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The slump in oil prices has seen a tailing-off in the number of megaprojects - major infrastructure projects that cost more than $1 billion – on the drawing board throughout the energy industry. The scale and complexity of these megaprojects will always translate into budget overruns and missed deadlines, but the oil and gas industry has a...Full Article »
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,...Full Article »
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-...Full Article »
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...Full Article »
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....Full Article »
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....Full Article »