UIBC 2024 Addresses Upstream Industry Project Performance, Engineering Slip, Appraisal Effectiveness, Production Attainment, and More
The annual meeting of the Upstream Industry Benchmarking Consortium (UIBC) will take place on Monday, November 18 to Wednesday, November 20, 2024, in McLean, VA. This year, about 90 upstream sector project professionals representing owner companies that benchmark their capital projects with Independent Project Analysis (IPA) will be in attendance. Over the course of UIBC 2024, IPA will share exclusive new research studies, highlight industry trends and metrics, and lead focused discussions—all to help UIBC members continuously improve upstream capital project practices and performance.
Continue reading for highlights of selected research studies, focused topic sessions, industry metrics and trends, and presentations delivered at UIBC 2024.
UIBC Metrics & Trends
The Industry Performance Metrics presentations will discuss E&P capital project performance metrics and drivers based on the historical data collected by IPA year to year. The presentation will show general industry trends going back several years all the way to the present, with the most recent set of completed and ongoing projects. The reasons and causality behind the observed behavior will be discussed as well. We will also show the recent capital project performance metrics and drivers of the UIBC member companies with their respective logos and positioning with respect to their peers.
RESEARCH STUDY: Engineering Schedule Slip for E&P Projects
Cycle time—and the execution schedule, in particular—remains a topic of high interest among E&P operators. Within execution, engineering schedule slip has been a characteristic of E&P developments for many years and, in general, the industry does not have a comprehensive view of the root causes of slip. The pandemic, supply chain issues, and progressive deterioration of engineering quality appear to have made things worse in the last few years. This study will discuss the current root causes of engineering slip and propose Best Practices for risk mitigation, measurement, and control.
RESEARCH STUDY: Addressing Optimism Bias in Production Estimates
Early production is the primary driver of value in E&P developments, and production shortfalls are the biggest source of value erosion. This study focuses exclusively on reservoir performance (i.e., independent of facility or wells issues), and reservoir performance is driven by appraisal. Previous appraisal studies show that when reservoirs are not well understood, resource promise downgrades are more likely. This suggests optimism bias is creeping into our reservoir estimates, particularly when appraisal information is limited. This study examines wells-adjusted production to directly assess production target setting. We are interested in the interplay between reservoir appraisal and production rate target setting and their influence on per-well production rate performance. Our goal is to better identify when reservoir production targets are unrealistic and which appraisal elements are most important to meeting those production targets.
INDUSTRY TRENDS: Carbon Readiness and Competitiveness
Understanding carbon competitiveness is an important decision factor in opportunity selection and project development. IPA has evaluated the carbon competitiveness targets of many E&P projects over the last few years. In this session, we will present the most current data collected from project teams using IPA’s standard emissions breakdown structure and benchmarking methodology. We will present industry trends in project-level greenhouse gas (GHG) emissions performance and emerging practices that influence this targeted outcome. Finally, we will highlight the key drivers of low-carbon performance and provide quantitative insights into how certain decisions and scope choices influence carbon competitiveness.
FORUM LAUNCH: E&P Decarbonization
At UIBC 2024, IPA will launch the E&P Decarbonization Forum, a sector group of the broader industry Carbon Working Group (CWG). This forum will continue the format of the CWG based on mutual collaboration of client members and IPA to further develop carbon emissions benchmarking capabilities and other decarbonization topics of interest to E&P operators.
STATE OF CONTRACTING IN E&P: Markets and Contracts
Owner companies around the world are struggling to get their major projects contracted using traditional EPC lump-sum wrap arrangements. The number of bidders is thin, and the winning contractor bids are higher than seems reasonable. This squeezes margins on projects that, in many cases, are already stressed. The question addressed here is: Why? Markets are not overheated; indeed, the level of activity in the markets is cool-to-moderate in most parts of the world. We address the conditions that have created this market and then address what works—and what clearly does not—to substitute for traditional contracting approaches.
RESEARCH STUDY: Production Attainment: Subsurface and Well Construction Lessons Learned
The economic importance of achieving the planned production is obvious; yet, over the last three decades, there has been no significant industry improvement in our ability to deliver to plan. Over the last 25 years, IPA has developed several studies for UIBC on production attainment, with the latest being a compilation of historical lessons learned presented at UIBC 2022 that covered key areas such as fluid problems, schedule pressure, facility issues, external constraints, and basis of the planned profile. This year’s study provides a deeper understanding of the root cause lessons learned by unpacking the subsurface and well construction issues that affect production performance.
RESEARCH STUDY: Capital Project Governance
In this survey-based study, we present the findings on the UIBC and IBC clients’ capital projects governance processes. The presentation will discuss the governance model and client strengths and weaknesses of each element of the model in relation to project performance metrics.
METRICS & TRENDS: Site and Sustaining Capital (SSC) Projects
The Site and Sustaining Capital (SSC) Performance Metrics presentations will discuss SSC E&P capital project performance metrics and drivers based on the historical data collected by IPA year to year. The presentation will show the industry’s status based on the performance from several business units during the last 5 years. The reasons and causality behind the observed behavior will be discussed as well. We will also show the performance metrics and drivers of the UIBC member companies with their respective logos and positioning with respect to their peers.
In addition, UIBC members will also participate in sessions covering a range of topics, including:
- Managing Engineering Slip
- Project Governance
- E&P Project Manager Competency Development
- Offshore FEL Software Discussion/Demo
Upstream sector companies interested in joining the UIBC are encouraged to complete the web form below to request more information.