team..................................................................................9

Project Team Size and Organisation.........................................................................9Rotation System.......................................................................................................10Mix between Young and Experienced Crew Members............................................11

6. Strict Controlling Procedures...................................................................................11Schedule.......................................................................................................12Arriba Working Estimate................................................................................12Excel performance look ahead......................................................................12Personnel Histograms...................................................................................12Equipment Histogram....................................................................................13Material Requisition Program........................................................................13

7. Temporary Works Setup............................................................................................148. Quality Management System...................................................................................149. Health, Safety and Environment Management System................................................1510. Tight Security Setup - Minimal Material Losses.......................................................1611. Teambuilding...........................................................................................................1712. EGTL Social Conditions...........................................................................................1813. Lessons learned.......................................................................................................19Close Out Statement0

EGTL1-JBN-CIV-PL-009999 Rev.: D1_30.07.2011 Page 1


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1. Project History

The EGTL ProjectThe Escravos Gas to Liquids facility (EGTL) converts natural gas feed into high quality, environmentally superior liquid GTL fuel, naphtha and LPG products. The facility feed is approximately 320 million SCFD of natural gas and the facility produces approximately 33,000 barrels of products per day.

The EGTL facility is situated on the western bank of the Escravos River tidal outlet, in the Niger Delta about 2 km north of its confluence with the Atlantic Ocean on the Bight of Benin approximately 170 km south east of Lagos, 60km west of Warri, Nigeria.

Site ConditionsUp to 2002, the area was originally a mangrove swamp in a flat coastal river location. The site was cleared of vegetation during 2001, and in 2002 Chevron Nigeria Ltd. (CNL) commenced with the ground improvement works, which continued until November 2005. The works included the deposition of various thicknesses of sand fill by placing an up to 8 meters thick layer of hydraulic fill from dredged sand to a level of between + 3.0m and +3.5m above LAT, the installation of a deep wick drainage system and the temporary lowering of the ground water levels.

JBN Scope of WorkIn December 2005 the General Civil Works Subcontract for CNL´s Gas to Liquids Project at Escravos had been awarded to Julius Berger Nigeria PLC (JBN) and Bilfinger Berger Nigeria GmbH (BBNig) respectively at 128.7 million Euros and a construction period of 26 months. Due to major work scope increases and accompanying construction time extensions, the expected final contract value will exceed 385 million Euros and the construction period will extend beyond 70 months.

The subcontract is subdivided into the following portions of the works:

K011: General Management

The General Management package covers all other subcontract packages and contains management and general staff not assigned to any of the other individual work packages. Additionally it includes engineering and procurement activities, mobilisation, maintenance and demobilisation of temporary site offices and yard facilities, on- and offloading facilities and equipment to execute the works.



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K011-02: General Civil

The K-02 work package titled General Civil Works includes but is not limited to, site preparation and development, foundations, sewer and drainage, temporary and permanent roads and paving, concrete and net wire fencing and gates, concrete trenching, pits and ponds, pipe sleepers, retaining walls and oil dikes, pre-cast concrete structures and foundations.

Final key quantities for the K-02 General Civil Works Package are:

Earthworks: 380,000 m3

Concrete: 130,000 m3

Reinforcement: 13,000 tons

Slope Protection: 15,000 m2

Concrete & Gravel Pavements: 190,000 m2

K011-03: Piling

The K-03 work package titled Onshore Piling Works covers the procurement and installation of onshore steel piling of various lengths and diameters, including pile production, installation, load testing and pile head treatment.

An additional scope for the supply and installation of 1,320 concrete piles in lengths of 18 meter for the main camp was also awarded during the execution of the piling works.

Final key quantities for the K-03 Onshore Piling Works Package are:

Steel Pipe Pile Production (dia. 610-760mm) 44,100 m

Steel Pipe Pile Installation (length: 17-47m) 1,450 no

K011-06: EPC Buildings

The K-06 work package titled EPC Buildings covers the engineering, procurement and construction of buildings with a combined floor space of approx. 7,000m2:

Administration / Control / Laboratory Building

Work Shop / Stores Building

Gate House

Operator Shelter

Catalyst Storage Shelter

Rain- & Smoking Shelters

Bicycle Shelter



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Administration / Control / Laboratory Building

K011-08: EPC Wharf

The K-08 work package titled EPC Wharf covers the engineering, procurement and construction of a wharf with operations building, a segregated personnel embarkation and disembarkation area with jetty and reception building for use by the EGTL1 and EGP3 Gas Plant projects. The wharf structure consists of 330 coated steel pipe piles and a Wharf deck area of 6,500m2.

