UIBC EMEA 2024 Addresses Carbon Reduction, Contracting, and More
The inaugural Upstream Industry Benchmarking Consortium (UIBC) EMEA Roadshow took place on 9 January 2024 in Stavanger, Norway. Organized by Independent Project Analysis (IPA) and held at Equinor’s Business Center, the meeting provided a unique opportunity for nearly 200 energy project professionals—from both UIBC member companies and non-member companies—to explore the latest E&P market trends, discover practical research findings, and network with peers. Continue reading below for summaries of the plenary sessions led by IPA leaders and subject matter experts.
Keynote Speech
IPA President & CEO Ed Merrow’s keynote presentation addressed trends and challenges in upstream megaprojects, the worrisome trend trajectory of recent key leading indicators, and the implications of today’s market on future megaproject delivery.
Market Trends in Capital Projects
Synthesizing various sources of IPA data and market survey data, IPA Director of Research Luke Wallace shared learnings on the state of the capital projects market, including in engineering, procurement, and construction. The session also reviewed industry perceptions on supply chain and escalation trends.
The Efficacy of Unusual Contracting Choices
Contracting is subject to very strong opinions that are often based on project outcomes attributed incorrectly to the contracting approach. In this session, Ed Merrow shared research on the effectiveness of contracting forms—such as functional specification and design competitions—from a statistical perspective, and the various trade-offs associated with each contracting approach.
A Hunt for Early Indicators
The Carbon Optimization Readiness Assessment (CORA) measures the completeness of the processes and practices—as identified through research—used to balance carbon targets against cost KPIs. In this session, IPA Manager of Carbon Management & Sustainability Adi Akheramka discussed how CORA and its component practices influence the setting of competitive carbon and cost targets in projects.
Long-Term Production Performance
Although industry routinely underproduces in the early phases of production relative to investment promises at sanction, the perception is that projects recover from early shortfalls as production performance improves over time. In this session, IPA E&P Manager Matthew Ingham presented quantitative analysis of subsurface production performance that proves this perception wrong and highlights the implications for our project delivery framework.
Evaluating the Maturity of E&P Cost Estimates
In-house cost estimating competency in the E&P industry has been declining for years. In this session, Luke Wallace shared research on the state of cost estimating in the industry, the leading indicators of estimate maturity, and areas for cost estimating improvement. Additionally, the study introduced an estimate maturity index to help project teams in evaluating estimates and identifying risks.
Latest Megaproject Findings
Ed Merrow presented findings from the 2nd edition of his Industrial Megaprojects: Concepts, Strategies, and Practices for Success book, due to be published in early 2024. This included a review of megaproject performance, key mistakes that cause megaproject failure, key practices needed for megaproject success, and what owners should do in today’s market to avoid megaproject failures like we have seen in times past.
What is the UIBC?
The UIBC is a voluntary association of owner oil and gas exploration and production (E&P) firms that exchange data, information, and metrics, and support research, to improve the effectiveness of their capital project systems. Member representatives attend annual meetings to understand how well their capital efficiency improvement efforts compare to their peers. The members-only UIBC 2024 annual meeting will take place November 18 to 20 in McLean, VA.
Contact IPA to request information on how to join the UIBC.