E&P Owner Companies Gather to Examine Drivers of Capital Project Competitiveness

The Upstream Industry Benchmarking Consortium (UIBC) will gather for its annual meeting November 13-15, 2017, at the Lansdowne Resort in Leesburg, Virginia. A chartered, voluntary association of owner firms in the petroleum, exploration, and production industry, the UIBC supports the continuous improvement of E&P asset development systems.

IPA aids the UIBC in its pursuit of asset development and execution improvements by measuring and comparing performance outcomes, conducting research into asset development practices, and identifying practices that drive the delivery of successful projects. In addition to working toward the UIBC’s stated goal of improving the effectiveness and health of owner project system competencies, UIBC members are committed to developing a unified theory of the asset development process by being thought leaders for the oil and gas industry.

Four new IPA-led research studies will be presented at UIBC 2017. A summary for each of the four studies follows.

Lean Scoping, Phase 2

Building on research presented a year ago at UIBC 2016 that focused on costs associated with delivering topsides, this study looks at whether E&P companies have made progress at achieving lean scopes for more asset types in a portfolio. The study also examines how companies can maximize asset value while keeping costs low and what design metrics might improve lean scoping decision making.

Site-Based Portfolio Effectiveness Metrics

Site and sustaining capital projects are taking up an increasing portion of overall capital spend. This study provides owners insights into the effectiveness of projects at initiation, the extent to which portfolio leaders can control projects during execution, and the effectiveness of continuous improvement efforts at the portfolio level.

E&P Pre-Authorization Investments

The oil price downturn has caused E&P companies to rethink which opportunities they should develop and what information they need to make investment decisions. Some are now reaching all the way back to field discovery and concept selection phases to identify factors that can predict the overall value of an opportunity.

This study aims to answer UIBC member companies’ questions about whether reservoir size and quality are correlated with appraisal spending and what needs to be done to kill uneconomic opportunities before FEL 2.

Long-Term Reservoir Performance

This study leverages IPA and publicly available reservoir performance data to answer questions including: 

• How are reservoirs performing across the first 25 percent to 50 percent of the field life?
• What is the relationship between reservoir understanding and this long-term performance?
• When do companies end up spending more capital to prop up reservoir performance?