Standardization May Hold Key to Future of Major Offshore Projects

Topics: Facilities planning and maintenance Project management
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Reducing the complexity and controlling the cost of major offshore projects are together one of the biggest challenges facing the oil and gas industry. The collapse of oil prices has only accentuated the issue, which was already evident when prices were still at USD 100/bbl. To combat the problem, operators are looking at ways to standardize and simplify projects globally as a means of expediting design, construction, installation, and startup; reducing costs throughout the process; and creating safer, more predictable, reliable facility operations.

The scale and complexity of many deepwater projects have driven costs out of control, despite the cyclical pullback of the past 2 years that has reduced the number of active projects and caused equipment and service providers to cut prices.

The global project standardization initiative facilitated by the International Association of Oil & Gas Producers (IOGP) is focusing on equipment and bulk materials (component) standardization in Joint Industry Project 33 (JIP33). In addition to low-voltage switchgear, JIP33 is working on standardization of ball valves, subsea wellheads, and piping and valve material through developing standardized procurement specifications for all of these components. IOGP sees future standardization efforts progressing to areas of increasing complexity in offshore projects.
Image courtesy of the World Economic Forum.

 

An analysis of 400 major projects executed in the last 5 to 10 years, cited by Jim Nyquist of Emerson Process Management in a presentation at the IHS CERAWeek conference in Houston, showed a 65% failure rate based on cost overruns of at least 25% or schedule overruns of at least 50%.

 

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Standardization May Hold Key to Future of Major Offshore Projects

Joel Parshall, JPT Features Editor

24 October 2016

Volume: 68 | Issue: 11