A shock profit warning issued by one of the oil majors at the beginning of this year brought into sharp focus just how changeable the commercial landscape for oil and gas production has become. With costs soaring for many of the new mega-projects tapping petroleum deposits, industry commentators warn that even though oil prices are high, profits are still at risk.
Notwithstanding the fact that resource estimates are highly variable in the early stages of exploration and pilot development, the fact that the ‘easy oil’ is gone and oil majors are having to go farther and deeper to find new reserves has meant oil and gas companies are also having to dig deeper into their pockets to cover capital costs. Moreover, the commercial environment is influenced by multiple factors that can drive rapid change. These include extreme weather, civil issues, varying demand, and market sentiment.
Those responsible for managing the early stage planning process must take into account a multitude of risks and build-in time and cost contingencies accordingly. However, a greater understanding of each risk is necessary than in the past because the environment can alter rapidly. What might have seemed fairly inconspicuous during the early stage of a development can suddenly become a potential point of failure during project delivery and execution.
So what can early phase project managers do to counter these risks?
Upstream Advisors lists the key factors that operators must critically consider and adhere to for every project. We offer insights from the first hand experiences of our staff who have worked on projects large and small across the globe. Click here to read the full article.
In other news, what’s been keeping us busy over the last period?
Alina Grewal joined Upstream Advisors in June. Alina is a recent Chemical Engineering graduate who has also worked for an FPSO consulting specialist. We look forward to Alina’s contributions to the Upstream Advisors team.
Recent and ongoing assignments; this quarter we have been working on projects for Tullow, White Rose, Norsk Shell and Premier Oil
Our work has included:
• Providing field development planning assistance
• Project Management support in the concept selection process
• Ongoing support on review of project governance processes
• Project engineering support to the client’s internal development team
What’s coming up in the next period?
How the UK can maximise recovery in its ageing North Sea basin has been in the spotlight and debated heavily in recent months following the publication of the Wood Review and the upcoming referendum on Scottish independence.
The need for better collaboration and sharing of knowledge and data has been at the forefront of these debates. While this argument has not been contended by any of the parties in the discussion, some key landscape changes will need to take place for it to occur.
Upstream Advisors will look at the key recommendations of the Wood Report and discusses how some of the proposed regulatory changes will need to be supported and facilitated in order to improve the prospects of the UK continental shelf.