Research suggests that on time and on budget completion of complex projects is the exception rather than the norm. In 2014, EY analysed 365 complex projects and found that 64% face cost project overruns and 73% report delays. Completion costs were, on average, 59% higher than initial cost estimates – an increase in total of US$500bn. Clearly, nobody sets out to fail but it appears that they are far from isolated examples when they do. So, what’s going wrong?
Early in 2015, the unthinkable happened, with prices falling below the US$50 mark, lower than they had been at any time since April 2009. But this seems like a very long time ago now, as fears relating to sanctions being lifted on Iran and Iranian production adding to an already stark supply surplus drove the market below US$30 per barrel in mid-January 2016. That’s around a 70% drop in prices since the same time last year.
what is the problem with the way many would approach the issue of managing contact risk in capex projects? Well, think of it in terms of fly swatting. Picture the scene, a fly buzzing around your food is disturbing you. You chase it around the room with various “tools,” and when they don’t work you try to guide it to follow you through an exit point—usually an open window.
Prospective megaprojects in design – a combined group of over $400bn by most estimates – have now been postponed, re-phased, re-cycled or cancelled. Fueled by high oil prices for over a decade, long-cycle industry project portfolios now need to be completely re-modelled to adapt to a structurally lower-price future.
By their nature, mega projects are funded by well-resourced organisations. Typically, funding security has allowed some elasticity for overruns and the associated cost, which recent experience has illustrated can be 15 per cent of project cost.
In this Fuelfighter infographic learn more about projected global growth in energy demand and how energy production can match demand. It also takes a look at the outcomes predicted by some of the leading environmental agencies including, what’s being invested, who’s trying to stop global warming, how energy production could match demand and the projected worldwide growth in energy demand.
The Institute has been sending persons and machines to the deepest depths of the ocean for many years. With shrinking resources and increasing demand for petroleum products, oil and gas industries are compelled to rethink over their present percent for automation of the enterprise.
From recruitment to advertising to announcing new initiatives and even damage control, social media is a tool that the oil and gas industry needs to use. In this Oil & Gas IQ guide learn about the pivotal role social media can play plus tips to build your social media strategy and getting the best results.
The Obama Administration will be a submitting a new $10/bbl Oil Tax Plan in 2016. How will this impact the oil & gas industry and what the 10 BIGGEST pro-oil influencers have to say about it. Listen to the full podcast with oil and gas expert Jared Head in the player below.