OGA: UKCS Projects Delivered Late, Over Budget

OGA: UKCS Projects Delivered Late, Over Budget
On average, fewer than 25% of oil and gas projects on the UK continental shelf were delivered on time since 2011, according to a comprehensive 5 year review from the OGA.

On average, fewer than 25 percent of oil and gas projects on the UK continental shelf were delivered on time since 2011, according to a comprehensive five year review from the OGA.

In addition, projects delivered were on average around 35 percent over budget relative to estimates made in Field Development Plans (FDPs) consented by the Department of Energy and Climate Change and, latterly, the OGA.

Following the review, a series of ‘lessons learned’ events was undertaken with 11 operators, and three major tier 1 contractors, to develop a deeper understanding of good practice and areas for improvement.

“One of the key findings was that there was no correlation found between the size and complexity of projects and delay, with the key factors being non-technical in nature,” Gunther Newcombe, the OGA operations director, said.

“There are also encouraging signs that the ability to deliver projects in line with cost and schedule commitments has been improving recently. This is aligned to the effort we have seen industry making in the areas of production efficiency and operating costs over the last 18 months,” he added.

Following the publication of the review, industry body Oil & Gas UK highlighted that the sector was eager to improve.

“This report indicates that the industry is keen to learn from detailed reviews of past performance and is continuing to improve in its quest to deliver on time and on budget. This is reinforced through recent industry initiatives, including those led by the Efficiency Task Force and the OGA’s ‘Lessons Learned’ events,” Mike Tholen, Oil & Gas UK’s upstream policy director, said.

“To assist further improvement in project delivery, the industry will be developing guidelines in collaboration with the ECITB to ensure that good practice to deliver greater performance is shared across the industry,” he added.

The OGA reviewed 58 major projects, which were executed between 2011 and 2016, in order to generate its latest study.

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