‘Majority’ Of UK Oil & Gas Projects Delivered Late & Over Budget

‘Majority’ Of UK Oil & Gas Projects Delivered Late & Over Budget
6th March 2017 Pentag Gears

A new report from the Oil and Gas Authority (OGA) into industry projects between 2011 and 2016 has found that the majority of these projects over this five-year period were delivered over budget and past the agreed deadline. In all, less than a quarter of new projects on the UK Continental Shelf (UKCS) were found to have been delivered on time since 2011.


The Lessons Learned from UKCS Oil and Gas Projects review involved analysis of 58 major projects carried out in the last five years, all of which were aimed at recovering hydrocarbons instead of decommissioning. The report noted that it’s vital that new fields are successfully developed in order to ensure the maximum economic recovery of both oil and gas from the UKCS.


Of the 58 projects reviewed, 38 had started production while 20 are still being worked on, which may suggest at first glance that there are numerous projects under execution at the moment – which suggests a robust workload for the supply chain in the future. However, the report noted: “The reality is somewhat different. By Q1 2017, half of these current projects are forecast to have started production and there will be less than ten major projects under execution in the UKCS.”


Following the review, a series of lessons learned events were undertaken in a bid to develop a better understanding of both areas for improvement and good practice. Operations director with the OGA Gunther Newcombe explained that more than £40 billion has been invested in new projects in the last five years, which brings with it great financial benefits for the economy, while safeguarding the energy supply in the UK and supporting skilled jobs around the country.


The lessons learned that were focused on in the report focus on how major projects are both planned and executed, as opposed to technical scope. “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. There are also encouraging signs that the ability to deliver projects in line with the cost and schedule commitments has been improving recently,” he went on to say.


In October last year, the OGA revealed that over three billion barrels of oil equivalent (boe) remains in around 350 unsanctioned discoveries across the UKCS. The majority of these are small pools (less than 50 million boe technically recoverable), located within the potential extended or tieback reach drilling distance to current infrastructure already in place. However, some of these discoveries are further away from this infrastructure and as such could have need of stand-alone solutions to recover hydrocarbons.


The year before, small pool-themed ‘hackathons’ were carried out, with over 100 ideas, efficiency measures and technologies generated that could help with unlocking these small pool discoveries. These technologies included mechanical hot taps, spooled pipeline products, subsea storage, mechanically connected pipelines, floating facilities and unmanned production buoys, which could all potentially reduce subsea tieback costs.


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