EGTL EPC Wharf under construction

K011-09: Batch Plant Services

The K-09 work package titled Concrete Batch Plant covers the mobilisation, operation and maintenance of two concrete batch plants capable of producing 50m3 of concrete per hour each; complete with auxiliary facilities and the provision of aggregates to supply mainly two types of concrete: Type I, grade C15 and Type II, grade C35. Various other types of concrete, grouts and sand-cement mixes are provided as required by the project. Included in the scope of supply is a laboratory for testing activities. The total quantity expected to be produced until project end is approximately 220,000m3.



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Time Extensions and Additional Works (see Attachment)

From the very beginning, the project team encountered various difficulties in mobilizing to site such as restricted access, community disturbances and unsuitable yard and lay down areas. All the obstacles encountered at project start were not attributable to Julius Berger Nigeria. This resulted in a consequential delay of roughly 9 months in the mobilisation for the site works.

Approximately 68% of the total increase in contract value is attributable to additional work scope executed by the project team on site. Among others, additional scope items included such works as concrete pile installation, main camp foundation construction and civil works for additional process and utility units. 27% of the increase in contract value is a consequence of the prolonged duration of the subcontract schedule and the remaining 5% of the increase in contract value are required to compensate for the rise in uncovered escalation costs.

2. Involvement of Execution Members during the Tender

Tender TeamIn the year 2003, JBN was approached for the first time to prepare a tender for the EGTL Project. The tender process continued throughout the year 2004, during which a memorandum of understanding, covering the exclusiveness of JBN for the civil works, was signed with the EGTL Joint Venture.

The tender was prepared by a dedicated and specialized tendering team formed by BBNig in Wiesbaden. Commencing with the early re-tendering phase in the year 2005 the team was supplemented by the Contract Manager who had already been nominated for the execution of the project by JBN. Additionally, the nominated Executive Project Manager joined the team during the final stages of the tendering, providing JBN with the advantage of having early insight into the project and having a major opportunity to provide its input during the final contract negotiations.



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Implementation of Special Conditions During the evaluation of the subcontract documents by the nominated Contract Manager, the tender team implemented changes to the subcontract language, modified the special conditions of the subcontract and, in particular, added an appendix in which JBN´s specific details, conditions, assumptions and work methods were documented.

The changes set forth include areas such as indemnity, community and labour issues, as well as specific details on quantities, scope definitions and self-sufficiency during the start-up phase of the project. This appendix and other changes to the language of the special conditions of the subcontract, reduced the risk on the part of JBN and separated the back to back situation between CNL, SGC and JBN and enabled the site execution team in retro respect to take its clear and if necessary aggressive contractual position towards the main contractor and to execute its works in accordance with proven JBN methodologies using available equipment and services.

Early Start AdvantageAnother advantage of having execution project members on board during the tendering phase was that in the time period between subcontract award in December 2005 and mobilisation to site in April 2006 the preparation and implementation of contractual relevant project management plans could go ahead. Documents which allowed the works to proceed in a systematic and thorough manner included project execution, procurement, Nigerian content execution, personnel mobilisation and work shift and security plans.

At the same time, quality management system, HSE management system and security management system documentation was drawn up and submitted.

In addition to being prepared on the contractual and documentation aspect in depth work preparation was also commenced at this time.

In contrast to the preparation started by JBN the clients team was not yet prepared and by no means able to start planning the execution of the works in the same detailed level and was in several occasions completely unprepared for the situations arising.



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3. Key Personnel kept on Board during Project Period

Project Management TeamJulius Berger Nigeria PLC successfully kept its project management team on site at all times giving the advantage of having in depth knowledge of the site, the sites history and the special working conditions within the Escravos environment, as in contrast to the client who changed its project management team and resident managers frequently.

Julius Berger Nigeria PLC´s project management team includes the following personnel:

Executive Project Manager Tom Beck

Contract Manager Nick Tasker

Commercial Manager Hans Grabow

Site Engineer / Wiesbaden Project Coordinator ExchangeDesign, engineering and procurement on large scale projects within the Bilfinger Berger Nigeria GmbH and Julius Berger Nigeria PLC structure are traditionally done through technical and commercial support departments located in BBNig´s offices in Wiesbaden. In order to counter any loss of information in the transfer from Wiesbaden to site and vice versa a system of knowledge exchange between the Germany based project coordination group and the site execution team has been set up in the early stages of the project (O. Berger / J. Stolle rotation arrangement). This exchange of personnel between the construction site and Wiesbaden twice a year allowed for a much better know how transfer and with it a design, engineering and procurement process streamlined to suit the special needs of the remote and challenging EGTL site.

