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In spite of massive investments in project management best practices and the organizations to implement them, major oil and gas projects continue to experience cost overruns and schedule delays. A root cause that has not been sufficiently explored is the built-in bias toward overconfidence. Bridging the gap between facilities and reservoir engineers is critical in designing systems that are flexible enough to allow a spectrum of reservoir feed conditions to be accommodated over the life cycle of the field. While subsurface uncertainties can't be eliminated, they can be managed.
Independent Project Analysis researchers took a closer look at site project system staffing approaches including full alliance, owner engineering, contractor engineering, and core staffing to determine the effect of staffing characteristics on capital project outcomes. The average project loses 22% expected net present value at authorization, and only 60% of projects meet all their business objectives once they are completed. Executives can do a lot to increase capital project effectiveness by being committed to the stage-gate process.
A few weeks ago, I noticed that someone had viewed my LinkedIn profile. We all have had this happen, and often it will be recruiters or business development professionals looking for contacts, or people who wish to remain anonymous for some reason. The oil and gas industry's performance in executing megaprojects is dismal in terms of cost overruns and schedule slippage. Improving the success rates of major projects by ensuring the technical competence of engineers was the subject of a networking event at the Offshore Technology Conference in Houston in May.
Project management is one way to keep an eye on the big picture. Focusing on the little things too can increase your bottom line. The complexity of modern facilities construction projects necessitates a cradle-to-grave approach to managing projects over long periods of time. Facilities engineering has grown with the industry’s advance into deep water and the development of complex subsea systems to produce the resources found there. The ultimate success of a deepwater project depends on phases from early concept selection, design, construction, commissioning, and startup to operation.
This paper is investigates installed cost overruns of pipeline-compressor-station projects, using data from more than 200 projects. Results of the analysis show that project size, capacity, location, and year have different impacts on individual component overruns. Cost estimation for facilities depends on early concept selection and critical inputs, often complicated by uncertainty in one or more of the critical inputs. Empirical cost models and cost modeling methods using these inputs vary in degrees of scope, comprehensiveness, and robustness.
The amount of oil and gas resources approved for development last year surpassed 20 billion BOE, the highest level seen since 2011. Telltale signs have emerged that we are entering a new offshore investment cycle. The project aims to contribute an estimated ultimate recovery of more than 175 MMboe from one of the company’s signature deepwater projects in the US Gulf of Mexico. Following a 42-day journey from Singapore, the Liza Destiny has arrived at the Stabroek Block offshore Guyana, where it is expected to produce up to 120,000 gross boe/D from the ExxonMobil-operated deepwater project upon startup. Phase 1 production from the deepwater US Gulf of Mexico field is expected to reach 30,000 BOPD.
Rystad Energy's analysis shows the decline is in contrast to $170 billion worth of tenders awarded in 2019. Tender activity is expected to show marginal recovery in 2021, reaching about $74 billion. The amount of oil and gas resources approved for development last year surpassed 20 billion BOE, the highest level seen since 2011. Telltale signs have emerged that we are entering a new offshore investment cycle. A fresh wave of offshore project sanctions across Southeast Asia could boost greenfield investments in the oilfield service space by almost 70% in 2020.