NPD: Cost control and planned execution on NCS projects improved in 2007-2018

A majority of the 66 Norwegian continental shelf (NCS) projects in 2007-2018 reviewed by the Norwegian Petroleum Directorate kept costs within the estimates given in their plans for development and operation (PDO).

 “The big picture shows that the projects have progressed positively in terms of both cost control and planned execution,” says Niels Erik Hald, assistant director development and operations at the NPD, noting an emphasized importance of the companies pursuing detailed early-phase work.

The finding was part of a report on project execution presented by the NPD on Feb. 7, which compares costs, start-up time, and reserve developments with estimates made in the PDOs. Just over 80% of projects ended up with costs within or below the uncertainty range (plus/minus 20%) in the estimates.

Ninety percent of the subsea developments reviewed were completed in accordance with or below the PDO forecast, the report showed.

While a number of platform developments experienced cost overruns, the review reported that over 70% of the developments end up in line with estimated costs.

During the 2007-2018 timeframe, market developments since the oil price slump also contributed to improved project executions because the availability of resources and capacity at suppliers was better than in earlier years, the report said.

On average, the time to complete projects has taken 3.5 months longer than planned. The average delay is greater for platform developments than for those based on subsea installations.