AVOIDING CAPITAL COST BLOWOUTS ON OIL AND GAS PROJECTS

2003 ◽  
Vol 43 (1) ◽  
pp. 665
Author(s):  
R.A. Hogarth
Keyword(s):  
Oil And Gas ◽  
Capital Expenditure ◽  
Mining Industry ◽  
Oil And Gas Industry ◽  
Capital Investments ◽  
Due Diligence ◽  
Capital Projects ◽  
Gas Industry ◽  
Return On Capital ◽  
High Level

Modern corporate practices have been slow to come to grips with the risks of large capital expenditure projects, particularly the processes of due diligence on investment submissions and high level monitoring of project implementation.Unlike the mining sector where major project cost blowouts have received intense public scrutiny, collection of data on this issue is difficult in the oil and gas sector and there remains a reluctance of companies to share horror stories. The increasing trend towards company acquisitions rather than exploration, the rates of return on capital investments reported by oil and gas companies and the data available on this issue within the mining industry point towards a potential problem for the oil and gas industry and one that, with appropriate corporate practice could be more readily identified.This paper puts forward the case for more effective corporate practices in relation to large capital projects in optimising return on capital and discusses the role of project owner senior management and the key factors impacting on capital expenditure blowouts.Effective project due diligence, monitoring of project implementation and integration management are put forward as the three key focuses for Boards and management in ensuring that cost blowouts are avoided.

scholarly journals TAX BURDEN ON COMPANIES IN THE OIL AND GAS INDUSTRY OF THE RUSSIAN FEDERATION: DAMPING MECHANISM VS TAX MANEUVER

2019 ◽  
pp. 116-123
Author(s):  
M. A. Valishvili
Keyword(s):  
Oil And Gas ◽  
General Scheme ◽  
Oil And Gas Industry ◽  
The State ◽  
Tax Burden ◽  
Total Production ◽  
Capital Investments ◽  
State Budget ◽  
Gas Industry ◽  
High Level

The volatility of hydrocarbon prices on world markets, as well as the high level of dependence of the state budget on oil and gas revenues, are the main conditions for assessing the effectiveness of tax regulation in the oil and gas sector. It should be considered, that, according to the General Scheme for the development of the oil industry of Russia up to 2035, a significant (up to 35%) reduction in oil production at the developed fields, which currently account for more than 70% of the total production, is predicted. Thus, it is necessary to find the optimal balance of the interests of the state, expressed in increasing the tax burden as a source of state revenues and business interests in capital investments in the development of deposits in the initial stages of development.

Agile framework for capital projects

2021 ◽  
Vol 61 (2) ◽  
pp. 422
Author(s):  
Polly Mahapatra ◽  
Paris Shahriari
Keyword(s):  
Oil And Gas ◽  
Hybrid Approach ◽  
Oil And Gas Industry ◽  
Quick Response ◽  
Capital Projects ◽  
Gas Industry ◽  
Response To Change ◽  
The Cost ◽  
Early Phases ◽  
The Ideal

Under the increased pressure of rapidly changing market conditions and disrupting technologies, continuous improvements in efficiency become indispensable for all oil and gas operators. Traditional project management principles in the oil and gas industry employ rigid methods of planning and execution that can sometimes hinder adaptability and a quick response to change. Considering the potential that Agile principles can offer as a solution, the challenge, therefore, is to identify the ideal, hybrid, approach that leverages Agile while incorporating the traditional linear workflow necessitated by the oil and gas industry. This paper seeks to assess pre-existing literature in the application of the Agile principles in the oil and gas industry with a focus on Major Capital Projects (MCPs), backed by the successes experienced as a result of specific pilot projects completed at Chevron’s Australian Business Unit. In particular, this paper will focus on how agility has resulted in improvements to the cost, schedule, teaming and cohesion of MCPs in the early phases as well as key learnings form the pilot agility projects.

Asset of the Future - Comprehensive Business Transformation Program

2021 ◽  
Author(s):  
Alexander Sitnikov ◽  
Sergei Doktor ◽  
Andrei Margarit
Keyword(s):  
Oil And Gas ◽  
Energy Transition ◽  
Oil And Gas Industry ◽  
Gas Industry ◽  
Average Return ◽  
Debt Capital ◽  
Timely Response ◽  
The Future ◽  
Return On Capital ◽  
Traditional Approaches

Abstract In the recent years the oil and gas industry has started facing an unprecedented number of challenges. The average return on capital in the industry has deteriorated which results in investor mistrust and costs being higher than ever. Debt capital became two times costlier than for alterative types of energy. More conventional oilfields become depleted and new reserves are usually quite complex to develop. These and other challenges such as intense competition between oil and gas companies, the energy transition agenda as well as the volatility of oil prices in the aftermath of the pandemic are pushing the O&G companies to transform themselves. Gazprom Neft introduced the "Asset of the Future" program in late 2018 as a timely response which was aimed at completely transforming the Upstream business model. The main issue with the transformation was the scale of it, which included 10 subsidiaries (or subs) and more than 200 different processes. In this case traditional approaches such as improving each operation one by one would not suffice as the company sought a rapid and highly efficient implementation of changes. As such the program had to develop a new approach that focused on the integration of all business parts and continuous improvement. Integration of people, technology and processes will lead to better collaboration and as a result - to smarter decisions and better execution.

