Underwater Trainwrecks!

David Bamford writes:
Some of you may have already browsed the OGA's five year review of (UKCS) major oil and gas projects.

It is a sobering read, chronicling the various mishaps that beset 58 major projects executed between 2011 and 2016. On average:

  • fewer than 25% of projects were delivered on time (average of 10 months delay)
  • projects were 35% over budget compared to estimates made in Field Development Plans.
The OGA do not chronicle the extent to which production promises were met, or not.

“Non-technical” issues were deemed a key contributory factor.

In shape, these conclusions are similar to those of IPA in reviewing ~250 global FPSO projects.

QED: In the UKCS, and globally, major development performance is pretty miserable, with misses on 1st Oil/Gas timing and/or budget and/or production delivery, sometimes all three.

“Underwater” in two senses of the word!!

The IPA study pointed to under-appraisal, that is, lack of understanding of the reservoir, its geometry and dynamic characteristics, as a key driver of poor project performance – in essence many folk designed the wrong production facilities.

Given that the future of the UKCS relies in good part on the successful development of marginal discoveries – see OGA's recent review – we probably need more integrated thinking, more joined up thinking, than simply focussing on reservoir appraisal……joining up thinking on existing infrastructure, decommissioning, reservoir appraisal and monitoring, subsea facilities, project management (as a development progresses through some well-known ‘gates').

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