The EPC industry is feeling the effects of the COVID-19 virus in many ways including how to remotely manage and monitor ongoing projects, supply chains disruption, materials management and markets seeing significant drops. These issues as well as many others are likely to cause significant delays in project timelines, escalations in project cost and some projects being put on hold.
Already volatile, the Oil & Gas industry is one of the industries that is feeling the effects of COVID-19. Oil & Gas Journal reported spending in 2020 by North American E&P companies could fall by 36% compared to 2019 levels, which means a $24.4 billion cut in 2020. Crude and gas inventories are getting close to capacity and US demand for gas could fall by more than 50%.
World demand for fuel is down 40% YoY, Russia and Saudi Arabia continue to over produce. Some production methods are no longer profitable with oil in the $20/BBL range.
These issues have a direct impact on EPC projects as companies reevaluate the need to continue with projects, put them on hold or cancel them all together. A major area many EPC companies are facing is adapting to remote working. To reduce the potential exposure to the COVID-19 virus, many employees like project managers, project controls, estimators, materials purchasing, engineers, designers, etc., are working from home as much as possible.
Hexagon PPM has the technologies that allow EPC projects to be managed and worked remotely by many roles. Those EPC companies that have already implemented these technologies are able to continue their projects safely and finding themselves ahead of the competition.
Christian Lubrano, Director of Engineering and Design Technology at Kiewit, a Hexagon PPM (Intergraph) client, recently shared:
“Kiewit has a large North American engineering operation with over 2000 employees and contractors spread across multiple large campuses and cities. For years, Kiewit has been working on deploying a cloud-based “virtual campus” that enables engineering resources to work remotely, and as productively and collaboratively as they would in a Kiewit office. Historically, Kiewit’s virtual campus has hosted less than 5% of our engineering resources; however, over the last 60 days, this has grown to over 95%.
“This transition from physical campuses to a virtual campus occurred with minimal business disruption. Kiewit’s solution, which includes an important mix of Hexagon’s SmartPlant application and tools from other vendors, has helped the company leverage and scale out cloud-based resources and virtualization technologies to keep resources at a consistent operating level in both 2D and 3D applications. Feedback from employees is that, in most cases, cloud-based virtualized applications work as well or better as they do in the office.
“Employees, even those who had never worked virtually before, have been able to work productively from the virtual campus since day one. Kiewit will continue to use its virtual campus as part of its long-term project execution strategy. As we add more employees, partners and clients to our virtual campus and promote it as a cloud-based collaboration tool, we believe it will continue to be a differentiator in the industry.”
Safety of construction workers is also being impacted by the COVID 19 virus. Having information at their fingertips means less office time, where there is a higher probability of transmission. Situational awareness is a key factor on EPC projects as there can be many dangers to workers. It takes a safety mindset by everyone to keep a job site safe, and the COVID-19 virus adds a new level of safety awareness not seen before on construction projects. Social distancing can be hard to accomplish on a construction site but must fully be practiced to keep employees safe.
Knowing where your employees are at all times can be difficult, but Hexagon PPM has solutions. Luciad and Xalt Mobile brings the connected worker technology together to manage and monitor your projects and keep your employees safe. These technologies show workforce location based on mobile devices so you can monitor, flag and report on proximity of employees based on plant zones or minimum required distance between locations.
It can also send mobility notifications to individuals not adhering to new policies (number of people in a given area, distance among the people, heatmap of people locations over time (hotspots visually indicated). These are just a sample of the capabilities and value of Hexagon’s technologies keeping your workers safe.
This is also a great time to look at training for employees as projects and work slows down. Hexagon is providing virtual training and workshops to help customers get their employees fully trained. Technologies are constantly evolving and keeping your workforce trained has been shown to boost production as well as morale. In this time of uncertainty, keeping your workforce engaged and providing training is a great way to let them know they are important to the company and are valued.
Hexagon PPM stands with its customers, both existing and new, to lead in the adaptation of working remotely and keeping employees safe. Contact Hexagon PPM to find out more on the value of a digital twin and the technologies available to keep your projects running efficient and safe. Together we will come out of this with many lessons learned and new ways of working.
Let us help you create strategies for remote EPC project execution! Register for our May 21 webinar with Christan Lubrano , director of Engineering and Design Technology for Kiewit.
* Oil & Gas Journal, (2020, April 8). IHS: North American E&P companies cut spending 36% in 2020.
* Oil & Gas Journal, (2020, Mar 26). IHS Markit: US gasoline demand could fall by half on COVID-19.
Tom is a Hexagon PPM Senior Industry Consultant responsible for consulting with EPCs and owner operators on major capital projects. Prior to joining Hexagon, Tom has over three decades in engineering, construction, information management and project management across nuclear, chemical and upstream oil & gas industries.