4. Strong Contractual ManagementFrom the beginning the contracts department followed a methodology of strong claim perspective with a regular and consistent follow up of all contractual issues. This resulted in over 2,500 formal letters being issued to the client and in excess of 800 Subcontractor Change Order Requests or Notifications being issued to the Client and subsequently negotiated and consolidated into over 125 formal Changes in the Works adjusting the subcontract price.

A major milestone within the changes of the contract were the negotiations for time extension and subsequent change in the valuation of all time related costs, which from that time included all management, yard facilities and equipment on site (known as the CITW 50 talks).



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5. Lean but Unified Project Team

Project Team Size and OrganisationThe size of the project execution team on site has, compared to the tender estimate, been kept to a minimum. The team had been chosen by the executive management and a significant number of key personnel have had previous working experience with their colleagues and at the execution of similar projects. This circumstance allowed for the setting up of a trustworthily independent site organisation and the decision making processes being retained on site. All communication with the client and any other internal and external parties were strictly channelled through the project management and clear job assignments were introduced to each staff member. The chosen setup with strong internal controls reinforced the team position of Julius Berger Nigeria PLC on the project site and prevented the team from the exertion of influence by the client and other external parties.

The introduction of valuable but relatively inexpensive third country nationals either directly employed or provided through Subcontractors such as LRP has helped to keep supervision and management costs within budget. The staff recruited from Eastern Europe and South East Asia was installed into the site organisation with equal rights and duties, enhancing the team spirit further.

It should also been mentioned that an outstanding performance has been achieved by the EGTL Nigerian Senior Staff on site replacing in some cases the need for expatriate personnel.

Large scale engineering and design was consequently referred back to Wiesbaden, saving the costs of a designated engineering team on site and at the same time adhering to the design requirements as stipulated in the relevant specifications of the subcontract. Additionally, this process was supported by the frequent exchange of engineering management personnel between Wiesbaden and EGTL site.



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Rotation SystemSite working hours are contractually defined as 11 hours per day, 7 days per week, and 365 days per year. In order to allow working these extended hours a rotation system has been established on site. Each expat and HVE staff member is given the possibility to leave Nigeria during his free turn.

Until February 2008 the initial rotation system of an 8 week work shift with a 3 week free turn was maintained. It was the first time ever in the company’s history that such a scheduled work period regulation to balance the long working hours and the hardship on site was implemented and the consequences upon the personnel and likewise the performance were unascertained.

Two years into the project however the long term effects of the working environment and the workload were distinctly perceptible. Due to the harsh working conditions, the morale of individuals and thereupon the team dropped significantly. It was a fact that after a long period the performance of the team was reduced and relationships on site were becoming stressed and conflicts were developing.

In March 2008 and taking this negative development into account, the rotation system was modified from an 8 week work shift to a 6 week work shift with a 3 weeks free turn to counter the increasing deterioration of the physical and psychological stability of the EGTL employees.

Through the introduction of this improved rotation system a fundamentally attractive work environment had been created in Escravos, increasing the opportunities to attract above average performing personnel with a high level of experience, leading to a mind-set of clear dedication and identification with the project and its systems and increasing the willingness to go the extra length to achieve results beyond what has been expected. By strict compliance with the rotation system also allowed personnel in Escravos to live a regular family live with planned recreation times, even though the site was running 365 days a year without interruption.

Introduction of field execution teams, each consisting of 3 supervisors of which 2 remain on site whilst the third is on free turn established a team spirit within each group and eliminated handover processes. This eventually led to high responsibility awareness by each individual member for the group and increased flexibility.



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Mix between Young and Experienced Crew MembersOn the site in Escravos, the team of area managers and site engineers has necessitously been of very young age; mostly just making their first experiences on a construction project the size and the level of difficulty of Escravos. Fundamentally however, the Escravos site team has been based around experienced performers. The decisive positions such as the Project, Contract, Construction, Technical, QQ/QC and HSE managers was staffed by reliable, well known personalities with long-standing experience in the field of large scale construction projects. Only through the limitless preparedness of these key figures to pass their knowhow and experience to their lower ranks it was possible to properly position the young engineers.

Additionally, the project kicked off with experienced supervisors that have, over the course of time been supplemented with younger supervisors getting their first experiences in working overseas.

The subcontract calls for a strict implementation and obedience of quality assurance, quality control and health, safety and environment policies and regulations. Compliance has been achieved by introducing specialised and experienced personnel to the project, previously associated long times with the international division of the Bilfinger Berger group.

