By
Evans Akwasi Gyasi
12/04/2013
Outline
 Overview of Subject Area
 Current Issues and Problems
 Research Focus
 Methods
 Experiences
 Conclusion
Overview
 Average daily global oil production as at 2012 was
approximately 88m/bbl (OGJ 2013, and EIA 2013).
 Oil demand is ever increasing with a staggering figure
of 92m/bbl (IEA 2013)
 Environmental impacts of oil and gas operations are
improving
 High Technological requirement
 Increased Investment
Current Problems
 Threat of production deficit to meet growth in oil
demand (OGJ 2013 and IEA 2013)
 Uncertainty, high risk and complexity
 Peak oil Threat
 Tight Regulations
 Cost overrun
( Research Focus)
Research Focus
What?
 8 out of every 10 upstream oil and gas project overrun its
cost (CAPEX)
 Cost overrun(CAPEX) recorded an average of 40% overrun,
the highest ever in the oil upstream sector
 Across the oil producing regions, recorded overruns are as
high as 50% to 100% (Canada, Brazil, Nigeria etc.)
 Future projects are halted because of overruns
(eg.Petrobras in Brazil)
Why bother?
 Effects on oil production
 Effects on oil prices and demand
 Effects on global economic growth
 Impact on shareholders and operators profit
 Impact on host country royalties tax
So what?
AIM
 To develop a validated model that achieves accurate project
timing and cost predictions
Research Questions
 Identify and discuss the causes of CAPEX overrun in the
upstream oil and gas sector
 How effective are the CAPEX control models in the
upstream oil and gas sector?
 How accurate time and cost can be achieved in upstream
project now and in the future?
Methods
 Mixed method approach (Quantitative and
qualitative)
 Statistical Modelling
Study area: Canada
 CAPEX overrun has been notoriously present in the
upstream operations close to 10 years
 Predictions of heavy oil sand as a “saviour” for the future
 Canada owns more than 30% proven reserves (IEA 2013)
Progress
 Abstract accepted for oral presentation for ICCE,
Ottawa Canada
 Working on first publication due on 30th June.
 Research consultant for ACostE (UK) on cost
management
Project Plan
 Completion of data collection by the end of 2013
 First modelling
 Validation of model (2014)
 Write up and data (2014)
Experiences in Warwick
 Teaching Assistant
 PGA course (Fellow membership requirement for UK
lecturers)
 Warwick Ambassador