scholarly journals Biofuels as an instrument of Russia hydrocarbons and agrarian exports competitiveness

2020 ◽  
Vol 175 ◽  
pp. 13029
Author(s):  
Denis Ushakov ◽  
Oleg Patlasov
Keyword(s):  
Oil And Gas ◽  
Raw Materials ◽  
Oil And Gas Industry ◽  
Business Value ◽  
Creative Economy ◽  
Gas Industry ◽  
Hydrocarbon Production ◽  
Advantages And Disadvantages ◽  
High Level ◽  
Science Intensity

Paper analyzes the prospects of biofuels second and third generation in the structure of the global energy balance, demonstrates a sharp decline in oil and gas revenues in the Russian budget, describes advantages and disadvantages of biodiesel and bioethanol production. The connection between the growth of Russia’s export potential in terms of hydrocarbon products processing with EU standards implementation has been proved. The problems of the realization of programs on the oxygenate technologies development in the Union State of Russia-Belarus were revealed. The capacity of the market of 3-4 generations fuel with using non-food raw materials and various types of biomass was estimated. Was proved that at a high level of growth in business value and profitability of production there are incentives to organize deep processing in Russia’s hydrocarbon production. It is proved that the oil and gas industry in a creative economy should increase its science intensity and depth of raw materials processing, including ones in related industries.

Ready to collaborate? Operator and supply chain under the spotlight

2017 ◽  
Vol 57 (2) ◽  
pp. 498
Author(s):  
Mike Lynn ◽  
Alan Samuel
Keyword(s):  
Oil And Gas ◽  
Oil And Gas Industry ◽  
Commodity Price ◽  
Capital Projects ◽  
Gas Industry ◽  
New Ways Of Working ◽  
Service Companies ◽  
The North ◽  
The North Sea ◽  
The Uk

In the last 12 months or so, particularly with the drop in oil price, there’s been a lot of speculation about the future of the Australian oil and gas industry. Strenuous efforts are being made to bring down costs, reduce complexity and expedite the completion of major capital projects. Yet with the commodity price looking likely to be subdued for some time, serious questions persist. How can we sustain activity in Australia, secure the investment needed to continue exploration and appraisal drilling, for the next wave of projects? In looking for answers to these challenges, collaboration is a theme that comes up time and time again. But what does it actually mean? What does it look like in practice? Who does it well and how? And which companies are reaping the rewards of great collaboration? To fill this knowledge gap we are launching a survey which will look at many aspects of collaboration in the Australia and compare this with the results of similar surveys conducted in the UK. We will be looking to survey both operators and service companies working in the Australia and find out: What does collaboration mean? What constitutes effective collaboration? How do companies view themselves and each other as collaborators? How does collaboration in Australia compare with companies in the North Sea? We hope a better understanding of collaboration could help companies in Australia continue to improve productivity and efficiency, adopt new ways of working, and truly make the most of Australia’s abundant resources.

OVERSEAS RECRUITING IN THE OIL AND GAS INDUSTRY — A CASE STUDY

1985 ◽  
Vol 25 (1) ◽  
pp. 134
Author(s):  
R. Bogan
Keyword(s):  
United Kingdom ◽  
Oil And Gas ◽  
Oil And Gas Industry ◽  
The United States ◽  
Structured Interview ◽  
Sufficient Information ◽  
Company Performance ◽  
Gas Industry ◽  
The United Kingdom ◽  
High Level