A further step in developing the construction team into a coherent force has been the establishment of the rotation system under the conditions in Escravos, requiring increased planning efforts and partial job sharing to cover for each individual team members’ free turn. This has in particular in the construction management level, opened opportunities for area managers and site engineers to step into higher levels of responsibility, achieving a great level of on the job training and experience as well as making the job description of each individual more interesting.

6. Strict Controlling Procedures Basic project reporting and controlling systems in accordance with external contractual and internal requirements have been implemented during the early stages of the subcontract. Each individual controlling instruments has been updated on a weekly and monthly basis. Major revisions have been made for major changes of the subcontract as required;

Schedule

Arriba Working Estimate

Excel Performance Look Ahead

Personnel Histograms

Equipment Histogram

Material Requisition Programs



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Schedule

The subcontract for the Escravos Gas to Liquids Project dictates the maintenance of a hierarchical scheduling system to be used as a basis for detailed schedule monitoring and progress control. The program chosen by the subcontract for scheduling purposes is the Primavera enterprise level scheduling tool. The schedule is built up from level 2 onwards and fully resource loaded in order to allow easy access to manpower schedules and progress curves.

All schedule updates have been executed by the Project Manager giving him in depth knowledge of the works and an advanced negotiation position during time extension talks.

Arriba Working Estimate

Upon subcontract award, a major effort had been put into the award estimate to match the actual agreement. This award estimate had been presented during a kick off meeting prior to commencement and handed over from the tender project management in Wiesbaden to the execution project management in Nigeria.

Experience shows, that Arriba has proven to be an unsuitable tool to steer a site that is developing away from the original subcontract the way the Escravos project did, unless an extraordinary proficient Arriba specialist with experience and knowledge of the software itself, the project, the construction industry and execution and the specifics of Bilfinger Berger and Julius Berger operations in Nigeria is employed to handle the task. To bypass this impossibility, performance forecasts where calculated on Excel spreadsheets and quantity versus cost comparisons were run in an Arriba and Excel Combination.

Arriba performance reporting files were only updated and used on a monthly basis to satisfy the requirements of the headquarters in Abuja to deliver the required controlling mechanism and print outs.

Excel performance look ahead

As a further step into simplifying the steering of the site the Arriba print out “Leistungsmeldung” was used to compile a monthly performance look ahead (Kosten-Termin-Plan) in Excel. This look ahead incorporated changes in the work whilst still under preparation which, based on corporate controlling guidelines could not yet be included in the Arriba reporting system. This tool was prepared and updated by the project management based on latest schedule information and distributed within the team for review and further input.

Personnel Histograms

Detailed personnel histograms have been developed and updated with the progress of the works and changes in the contract duration. The personnel histograms are based on the tender estimate as well as the experience of the construction and project management for the works in hand.



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Equipment Histogram

Concurrently with personnel, equipment histograms and detailed tables on planned equipment new value, rent and repair fees have been compiled and updated on a monthly basis. The originator and updating capacity of the tables has been project management with input from the construction and equipment managers.

Material Requisition Program

To ensure efficient procurement of permanent and temporary materials, the teams on site and in Wiesbaden used local and international resources to expedite materials in order to avoid any detrimental impact on the timing and quality of the project.

It was the client’s responsibility to provide timely material approvals and to agree on change proposals should materials not be available in time or in quantity or quality required. An approval time had been included in the subcontract and, if a response was not received within this specified approval period upon the clients’ receipt of any material approval requests, the material was deemed approved.

All offshore materials were purchased by the procurement team in Wiesbaden and all respective documentation for custom clearance procedure was provided by the export team. Procurement requirements and design pre-requisites with respect to timely procurement were laid down in the schedule. Weekly updates did provide information on critical material expediting issues helping to avoid delay.

A particular responsibility is being taken by the various logistics departments. Whilst Bilfinger Berger Nigeria GmbH takes the responsibility for overseas deliveries and shipments up to the Nigerian ports, any distribution within Nigeria is being handled from within the project site. The coordination of an average of two barge trips from Lagos and Warri each per week including respective loading and unloading activities required an enormous personal effort from the designated beach master in collaboration with the projects commercial management and the respective departments of the client. Thereby, Julius Berger Nigeria PLC´s own and well thought-out jetty facilities in Escravos provided a major advantage and additional income could be generated by allowing other participating contractors to use the facility in return for regular payments.

