Better project delivery: Australia's value opportunity

2019 ◽  
Vol 59 (2) ◽  
pp. 709
Author(s):  
Angus Rodger
Keyword(s):  
Large Scale ◽  
Oil And Gas ◽  
Investment Decision ◽  
Oil And Gas Industry ◽  
Safety Net ◽  
Project Delivery ◽  
Capital Projects ◽  
Cost Overruns ◽  
Gas Industry ◽  
Track Record

Has the industry seen the light on project delivery? Numerous signs of improved execution through the downturn in Australia and across the globe suggest oil and gas companies are finally getting it right after a lengthy period of dismal performance. Even before prices went to US$100 per barrel and beyond, the oil and gas industry had a poor track record of delivering major projects. However, higher prices exacerbated the situation, encouraging poor capital discipline and overconfidence in undertaking large-scale, highly complex projects that overstretched the supply chain. The results were delays, cost overruns and billions of dollars in value destroyed. Over the past decade the average project was delivered 6 months late, with costs up 14% compared with the forecast at final investment decision. The top 15 cost blowouts were a cumulative US$80 billion over budget. Much of that was in Australia. But lessons have been learned. Without the safety net of higher prices, the successful execution of capital projects has become of crucial importance to the industry. There is now evidence of post-downturn projects being delivered on time and on budget; in Australasia, recent examples include Greater Western Flank Phase 2 and the Bayu-Undan infill drilling campaign. But do these successes mean execution has really improved? It can be argued these are relatively simple brownfield, subsea developments. When we enter the next investment cycle with bigger projects (Scarborough, Browse and Barossa), will we see the same old mistakes repeated again?

Agile framework for capital projects

2021 ◽  
Vol 61 (2) ◽  
pp. 422
Author(s):  
Polly Mahapatra ◽  
Paris Shahriari
Keyword(s):  
Oil And Gas ◽  
Hybrid Approach ◽  
Oil And Gas Industry ◽  
Quick Response ◽  
Capital Projects ◽  
Gas Industry ◽  
Response To Change ◽  
The Cost ◽  
Early Phases ◽  
The Ideal

Under the increased pressure of rapidly changing market conditions and disrupting technologies, continuous improvements in efficiency become indispensable for all oil and gas operators. Traditional project management principles in the oil and gas industry employ rigid methods of planning and execution that can sometimes hinder adaptability and a quick response to change. Considering the potential that Agile principles can offer as a solution, the challenge, therefore, is to identify the ideal, hybrid, approach that leverages Agile while incorporating the traditional linear workflow necessitated by the oil and gas industry. This paper seeks to assess pre-existing literature in the application of the Agile principles in the oil and gas industry with a focus on Major Capital Projects (MCPs), backed by the successes experienced as a result of specific pilot projects completed at Chevron’s Australian Business Unit. In particular, this paper will focus on how agility has resulted in improvements to the cost, schedule, teaming and cohesion of MCPs in the early phases as well as key learnings form the pilot agility projects.

Nanoemulsions: A Versatile Technology for Oil and Gas Applications

2021 ◽  
Author(s):  
Nouf AlJabri ◽  
Nan Shi
Keyword(s):  
Droplet Size ◽  
Large Scale ◽  
Oil And Gas ◽  
Volume Fraction ◽  
Oil Industry ◽  
Oil And Gas Industry ◽  
High Energy ◽  
Small Droplet ◽  
Gas Industry ◽  
Wide Range

