Investigation into the performance of oil and gas projects

Many oil and gas projects experienced significant cost overruns, which is a major concern for the industry. The objective of this study is to investigate the cost performance of oil and gas projects by analyzing the data of approximately 200 public oil and gas projects. The average cost overrun of the projects is 18% with a standard deviation of 29%. The results also indicate that the error of underestimation is more frequent and greater than that of the overestimation. The projects' cost performance is also examined in terms of project size, type, region, joint venture information, and Final Investment Decision (FID) year. All effects of each factor are tested with statistical methods, and various drivers for cost performances are suggested to explain the differences in cost performance. The findings of this research will provide some guidance and references for future improvement in project performance.