Wherever possible, Julius Berger Nigeria PLC´s store management endeavoured to source material on the Nigerian market. The importance of the local store management on a remote site such as the Escravos project cannot be overemphasized. Personnel commitment is a prerequisite for the daily progress in the field as careful planning and organisation of future requirements to execute the works but also to fulfil basic essentials of life are necessary. In Escravos, this mother-like authority was taken by the store manager who thereby became another key player.



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7. Temporary Works SetupAlready early into the subcontract it became evident that the EGTL project needed a high degree of freedom and autonomy. The logistical challenges made it seemingly impossible to outsource major services such as reinforcement preparation and precast concrete production. The site management therefore decided already on a very early stage to set up its own reinforcement yard managed by an experienced Southeast Asian engineer. Bar schedules were produced on site allowing for an immense flexibility. Consequently, the Escravos project never experienced any delays in the fabrication of reinforcement and managed to pre-fabricate major reinforcement structures which sped up the site installation processes. It is further a proven fact that the reinforcement wastage factors in Escravos are distinctly lower than on other projects in Nigeria.

The initial set up of having required precast elements produced off site in JBNs various precast yards in Lagos and Abuja was revised in the year 2008 when the subcontract for a major and complicated precast structure was awarded to JBN. It took only six weeks to set up a precast yard on site and upon completion, the benefits of an own yard became immediately apparent. Elements could now be produced just in time eliminating the need for large lay down areas and the quality of the elements was now controlled. Several additional works were only awarded to JBN because of the existence of such a precast yard.

8. Quality Management SystemAs with the practices to protect health, safety and environment on site the administrative requirements for a quality assurance and quality control system are regulated in the subcontract documents and Julius Berger Nigeria PLCs corporate management is periodically required to perform formal quality system reviews of the work and to assess the status and the adequacy of the works performed in relation to its internal quality policies.

Although, and particularly during the early stages of the project, the system implemented by the project management met considerable resistance by long term Nigeria experienced personnel, the advantages of such a system were finally accepted. The strict compliance with the system regulations, although not being above average if compared to worldwide accepted industry specific standards, has helped to avoid errors during the construction and the requirements to execute remedial actions were minimized.

In addition, the requirement to compile method statements prior to the execution of any task has helped the field personnel to think their way through and streamline the construction process, evading some of the hurdles otherwise encountered during the actual construction process.



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9. Health, Safety and Environment Management SystemHealth, safety and environment regulations and performances are a key issue within the Escravos Gas to Liquid Project subcontract. During the tendering process past performances of the respective bidder in this regard were evaluated and submissions of preliminary plans and procedures were obligatory.

The project requires a designated site representative in charge for health, safety and environment with one subordinated officer for each 50 employees. Additionally, obligatory training on basic health, safety and environment principals is provided to all employees prior to commencement on the work site and the Incident and Injury Free culture promoted on site.

The unconditional implementation of the rules required under the subcontract has consequently led the site team to engage into the culture and perform outstandingly as evidenced by the creation of a work environment where virtually no major accidents happened and the ultimate goal of 10 million man hours without an injury with time loss has been achieved. The result was a morale boost within the workforce who realized that work without major accidents is possible on large scale construction projects without any detrimental effects on quality and schedule.

These achievements however were by no means a quality of being implicit. In contrary, the Escravos project too had to learn its lessons the hard way. Three lost time injuries occurred during the first two years of the project. These injuries cost the project a total of 92 work days in addition to the disintegration of the client’s confidence towards Julius Berger Nigeria PLC´s ambition and abilities. It was found that in particular personnel with long-standing employment in Nigeria proved to be the major challenge and to some degree exhibited a lesser knowledge or lack of interest in the projects requirements and objectives.

The site team, especially the supervisors had to go through a whole attitude change before the required performance could be achieved. Mandatory participation either by group or individual safety training sessions were introduced with the result that the creation of an incident and injury free environment became a reality.



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10. Tight Security Setup - Minimal Material LossesThe southern part of Nigeria regularly experiences localized civil unrest and violence. States where outbreaks of violence have occurred include the oil-producing region of the Niger River Delta where foreigners have frequently been threatened and held hostage. In addition, inter-ethnic fighting as well as frequent strikes of the national labour unions further increase the security risks. No connection to the Nigerian road system exists, access to site is either by boat or aircraft through the private Chevron air strip only.

This remote location has allowed for a tight perimeter security setup by Chevron, basically controlling each shipment to and from site. This has given Julius Berger Nigeria PLC the advantage to run a site where virtually no theft of material and fuel loss is encountered.

