Understanding Drivers of Rising Owner’s Costs in the Oil & Gas Industry

In response to rapid increases in exploration and production (E&P) owner’s cost Independent Project Analysis (IPA) has recently completed a joint industry study to investigate and provide solutions to this issue. Key questions addressed in this study include:

• What is the long-term outlook for owner’s capital project cost?
• Why are our costs rising so much and what are we getting in return?
• How do our owner’s cost compare with our competitors?
• How should owner’s cost change with project size, complexity, or geography?

Participants in this Joint Industry Project received a unique set of benchmarks and insights that answer these questions.

Clients benefit from the creation of an industry standard breakdown structure for owner’s costs that can be used to facilitate comparisons across project types and operators. IPA research has also quantified trends in cost categories based on the work breakdown structure. A future trends outlook is also included as well as an evaluation of the root cause for the trends. The study also assesses the levers that operators can use to optimize owner’s costs.

This study is now complete, but its insights as well as the system diagnostic are available to new participants. For more information, visit IPA’s Cost Engineering page.