Document Title : Work Breakdown Structure Procedure

MEPN Doc. No. : ID-G-BU-YYO-PRO-GN-00-00012

Originator : MEPN
Group Owner : Projects & OEE
Area : Block B
Location : General
System : General
Document Type : Procedure
Discipline / Sub discipline : Project / Project General
Old Document No. : ID-G-BU-00000-00000-01127

ID-G-BU-YY0-PRO-G
N-00-0012.pdf

Aldi Pudjiastuti Not Agus

4 IFU 3 Nov 17 Re-Issued For Use Poki Satari
Wirawan Lesmana Req’d Aminoto

Project Project Sr Mgr

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Printed initials in the approval boxes confirm that the document has been signed.
The originals are held within Document Management
Work Breakdown Structure Procedure ID-G-BU-YY0-PO-GN-00-0012
Medco E&P Natuna Ltd. Page 2 of 8

Revision Sheet
Medco E&P Natuna

REVISION DATE DESCRIPTION OF CHANGE

0A 09 Jul 2008 Issued for Comment

0B 09 Jan 2009 Issued for Approval

0C 23 Jan 2009 Re-issued for Approval

1 11 Feb 2009 Issued for Use

2 23 Jun 2011 Updated and Re-Issued for Use

0A 9 Dec 2014 Updated and Re-Issued for Comment

0B 9 Dec 2014 Updated and Re-Issued for Approval

3 12 Jan 2015 Updated and Re-Issued for Use

4 3 Nov 2018 Re-Issued for Use

Work Breakdown Structure Procedure ID-G-BU-YY0-PO-GN-00-0012
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TABLE OF CONTENTS

CONTENTS ........................................................................................................................................................3
1. PURPOSE ...................................................................................................................................................4
2. SCOPE ........................................................................................................................................................4
3. RESPONSIBILITY .......................................................................................................................................4
4. DEFINITIONS AND ABBREVIATIONS .......................................................................................................5
5. PROCEDURE REQUIREMENT ..................................................................................................................5
5.1. Establish Work Breakdown Structure .................................................................................................5
5.2. Work Breakdown Structure Development First Component (for company use) .................................5
5.3. Work Breakdown Structure Development Second Component (for Contractors) ..............................6
5.4. Minimum WBS Requirements for Planning Purposes ........................................................................7
5.5. WBS Code ..........................................................................................................................................7
5.6. WBS Creation and Modifications ........................................................................................................8
6. ALTERATIONS ............................................................................................................................................8
7. APPENDICES ..............................................................................................................................................8
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1. PURPOSE
The purpose of this procedure is to ensure a consistent application and update of all Medco E&P
Natuna (MEPN) project’s WBS’s as the project progresses.

2. SCOPE
This procedure applies to all major Capital Projects and selected Small Projects managed under the
Capital Project Organization with the EPC cost beyond $500,000 gross within MEPN. The Work
Breakdown Structure (WBS) organizes and defines the total project work scope into a hierarchy of
smaller and more manageable objects, down to the actual work task level, that can be easily
scheduled, cost estimated, monitored, and controlled.
The WBS allows a hierarchical summation of costs, schedule and progress to allow Project
Management practices to be applied consistently across the project. The WBS also allows work to
be controlled at execution level while also providing consistent cost and schedule “roll up” to the
sub projects and overall project. This “roll up” lets management understand the overall status and
provides information that supports decisions made to ensure that overall project objectives are
achieved.

3. RESPONSIBILITY
The Project Manager (PM) is responsible to:
 Ensure implementation of this procedure at the project and sub-project levels.
 Approve the WBS of the project.
 Monitor contractor compliance with MEPN WBS Requirement.

The PMT Project Controls Manager/Coordinator is responsible to:

 Implement this procedure for all sub-projects and components across the project.
 Ensure the accuracy, completeness, and consistency of the implementation of the WBS
in the Project.
 Develop and update the WBS of the project.
 Ensure that the work is planned and executed in line with the approved WBS.
 Ensure the contractors compliance with MEPN WBS when executing their part of the work.

The Project Control Team Members responsibilities are:

 The Cost Controller is responsible to:
‐ Ensure that the project WBS is approved by following MEPN requirement and that the
WBS is created in the required system
‐ Plan and control the project costs at the appropriate level of WBS
‐ Ensure the booking of actual project costs on the appropriate WBS

 The Cost Estimator is responsible to ensure that the project cost estimate breakdown is
maximally in alignment with the Project WBS
 The Planning Engineer is responsible for the project plan, project schedule, and
progress measurement to have maximum alignment with the Project WBS
 The Project Engineer is responsible to prepare the contract detailed scope of work and to
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make sure that it can be aligned with the WBS breakdown, so that contractors can submit
bid, manage scope, control cost and schedule by using the right WBS structure.