Nevertheless the threat from within the fence remains. Nigerian laws and the client’s local content policy required that 40% of the work force are recruited from the surrounding local communities. Julius Berger Nigeria PLC´s input in the selection process of such workers was extremely limited as this has been executed in the clients centralised community opportunity offices in Warri, solely by the client’s representatives. Quite obviously, the employment of larger groups of such community workers was enforced by the community leaders in an attempt to create an environment in which hostile behaviour, strikes and attacks on fellow employees and employers can be organised and executed at any time. The so called “community boys” duty includes but is not limited to disrupting the works to slow down the progress, intimidating and blackmailing superiors and fellow workers to aggravate performance and enforce that subcontracts are being let to their leaders. In such an environment, security, community and industrial relations issues are all being linked together. Julius Berger Nigeria PLC too had several offensive encounters in this regard.

Before all else the nomination of a full time expat security officer by the client has helped to increase trust for the project security provisions. The professional security officer reported directly to Julius Berger Nigeria PLC´s project management and had established in the shortest time possible tight access controls into the yard and the work areas and ensured that all security protocols are adhered to. Secondly a Nigerian industrial relations manager with long-standing professional experience was employed to take over the responsibility for community and trade union management taking away this interface from the projects line management.

Both measures have contributed to a significant reduction of the escalating violence and had the quality of tending to restrict the power of the “community boys” and union representatives to act on their leaders behalf.



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11. Teambuilding In a site such as Escravos where it is remote, restricted access, confined living environment and the team that is always in each other’s company the mix of personalities and social skills is as important as the work performance of the individuals.

One of the biggest challenges is the formation of a unified team from individuals. The approach taken by project management was an open door policy engaging and encouraging all staff members on a daily basis to communicate and discuss relevant issues on a daily basis. Suggestions or problems brought up during these discussions have been taken seriously and whenever possible were addressed immediately. If options were available, preference to staff in leadership positions was given to those who would lead by example rather than by the position.

Regular team building events such as the Saturday grill party were introduced bringing together all staff members including the Nigerian senior staff members. These regular meetings proved to be a good opportunity to provide feedback from and to the staff on recent developments in Escravos or within Julius Berger Nigeria PLC and to introduce motivational incentives such as the milestone bonus agreements with the corporate management.

From the beginning of the project the Julius Berger Nigeria PLCs Nigerian senior staff were accommodated within the Berger village. This dramatically restricted tensions between expat personnel and Nigerian senior staff and helped to establish bonds between the different groups.



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12. EGTL Social ConditionsThe mental stress of the working environment in Escravos is indescribable and needed to be considered in the structure of the site team and the working and living conditions that were put in place.

It was therefore finally beneficial for Julius Berger Nigeria PLC that the client encountered massive delays during the early mobilisation phase in the construction of his pioneer camp.

Julius Berger Nigeria PLCs corporate management encouraged the site decision to build a separate camp for its expats and Nigerian senior staff. Upon completion, Julius Berger Nigeria PLC had its own accommodation facility on the construction site, fully in line with corporate standards and including all infrastructures such as electric power, potable water, sewage treatment, laundry service and supermarket. In the meantime, all other project personnel is still being accommodated in substandard camp facilities with frequent power outages and less then well maintained living quarters, which are operated on a hotel basis, rather than individually assigned quarters.

In addition and due to the unreliable telecommunication services provided by the authorities, the project management in Escravos approved the installation of internet connections in all accommodation units to enable staff members to communicate with their families at home via internet protocol phone services or to surf the internet. A squash court and training facility with first grade equipment were also established in an empty area within the main warehouse.

Although being now separated from the clients team and the security parameter established by client controlled security forces, the living conditions now encountered helped to keep up morale even under the most stressful situations such as extra-long working days or strikes.

The general administrative tasks such as flight bookings, transport arrangements and medical visits are being executed on site by a dedicated team. This release from administrative work kept each individual focused on the actual job at hand.



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13. Lessons learnedIt is important to realize that despite the success of the project there are many things that would have been done differently with the benefit of historical knowledge. Therefore in this last section, the author would like to take the opportunity to point out some but not all of the matters that were pointing the way ahead.

It is very likely that the involvement of designated key execution members during the tendering phase had a positive effect on the final contract documents and the initial work preparation for tendering purposes. Contract wordings and preliminary execution methods were already adjusted before the contract was signed eliminating extensive hand over processes and queries from the site. Once in Nigeria, the execution team already had sufficient in depth knowledge of the project and its particulars and was therefore able to perform its duties without delay. The collaboration between related companies allowed JBN from the very beginning of the works to present itself self-confident and that´s why this method for achieving results should unconditionally be continued for large or difficult projects.

