Oil-Sands Capital Projects
As easy oil gets more scarce and the scale of development projects increases, effectively managing capital investments becomes increasingly critical to achieving target returns. Oil-sands projects offer some interesting lessons that apply broadly to capital investments throughout the oil and gas industry. Constructing the next wave of oil-sands capacity will be a tall order. New technology, increasing project complexity, and the shortage of skilled resources all present challenges and increase the risks of completing these large capital projects on budget and on time.
In this environment, the case for improved project execution is compelling. Companies that excel in project construction can enjoy total breakeven crude cost advantages as high as 10% to 15% relative to competitors (an advantage of close to $10 per barrel in the current environment).
Consistent, leading practices in project execution have a dramatic impact on the breakeven oil price for oil-sands investment.
While the economics are highly sensitive to oil prices, royalty regimes, input factors and operating costs, the ability to execute large projects efficiently remains the most critical factor in determining the overall economic viability of future investment.
Our recent cross-industry study of capital project excellence and leading practices suggests that key drivers of capital-program performance fall broadly into four categories:
- program-governance and strategic-allocation process,
- scope definition,
- cost estimation,
- and project execution.
Find out more by reading the full article
 Oil-Sands Lessons April 2010 — Oil and Gas Investor
Improving the design and execution of large oil-sands capital projects could significantly reduce life-cycle costs, and research provides seven keys for managers of smaller projects.
By Neal Walters, Vance Scott, and Hakan Civi
[READ ARTICLE]
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 Neal Walters, Partner based in the Toronto office
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 Vance Scott, Partner based in the Chicago office and Americas Lead for the firm's oil & gas practice
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