Abstract Nanoemulsions (NEs) are kinetically stable emulsions with droplet size on the order of 100 nm. Many unique properties of NEs, such as stability and rheology, have attracted considerable attention in the oil industry. Here, we review applications and studies of NEs for major upstream operations, highlighting useful properties of NEs, synthesis to render these properties, and techniques to characterize them. We identify specific challenges associated with large-scale applications of NEs and directions for future studies. We first summarize useful and unique properties of NEs, mostly arising from the small droplet size. Then, we compare different methods to prepare NEs based on the magnitude of input energy, i.e., low-energy and high-energy methods. In addition, we review techniques to characterize properties of NEs, such as droplet size, volume fraction of the dispersed phase, and viscosity. Furthermore, we discuss specific applications of NEs in four areas of upstream operations, i.e., enhanced oil recovery, drilling/completion, flow assurance, and stimulation. Finally, we identify challenges to economically tailor NEs with desired properties for large-scale upstream applications and propose possible solutions to some of these challenges. NEs are kinetically stable due to their small droplet size (submicron to 100 nm). Within this size range, the rate of major destabilizing mechanisms, such as coalescence, flocculation, and Ostwald ripening, is considerably slowed down. In addition, small droplet size yields large surface-to-volume ratio, optical transparency, high diffusivity, and controllable rheology. Similar to applications in other fields (food industry, pharmaceuticals, cosmetics, etc.), the oil and gas industry can also benefit from these useful properties of NEs. Proposed functions of NEs include delivering chemicals, conditioning wellbore/reservoir conditions, and improve chemical compatibility. Therefore, we envision NEs as a versatile technology that can be applied in a variety of upstream operations. Upstream operations often target a wide range of physical and chemical conditions and are operated at different time scales. More importantly, these operations typically consume a large amount of materials. These facts not only suggest efforts to rationally engineer properties of NEs in upstream applications, but also manifest the importance to economically optimize such efforts for large-scale operations. We summarize studies and applications of NEs in upstream operations in the oil and gas industry. We review useful properties of NEs that benefit upstream applications as well as techniques to synthesize and characterize NEs. More importantly, we identify challenges and opportunities in engineering NEs for large-scale operations in different upstream applications. This work not only focuses on scientific aspects of synthesizing NEs with desired properties but also emphasizes engineering and economic consideration that is important in the oil industry.

Implementations

2019 ◽  
pp. 180-190
Keyword(s):  
Large Scale ◽  
Process Management ◽  
Oil And Gas ◽  
Oil And Gas Industry ◽  
Organizational Structures ◽  
Gas Industry ◽  
Analysis Process ◽  
Petroleum Companies ◽  
Market Factors ◽  
Potential Methods

The distinctive feature of petroleum businesses is its wide scope. After crude oil or gas extraction, resulting semi-products undergo dozens of transformation stages in supply chains to reach the final customer. Combination of quantity and quality multiplied by external market factors produce price fluctuations that are challenging for world economics. In this regard process management might be carried out to improve supply chain performance and assure the maximum business predictability. However, for such large-scale organizations it requires big effort in operational analysis, process enhancement and process control via information systems which successfully support traditional management in function-oriented organizational structures. This chapter explores the developed engineering matrix that embraces potential methods and tools applicable for oil and gas industry. Additionally, it reveals industrial peculiarities and delivers case studies about Iranian and Hungarian petroleum companies.

Ready to collaborate? Operator and supply chain under the spotlight

2017 ◽  
Vol 57 (2) ◽  
pp. 498
Author(s):  
Mike Lynn ◽  
Alan Samuel
Keyword(s):  
Oil And Gas ◽  
Oil And Gas Industry ◽  
Commodity Price ◽  
Capital Projects ◽  
Gas Industry ◽  
New Ways Of Working ◽  
Service Companies ◽  
The North ◽  
The North Sea ◽  
The Uk

In the last 12 months or so, particularly with the drop in oil price, there’s been a lot of speculation about the future of the Australian oil and gas industry. Strenuous efforts are being made to bring down costs, reduce complexity and expedite the completion of major capital projects. Yet with the commodity price looking likely to be subdued for some time, serious questions persist. How can we sustain activity in Australia, secure the investment needed to continue exploration and appraisal drilling, for the next wave of projects? In looking for answers to these challenges, collaboration is a theme that comes up time and time again. But what does it actually mean? What does it look like in practice? Who does it well and how? And which companies are reaping the rewards of great collaboration? To fill this knowledge gap we are launching a survey which will look at many aspects of collaboration in the Australia and compare this with the results of similar surveys conducted in the UK. We will be looking to survey both operators and service companies working in the Australia and find out: What does collaboration mean? What constitutes effective collaboration? How do companies view themselves and each other as collaborators? How does collaboration in Australia compare with companies in the North Sea? We hope a better understanding of collaboration could help companies in Australia continue to improve productivity and efficiency, adopt new ways of working, and truly make the most of Australia’s abundant resources.