The special rotation system amongst Oliver Berger and Jochen Stolle, both in the position of a site engineer was originally intended to be a temporary solution to facilitate their valuable participation on the project. From the beginning however the project management had concerns whether or not such a unique constellation would be acceptable to all members of the team. It is a fact that in the beginning of the project, when the site and its environment were particularly harsh and exhausting voices were raised and not necessarily everyone was in agreement of this special treatment. Acceptance however became present once the site was fully set up and the living and working conditions had improved. It also became obvious that this setup furnished the team with pricelessly advantages in the coordination of its engineering and procurement requirements. The value of such a system is apparent; its implementation however must be carefully considered and established only on a case by case basis.

Some Nigerian senior staff has developed very well throughout their employment and might be considered for managerial positions in the future. This testimony however is being restricted to administration, quality control, industrial relations and HSE duties. Not a single Nigerian employee has distinguished himself in a site engineer or supervisor role in the field. A reason might be that it is noticeable that expat field employees at this point in time would not accept Nigerian superiors or co-workers of equal rights, a problem that needs to be pursued over time.

A big success was the implementation of Southeast Asian and East European nationals into the field teams. The long standing working experience in and relationships to Southeast Asia of quite a few of the key management members made the employment and acceptance of these team members easier. Whilst it is a known fact that Philippine engineers are superior in the administration of quality and quantities, it is still relatively unacknowledged that Southeast Asia in the meantime also produces engineers and supervisors who are well capable to take over key responsibilities in the field.



Project Close Out

Escravos successfully replaced four expat supervisor positions with Thai and Romanian nationals. In addition, the reinforcement yard was solely and very successfully managed by a Thai engineer who also prepared all required reinforcement shop drawings on the site eliminating the need for expensive external services in this regard. The collaboration and supervision of Nigerian workers by Southeast Asian and Eastern European superiors functioned properly and the acceptance by other expatriate employees was high, the introduction of additional non-European staff in the field should therefore be expanded.

The importance of personnel with strong social skills cannot be overemphasized. Fortunately, Escravos had such personnel employed for the management of domestic procurements and the main warehouse. The organisation of barbecues, special dinners and parties, but also the running of a small but very important supermarket within JBNs accommodation complex including the acquisition of special food staff from Abuja lead to a priceless boost in moral and team building. As such people are extremely rare; their efforts should be officially acknowledged and supported by the corporate organisation.

It is unimaginable what it meant to live and work in the Escravos environment during the initial two years of the project. The 24-hour noise levels from the flare, the miserable accommodation standard, the non-existing social life and the permanent intimidation attempts by the communities brought all employees to and above the limits of their physical and psychological strength. A total breakdown of the site team was close-by. The reduction of the residence period in this environment was only an indispensable consequence to allow for the continuation of the project with the existing strong team. An unforeseen advantage that resulted from the change to a six weeks on and three weeks off rotation was the elimination of handover processes creating a very smooth workflow. In conclusion, the six weeks on and three weeks off rotation system offers the most feasible working cycle, producing the best results and should be strongly considered for future similar projects.

The long-standing employees in Escravos do now have all the tools and a mind-set not only to take responsibility for their own safety and quality of their work but also for the wellbeing and reliability of their fellow colleagues and workers. To achieve this status, persuasiveness and countless training and social sessions were necessary. As the positive effects of the creation of such a safe environment of high quality however are undisputable, the implementation of similar systems all over Nigeria is recommended.

A strong contracts management is a key factor in all gas and oil projects. In locations like Escravos, there are just too many unknowns during tendering and at the beginning of the works and the resulting risks and opportunities cannot be left unattended. In retrospect it is evident that the numerous changes in the client’s management and the major changes to the subcontract during its life time affirm JBNs approach to timely keep formal track of all relevant events.



Project Close Out

By its nature, the steering of the EGTL project proofed to be difficult, only a few employees had an understanding of the initial commercial and financial reports. Whilst the project management team members understood the complexity of the commercial reports, the initial systems as requested by the corporate management proofed to be unfit for the purpose and it took quite some time to develop and implement a comprehensive reporting system, adjusted to the requirements of the site which should have been developed already beforehand.

