Specialized Engineering

Engineering is all about solving problems and using scientific knowledge and mathematics to design, build and test structures, machines, and processes widely used in the petroleum industry to produce, transport and process hydrocarbons. Engineering in the oil & gas industry involves a large variety of knowledge and generally divided into disciplines. This section is particular about engineering for Projects, Facilities, and Construction (upstream engineering). This field is extremely diverse and covers a significant amount of engineering disciplines.

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Category Description

Engineering is all about solving problems and using scientific knowledge and mathematics to design, build and test structures, machines, and processes widely used in the petroleum industry to produce, transport and process hydrocarbons. Engineering in the oil & gas industry involves a large variety of knowledge and generally divided into disciplines. This section is particular about engineering for Projects, Facilities, and Construction (upstream engineering).  This field is extremely diverse and covers a significant amount of engineering disciplines.

Here how the Oil and Gas Engineering Guide 2nd edition, structures it.

  • Project Engineering
  • Design Basis
  • Process
  • Equipment/Mechanical
  • Plant Layout
  • Safety & Environment
  • Civil Engineering
  • Materials & Corrosion
  • Piping
  • Plant Model
  • Instrumentation and Control
  • Electrical
  • Off-Shore
  • BASIC, FEED and Detail Design
  • Field Engineering
  • Revamping

In addition to it, there may be some variations and enhancement of the list and include the following engineering disciplines:

  • Structural
  • Pipeline Integrity
  • Asset Integrity
  • Marine and Subsea  
  • Enhanced Oil Recovery (EOR)
  • Process Optimization
  • Facilities Engineering

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Supply & Demand Dynamics

Demand

On a global basis, engineering services in the Oil & Gas industry are on the top 3 list of demand sectors, which makes it a very large “consumer” of engineering expertise and man-hours. The demand for engineering services in the upstream petroleum industry is directly affected by:

  • New projects, both offshore and onshore
  • Brownfield and tie-in projects
  • Maintenance and operations ( to a lesser extent)

The total global market size of engineering services is around $1 trillion and expected to reach around $1.4trillion by 2020 (Shiva Engineering).

Supply

Over the years, the market for engineering services went through various cycles of consolidation and growth. Yet, the number of engineering houses is extremely diverse and spread geographically and per expertise and discipline. The segmentation patterns are generally around size, expertise, and geography, and could be divided as follows:

  • Large, global, integrated and multi-discipline engineering companies
  • Niche companies who specialize in a particular geographic market and may have multi-discipline capabilities
  • Small engineering companies who specialize in a particular set of disciplines, e.g. marine & subsea
  • Very niche companies that are known for unique expertise, e.g. pipeline routing or vibration management and alike.

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Total Cost of Ownership

Areas to look at for total cost of ownership: 

  • Cost of rework – make sure all work is done correctly from the 1st pass, otherwise, an engineering company is incentivized to make errors, so they can charge for re-work man-hours for correcting the errors
  • A good engineering house can make a significant difference to your project by coming up with a good solution. So paying slightly more for an outcome that could be game-changing is worth to consider and evaluate
  • The caliber of engineers offered during tender submission may not be available when the actual job is executed. This means whatever assumptions have been made in anticipation of the level of engineering expertise may not work anymore, which in turn may have affected the initial assumption and cost normalization during the commercial evaluation
  • Key areas to evaluate and look at, during the selection process for upstream engineering services:
    • Professional credentials and certification
    • Experience in similar projects
    • Knowledge of local specifics where a project is performed
    • Previous records and performance levels
    • Professional integrity to ensure quality work is produced at all times  
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