Organizational climate in large-scale projects in the oil and gas industry: A competing values perspective

2014 ◽  
Vol 32 (4) ◽  
pp. 687-697 ◽  
Author(s):  
Martine B. Hannevik ◽  
Jon Anders Lone ◽  
Roald Bjørklund ◽  
Cato Alexander Bjørkli ◽  
Thomas Hoff
Keyword(s):  
Organizational Climate ◽  
Large Scale ◽  
Oil And Gas ◽  
Oil And Gas Industry ◽  
Competing Values ◽  
Gas Industry

scholarly journals Evaluating the Intra-Industry Comparability of Sustainability Reports: The Case of the Oil and Gas Industry

2019 ◽  
Vol 11 (4) ◽  
pp. 1093 ◽  
Author(s):  
Andrea Cardoni ◽  
Evgeniia Kiseleva ◽  
Simone Terzani
Keyword(s):  
Financial Markets ◽  
Oil And Gas ◽  
Investment Decision ◽  
Methodological Approach ◽  
Oil And Gas Industry ◽  
Global Reporting Initiative ◽  
Gas Industry ◽  
Investment Decision Making ◽  
Sustainability Reports ◽  
Oil And Gas Sector

Environmental, social, and governance (ESG) data are in high demand in financial markets. However, the ESG data provided by companies do not allow for use in the investment decision-making process. The main limiting point for this is a lack of comparability across companies. This paper analyzes the problem of comparability with the aim to evaluate the intra-industry comparability of sustainability reports, framing the analysis on Global Reporting Initiative (GRI) Standards and discussing the results with the support of legitimacy and stakeholder theories. Drawing upon stakeholder and legitimacy theories, as well as financial and sustainability accounting concepts, we propose a theoretical framework of comparability and a methodology to evaluate the level of comparability on a sector-specific basis. The methodological approach adopted in this study is broadly qualitative, with the use of a multiple-stages model. Based on the example of one industry, we discovered that, despite comparability being mostly relevant to the listed companies from the oil and gas sector, the sustainability reports of these companies are still not comparable. Our findings reveal that, despite the availability of a large amount of ESG data and the existence of sustainability frameworks, the problem of comparability is still relevant even for companies that are theoretically most inclined to be comparable.

Dealing with oil and gas unions

2011 ◽  
Vol 51 (2) ◽  
pp. 736
Author(s):  
Allan Drake-Brockman ◽  
Daniel White
Keyword(s):  
Large Scale ◽  
Oil And Gas ◽  
Industrial Relations ◽  
Oil And Gas Industry ◽  
Industrial Activity ◽  
Gas Industry ◽  
Ripple Effects ◽  
Case Examples ◽  
Industrial Action ◽  
Poor Outcomes

Since the commencement of the Fair Work Act 2009 (Cth) (FW Act) on 1 July 2009, there has been a significant increase in union activity in Australia’s oil and gas industry. Recent case examples concerning the Pluto Project and various other disputes flag the importance of project managing industrial relations to ensure project delivery dates are met. Due to the contract interdependencies on large scale oil and gas projects, industrial action taken by a union in relation to a single sub-contractor can have ripple effects—causing budget blow-outs. Emerging union influence is such a concern that some of Australia’s leading companies operating in the oil and gas industry now identify industrial activity as a key project risk. Furthermore, many Australian leading financial institutions now assess a company’s potential exposure to industrial action as part of their key lending criteria. New innovative industrial relations strategies are now part of the weaponry Australian unions use when representing their members—this includes global union strategies. Moreover, there is already evidence that the FW Act can promote the occurrence of demarcation disputes between unions. This type of industrial activity leads to poor outcomes for employers and can prove to be very costly—especially in a multi-million dollar a day industry. Providing insight into the recent union activities in the industry are the following cases: Heath v Gravity Crane Services Pty Ltd Boskalis Australia Pty Ltd v Maritime Union of Australia CFMEU v Woodside Burrup Pty Ltd Offshore Marine Services Pty Ltd v Maritime Union of Australia There are a number of strategies oil and gas companies and sub-contractors can use to mitigate the effects of union influence in the workplace.