Early in 1982 CSR Limited established an Oil and Gas Division. By 1983 this Division had recruited twenty-six overseas technical personnel mainly from Canada and the United Kingdom. The Company needed to recruit overseas because the skills required were not available in Australia.During 1983 a review of the recruitment and settlement of these personnel and their families was undertaken. The objectives of this review were to:improve the Company performance in the recruitment, induction and settlement of overseas recruits and their families;increase the likely "length of stay" in Australia of overseas recruits and their families;to address specific problems faced by recruits and their families in settlement in Australia.In depth interviews were conducted with twenty-one of the twenty-six recruits and their families using a structured interview format.The analysis of the interviews results revealed that:on average it took longer for those recruited in the United Kingdom to obtain immigration "approvals" and to physically relocate than those recruited in Canada;families with previous experience in relocating adapted and coped better with the physical move and resettlement than families without previous experience.The detailed results showed further that:While there was sufficient information provided about the job and department, there was dissatisfaction with the lack of detailed information about aspects of living in Australia, particularly: taxation; housing; bank mortgage arrangements; cost of living data and medical insurance.There were gaps in the expectations that many- recruits and their families had about living in Australia, such as climate, lifestyle and housing. This was attributed to an "oversell" through glossy brochures and "word pictures".The attention given to staff and their families on arrival was seen as a positive introduction to Australia and CSR's Oil and Gas Division.The provision of initial temporary accommodation in a single apartment complex for all overseas recruits and families in Adelaide assisted greatly in the induction and settlement process. It provided a high level of support especially for wives with young children. The "welcome waggon" group together with the assistance provided by the wives of senior executives were also positive influences in the settlement process.The most positive features seen in the move to Australia were career and lifestyle opportunities. On the other hand loss of disposable income was seen as a significant negative.From the results and analysis a detailed set of recommendations and actions were developed to improve company performance in recruitment and settlement. These recommendations were implementated prior to the 1984 recruiting mission to Canada, the United States and the United Kingdom.The preliminary results from the 1984 recruiting mission have resulted in:a reduction in recruiting lead time;quicker and more informed decision making by candidates and their families in accepting job offers;more professional preparation of both the recruiting teams and the company's agents overseas.

OVERVIEW AND REVIEW OF THE COMMONWEALTH ENVIRONMENT PROTECTION AND BIODIVERSITY CONSERVATION ACT 1999

2002 ◽  
Vol 42 (1) ◽  
pp. 669 ◽  
Author(s):  
K. Heiden
Keyword(s):  
Biodiversity Conservation ◽  
Oil And Gas ◽  
Significant Proportion ◽  
Petroleum Industry ◽  
Oil And Gas Industry ◽  
Environment Protection ◽  
Gas Industry ◽  
Strategic Assessment ◽  
Referral Form ◽  
High Level

This paper provides a brief overview of the Environment Protection and Biodiversity Conservation Act 1999 (the Act) and discusses the operational performance of the Act in the first 18 months.The introduction of the Act on 16 July 2000 has created a new environmental assessment and approval regime at the Commonwealth level. Proposals are no longer referred for assessment on the basis of government decisions, but on the basis of the potential for a proposal to impact upon a matter of National Environmental Significance (NES). An analysis of projects that have been referred, assessed and approved provides a useful guide to the types of activities, and the circumstances under which proposals are captured by the Act. This exercise is particularly valuable for the oil and gas sector.With a significant proportion of referrals received being generated by the petroleum industry, many issues with the administration of the Act have been identified. Environment Australia has undertaken a number of initiatives to address these concerns. Examples include involvement in the Strategic Assessment being conducted by the Department of Industry Tourism and Resources (DITR), a review of the Referral form and an undertaking to provide a more industry-specific form, and regular, high level meetings between Environment Australia, the DITR and APPEA to facilitate and streamline the working arrangements between parties.The paper also identifies areas where industry can work closely with the Commonwealth Government in new ways to achieve a balance between environmental protection and the continued development of the oil and gas industry.

Russian depreciation policy: causes and solutions

2017 ◽  
Vol 30 (1) ◽  
pp. 126-135 ◽  
Author(s):  
A. N. Ivanov
Keyword(s):  
Historical Perspective ◽  
Oil And Gas ◽  
Oil And Gas Industry ◽  
Gas Industry ◽  
Russian Economy ◽  
Fixed Assets ◽  
High Level ◽  
Very High

Today the Russian economy has a very high level of the depreciation of fixed assets, which more and more brightly expressed in the reduction of competitiveness of oil and gas industry. The main reason is an ineffective system of depreciation policy in the country. This article deals with the main «weaknesses» of Russian depreciation policy, their causes in historical perspective, and provides experts’ solutions and the author's vision on the necessary updates.

TRENDS IN THE DEVELOPMENT OF THE OIL AND GAS MARKET AND THE MAIN MEASURES OF STATE SUPPORT AIMED AT THE IMPLEMENTATION OF ARCTIC OIL AND GAS PROJECTS

2021 ◽  
Vol 5 (11) ◽  
pp. 31-38
Author(s):  
Igor V. Selin ◽  
◽  
Mikhail V. Ulchenko ◽  
Keyword(s):  
Oil And Gas ◽  
Oil And Gas Industry ◽  
Gas Production ◽  
State Support ◽  
Gas Industry ◽  
Oil Companies ◽  
Oil Reserves ◽  
Exploration Drilling ◽  
Gas Market ◽  
High Level

This article is devoted to the study of the main trends in the development of the oil and gas market, as well as the transfer of state support aimed at the implementation of Arctic oil and gas projects. The analysis showed that 2020 turned out to be extremely difficult for the oil and gas industry as a whole. The volumes of oil and natural gas production and consumption decreased, and due to a reduction in revenue, large domestic companies began to save on exploration drilling. Given the high level of «depletion» of oil reserves in traditional fields, with an increase in demand, in the short term, domestic oil companies will not be able to quickly increase production volumes and take advantage of favorable market conditions.

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