Oil & Gas
O&G companies can use management practices and digital technologies deployed by other industries to boost capital-project productivity. Project Production Management (PPM), digitizing processes, advanced analytics, and agile ways of working can all yield significant improvements. But simply copying such practices won’t be sufficient because O&G projects are unusual in some important respects. In particular, no O&G project is the same as the one that preceded it, and lead times are extremely long. Moreover, team personnel often change with the project. Consequently, each new project brings a new set of challenges and a new learning curve, thus limiting the potential for boosting performance. If O&G companies can adapt these practices to meet the needs of their unique environment, considerable improvement is possible: by our estimate, reducing development time alone has the potential to deliver 15 to 30 percent in cost savings. As more typical installations and technologies become more commoditized, O&G players that don’t revamp their approach to capital projects now may be forced into ever more technically specialized—and often costlier—projects. The potential benefits could be worth billions.