EPCM contracting: clearing the minefield

2014 ◽  
Vol 54 (1) ◽  
pp. 231
Author(s):  
Julie Whitehead ◽  
Karen Walters
Keyword(s):  
Construction Management ◽  
Oil And Gas ◽  
Standard Form ◽  
Oil And Gas Industry ◽  
Project Delivery ◽  
Risk Allocation ◽  
Infrastructure Projects ◽  
Gas Industry ◽  
Optimum Performance ◽  
The Past

The past year has seen a downturn in the number of new mining and infrastructure projects in Australia. Despite that, the authors are noticing a continuation of the trend towards a greater use of engineering, procurement and construction management (EPCM) style contracting. The increased use of EPCM contracts is in part due to projects becoming larger and more complex. As these projects can only be delivered by multiple contractors who all seek to limit their liability, the EPCM contract offers a useful framework for coordinating and managing those contractors, and maximising the owner’s recourse to them. This is particularly so in the oil and gas industry, with many projects using this form of project delivery. As there is no standard-form EPCM contract, however, and given the complex technical nature of these types of projects, negotiating an EPCM contract can be fraught with danger, especially for owners who may not have used this style of contract before. This paper discusses the unique characteristics of the EPCM contract (particularly in contrast to the engineering, procurement and construction style contract), the typical risk allocation, and the creative use of compensation and incentive regimes to drive optimum performance. The EPCM model is not suited to all projects, but if it is appropriately negotiated and drafted, and is well managed by an appropriately skilled and resourced owner’s team, it can provide a platform for excellence in project delivery.

Tax issues impacting acquisitions in the Australian oil and gas industry

2011 ◽  
Vol 51 (2) ◽  
pp. 669
Author(s):  
Chad Dixon
Keyword(s):  
Income Tax ◽  
Oil And Gas ◽  
Investment Decision ◽  
Oil And Gas Industry ◽  
Capital Gains ◽  
Capital Gains Tax ◽  
Gas Industry ◽  
Resource Rent ◽  
Goods And Services ◽  
Petroleum Resource

Understanding the tax implications and structuring options of a transaction is critical when assessing and comparing new opportunities. When undertaking any transaction involving Australian oil and gas assets, the applicable taxation regime should be carefully explored and understood. From an Australian perspective, taxes such as corporate income tax, petroleum resource rent tax, capital gains tax, and goods and services tax have significant potential to influence the investment decision. This presentation will focus on the tax implications applicable to the acquisition and disposal of Australian oil and gas assets, providing valuable insights for both Australian companies and inbound investors.

Confronting the Productivity Challenge in the High Cost Economy

2014 ◽  
pp. 153-171 ◽  
Author(s):  
Jerad A. Ford ◽  
John Steen ◽  
Martie-Louise Verreynne ◽  
Bradley Farrell ◽  
Gerald Marion ◽  
...  
Keyword(s):  
Oil And Gas ◽  
Oil And Gas Industry ◽  
Business Decisions ◽  
Cost Overruns ◽  
Gas Industry ◽  
Competitive Capabilities ◽  
Productivity Decline ◽  
Research Findings ◽  
World Class ◽  
Survey Methodologies

This chapter reports research findings into the productivity challenge facing the Australian oil and gas industry. This industry has been experiencing cost overruns indicating a productivity decline that puts future projects and investment at risk. Using world-class survey methodologies developed by the Centre for Business Research at Cambridge University and adapted for the oil and gas industry, an evidence-based view on business decisions and conditions is provided and linked to performance. While many of the productivity challenges facing the Australian oil and gas industry are beyond immediate managerial control, this research shows that key productivity drivers are in the realm of the firm to influence. The research reported in this chapter shows that improvements in innovation, collaboration, and deeper competitive capabilities are the best levers to lift business productivity and to build a growth pathway for the future for this industry.

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