Cost engineers and other project team professionals representing 13 exploration and production (E&P) companies met for two days in June at the Hess Tower, in Houston, to improve competitiveness in the cost engineering space.
Attending the 2015 Upstream Cost Engineering Committee (UCEC) conference June 24-25, committee member companies received updated metrics compiled and assessed by IPA that can be used by projects groups to support conceptual estimate development and reviews, assess company metrics against industry norms, and support the calibration of internal company tools and databases.
“UCEC provides a historical look at industry project cost and schedules,” said IPA Research Analyst and UCEC Coordinator Jonathan Walker. The metrics, based on a core dataset of more than 300 completed upstream projects stored in IPA’s projects databases, are useful for project estimate comparisons during the appraisal, select, and define phases of asset development. The metrics this year reflect the database as of December 2014, which includes more than 40 newly completed projects, plus projects authorized in 2014. This year, UCEC members received additional onshore metrics and fabrication cost and duration metrics, Walker said.
Two new research studies were presented at this year’s conference. One study examines significant project cost differences for projects of the same scope but located in different world regions. The study quantifies current location differences in E&P facility development and identifies and analyzes the sources of the variances. The second study, “Fast and Furious Project Schedules,” takes a close look at the characteristics of “fast projects,” ones that had aggressive schedule targets and were completed with less than 20 percent schedule slip and less than 10 percent cost growth.
In addition, UCEC company representatives attended a session focusing on various issues relating to the effects of the lower oil prices that have rattled the Industry. Breakout sessions for participants wanting to learn more about how to work with the UCEC metrics and tools developed by IPA were available at the conference, as were several networking opportunities.
This article first appeared in the August 2015 edition of IPA’s EPC Market Forecast Newsletter.