The dealing with security issues is an essential part of life in Escravos. Due to the fact that JBN had its own accommodation facilities within its allocated yard area and outside of the clients secured areas, an extra security setup was required. Contractually, it was clearly defined that it is the client’s duty to provide security for its subcontractors employees. The client however argued the relevant contractual clauses with the consequence that the JBN facilities remained unprotected. Amongst others, this fact allowed the occurrence of several aggressive attacks on JBN property and employees. These occurrences led to a change in the client’s position and the introduction of trained expat security personnel, reporting to and advising JBN´s Project Management specifically for the JBN facilities. From that point in time, security issues where handled professionally and no further incidents were reported, resulting in a very positive effect on the moral of all employees. JBNs project management clearly hesitated for much too long and should have taken the immediate decision to employ its own professional security personnel. Most probably such an act would have had a negative impact on the commercial negotiations with the client but damages to property and concernment of staff could have been eliminated or at least reduced. It is the authors opinion that the corporate organisation is partial responsible, should have noticed the deficiencies in Escravos and should have taken action by providing trained personnel at least on a temporary basis to bring the security provisions up to a good standard.

The management of the elected trade union members and the communities was initially executed by the project management. Also here, the contract required the client to deal with all issues arising in order to establish unified rules all over the project and for all involved subcontractors. This contractual structure however does not take into consideration that each company has its own structure and that Nigerians have a strong tendency to make dealings on a personnel level. This is not only extremely time consuming for the respective project management members, it is as well dangerous as the Nigerian individuals who are elected into union or community organisations are being put under immense pressure by their members and are prepared to use all legal and illegal means to achieve their goals. Evidently it is essential that a strong, experienced and loyal Nigerian industrial relations manager is being employed on similar projects from the very beginning.



Project Close Out

The equipment department within JBN owns an extremely important and powerful position. Whilst the departments personnel on site is embedded within the projects organisation and is disciplinary subordinated to the projects management, the service department itself is independent and reports to its division management in Abuja. The experience in Escravos is that the employed mechanics and electricians have performed extremely well, that however the provision with equipment and in particular the provision and stock keeping of required spare parts is not satisfyingly to a high degree. Regular equipment breakdowns led to disruptions of the works. Particularly affected were crawler cranes, mobile cranes and excavators, which were the main key equipment in Escravos. One of the most common reasons leading to equipment failure was found to be the advanced age and thus the question must be raised whether it is of advantage for the corporation to equip projects that are logistically difficult to reach with such equipment whilst keeping newer and more reliable equipment on projects in close vicinity of major workshops and suppliers.


Close Out StatementThe success of the Escravos Gas to Liquids Project has been built on trust. Bilfinger Berger Nigeria GmbH and Julius Berger Nigeria PLC corporate management equipped the Executive Project Management in Escravos from the very beginning with full authorization to run such a difficult project.

This is evidenced by the support in selecting and employing suitable staff members, i.e. in the QA/QC Management, the HSE Management and the Management of the Electrical and Mechanical Engineering and Construction. Without the possibility to fill such positions with experienced, reliable and well-known personnel, the implementation of the required strict control systems would have become rather difficult and time consuming.

The Escravos Project Management also had the corporate management’s full support when it decided to change the rotation schedules. When it became evident, that the working hours of 77 hours per week within the Escravos environment were unbearable the required changes were implemented within a few months only. The costs to provide a reasonable social environment are negligible if compared to the boost in moral, followed by an increase in performance and wellbeing.

The tough, sometimes aggressive contractual approach that was chosen by the Project Management in Escravos towards the Contractor proved to be appropriate. The huge amount of commercial and technical changes to the subcontract could not have been implemented if the execution team would not have forced the Contractor to deal with the countless issues in time. Again here, and particularly during the initial phases of the subcontract Julius Berger Nigeria PLCs corporate management has provided its fullest support.

Upon completion of Julius Berger Nigeria PLCs own accommodation facilities in Escravos, security issues were not addressed properly. The EGTL Contractor was obliged to provide required security but refused to do so and the EGTL Project Management decided to pursue the issue contractually. Simultaneously it should have employed its own Security Officer which would have avoided several physical conflicts with the workforce and the communities.

Despite the commercial achievements of the project, there is the general desire amongst all staff members, either western expats, Nigerian nationals or 3 rd country nationals to continue working with the Escravos team on a similar project in the near future – which might be the biggest success of all.

AttachmentDevelopment of Subcontract Value and Schedule

2003 2004 2005 2006 2007 20122008

~ 9 Months Delay

2009 20112010

February 2012

1st TENDER for JK

Tender Value

MoU Exclusiveness

Rebid

Contract Value

Access to Site

Works commence

Contract Schedule 26 Months (100%)

128million 100%)

Changes in the Works

Schedule BAS6 38 Months (146%)

164 million (128%)

261 million (204%)

316 million (247%)

358 million (280%)

381 million (298%)

Schedule BB01 57 Months (220%)




Letter of Award

time-related (27%)

add. scope & extra works (67%)

esclation (5%)