4. DEFINITIONS AND ABBREVIATIONS

Company: Medco E&P Natuna Ltd. (MEPN).
Company’s PMT: Medco E&P Natuna Ltd. Project Management Team, who is doing the project.
Contractor: being the third party FEED & EPC Company that is chosen as the best company to do
the project execution.
Work Breakdown Structure (WBS): is a key project deliverable that organizes the team's work into
manageable sections and defines as a hierarchical decomposition of the total scope of work to be
carried out by the project team to accomplish the project objectives and create the required
deliverables.

5. PROCEDURE REQUIREMENT
5.1. Establish Work Breakdown Structure
The overall WBS is split into two major components:
 The first component (see section 5.2) is to be used by the MEPN PMT and is used to
roll up the work to the overall project, phase level and sub project level.
 The second component (see section 5.3) is to be used by the contractor(s) and breaks
down the contractors’ scope of work. The Contract level (lowest level for the MEPN PMT
and highest level for contractor(s)) is the level where the two intersects. This is the level
where MEPN PMT will import the contractor’s work into MEPN PMT cost and schedule
structures.
The Project Service/Control group is responsible to ensure that the overall Project WBS is
established for the Project which should be defined with a single project definition.

5.2. Work Breakdown Structure Development First Component (for company use)
The WBS up to level 5 (Sub Activity) is required, with the Level 3 (Components) being optional and
the level 5 project self-defined.
 Level 0 (Project Definition) – This is the highest level of the structure and will be the
level at which all cost and schedule summarizes for the Project reporting.
 Level 1 (Phase) – This represents the Project phases:
FEL 0 = DN – Explore (If applicable)
FEL 1 = AP – Appraise
FEL 2 = SL – Select
FEL 3 = DF – Define
Execution = EX – Execute
 Level 2 (Sub- Project) – a further breakdown of the project into more specific work
elements, such as facilities, pipelines for onshore project and Platforms, Floaters, and
Pipelines for offshore project . But it should not include vendor contracts. Owners Costs,
Contingency and Escalation WBS elements can be at level 2 or level 4 based on project
needs. If Contingency and Escalation are set at level 2, there will be no further breakdown
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for these elements at subsequent level. By considering the BU specific circumstance, small
projects may consider to have Standard Activity Breakdown (SAB) on the level 2 WBS set
up.
These are identified as follows:
Owner Cost = PM
Contingency = CY
Escalation = ES
 Level 3 (Components) – a further breakdown of Level 2 (Sub Project) into more specific
components. Examples for this level are: process units and work areas for onshore project
and Piles, Jacket and Topside for offshore project. If the Project Team does not require
components to be tracked, this level can be skipped and the Standard Activity Breakdown
(SAB) level would be a level 3.
 Level 4 (Standard Activity Breakdown)
Engineering = EN
Procurement = PR
Fabrication = FB
Construction = CN
Transportation & Installation = TR (Offshore)
Hook up & Commissioning = HC (Offshore)
 Level 5 (Sub Activity) – This is BU and project specific WBS level, mainly is used for
manpower, procurement and construction further breakdown.

A detailed major capital project WBS template and Small project recommended WBS template
has been attached in the Appendixes A and B.

5.3. Work Breakdown Structure Development Second Component (for Contractors)

The structure of the WBS shall be conveyed to the contractor in the invitation to bid, and shall
become part of the contract as indicated in the Project Controls Contract Exhibit document. The
contractor is expected to create WBS and code all cost elements and schedule activities with the
approved Work Breakdown Structure at the required level.
The contractor must be able to consistently implement the approved WBS to the contract defined
lowest level including mapping the contract working package back to the requested Contractor WBS
to facilitate the final close out settlement. The WBS progress must be accurately monitored,
measured and reported in all formal report issued to Medco E&P Natuna.

The Work Breakdown Structure Developed Consists of 5 Levels as follows:

 Level 0 – This is the highest level of the structure at which the contractor will roll up to.
It will match either Level 2 (Sub Project Level) or Level 3 (Component Level) used by
Medco E&P Natuna PMT depending on how the project is broken down.
 Level 1 – Engineering, Procurement, Fabrication, Construction, Transportation,
Installation, and Hook up and Commissioning
 Level 2– A further breakdown of level 1 into engineering services and construction direct
and indirect field. Procurement is also broken down into major equipment and bulk
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material.
 Level 3 (Discipline / Craft) – A further breakdown of Level 2, specific disciplines and
crafts for Engineering and Construction. Equipment is broken down into the types of
equipment and bulk materials are broken down into the different types of materials.
 Level 4 (Deliverables) – Engineering deliverables, construction packages and a further
breakdown of procurement. It is recommended to develop the detail Excel spreadsheets
(e.g. Master Deliverable Register, cutting sheets, etc.) for simplifying the contractor WBS,
maintaining the planning sense and back up checking the activities progress. It is under
Medco E&P Natuna discretion to decide if the project needs to monitor the contractor
substructures after Level 4
The structure above can be used for either projects with a single contract or multiple contracts.

