Estimating cost and time - PetroWiki

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Estimating capital, one of the main ingredients for any cash flow calculation, is largely in the domain of the engineering community. Petroleum engineers are responsible for drilling costs and are often involved with other engineers in estimating costs for pipelines, facilities, and other elements of the infrastructure for the development of an oil/gas field. All practicing engineers have heard horror stories of cost and schedule overruns, and some have even been involved directly with projects that had large overruns. Why did these overruns occur, and what could have been done to encompass the actual cost in the project estimate? The upstream oil/gas industry is a risky business.