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.
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%.
Standardization May Hold Key to Future of Major Offshore Projects
Joel Parshall, JPT Features Editor
24 October 2016