5.4. Minimum WBS Requirements for Planning Purposes

The WBS shall be developed for all phases of the project. For the project current phase, the
Work Breakdown Structure shall be detailed up to the appropriate level. For the project future
phases, the Work Breakdown Structure has minimum requirements for each project phase for the
planning purposes, as described in Appendixes C and D. Ideally, The level of WBS for planning and
cost should be aligned to the Standard Activity Breakdown level.

5.5. WBS Code

Each WBS level is coded with the WBS SAP Mask. The Medco E&P Natuna WBS SAP mask
allows 24 digits including the dots “.”, and the mandated level of t h e Standard Activity Breakdown
shall be part of the WBS SAP mask. The sample formatting is shown in the table below.

Project WBS Mask

MEPN WBS Level WBS Mask
Level 0 WIP.XXX.NNNN*
(Project Definition)

Level 1 WIF.XXX.NNNN.YY /
(Project Phase) WIC.XXX.NNNN.YY

Level 2 WIF.XXX.NNNN.YY.ZZ /
(Sub-Project) WIC.XXX.NNNN.YY.ZZ

Level 3 WIF.XXX.NNNN.YY.ZZ.PP /
(Component) WIC.XXX.NNNN.YY.ZZ.PP

Level 4 WIF.XXX.NNNN.YY.ZZ.PP.QQ /
(Standard Activity Breakdown) WIC.XXX.NNNN.YY.ZZ.PP.QQ

Level 5 WIF.XXX.NNNN.YY.ZZ.PP.QA /
(Sub-Activity) WIC.XXX.NNNN.YY.ZZ.PP.QA

Character 1 to 3 (WIP/F/C) represents the name of the single project. All projects are started with
“WIP” on the Level 0, which clearly differentiates the project breakdown structure from other
breakdown structure, such as drilling or operation. “WIP” is not allowed to use except for highest
level WBS for project. “WIP” will be replaced by either “WIF” or “WIC” when evolving into the next
level of WBS. The project should use “WIF” character for FEL-0, FEL-1, and FEL-2 phase when all
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the cost is expense. The mask will be changed to “WIC” for FEL3 and “execution” phase, when all
the cost will be capitalized.
Character 5 to 7 (XXX) are used to identify the year in which the project starts.
Character 9 to 12 (NNNN) are used to identify the project name; the project name acronym is used
here.
Character 14 and 15 (YY) on lev el 1 are used to identify the project phase, and it can also be
used to differentiate whether a project cost is treated as expense or as capital (DN, AP and SL are
treated as expense; DF and EX are treated as capital):
Character 17 and 18 (ZZ) on level 2 are used to identify the project’s Sub-Project or Process
Unit/Area (PU).
Character 20 and 21 (PP) on level 3 are used to identify the project’s Components.
Character 23 and 24 (QQ) on level 4 are used to identify the project’s Standard Activity Breakdown.
Character 23 and 24 (QA) on level 5 are used to identify the project’s Sub-Activity. These last two
characters on level 5 will be a combination of number and alphabet, whereas the “Q” will be replaced
by a number, and the “A” will be a sequential of alphabet (starting from A, B, C, and so on,
sequentially for each different sub-activity).
A graphical display of these WBS mask structure, both for onshore and offshore, are attached
in appendix E of this procedure.

5.6. WBS Creation and Modifications

As the project progresses and the execution methods for the later phases are better defined there
may be a need to create new WBS for the next phase or modify the approved WBS. Minor WBS
modification would only require approval from the Project Control Manager / Coordinator. To
Open a WBS for a new project phase or any WBS modifications caused by contract strategy
changes, execution plan modifications, and scope adjustments require Project Management
approval. The WBS creation process has been attached in Appendix F of this procedure.

6. ALTERATIONS
Alterations or the intent to this procedure will required written approval of the Medco E&P Natuna
Project Manager and Medco E&P Natuna Project Services Manager.

7. APPENDICES
Appendix A – Major capital project WBS template
Appendix B – Small project recommended WBS template
Appendix C – Minimum major capital project WBS Requirements for Planning Purposes
Appendix D – Minimum small project WBS Requirements for Planning Purposes
Appendix E – WBS Mask for Onshore and Offshore Project
Appendix F – Medco E&P Natuna WBS Creation process

ID-G-BU-YY0-PRO-G
N-00-0012 WBS Proc