1 Introduction

Evaluation-of-projects-forside
04.11.2013
Reference is made to the inquiry from the Ministry of Petroleum and Energy (MPE) of 13 March 2013, requesting that the Norwegian Petroleum Directorate (NPD) conduct a review of projects where production has recently started, or should have started, and that have an investment scope exceeding NOK 10 billion. The review will include all projects with an approved development plan in the years 2006 to 2008.

This report summarises the NPD’s response to the request.

The main objective of the project review has been to understand the reasons why licensees do or do not succeed in implementing projects on time, with quality and costs in accordance with the plan for development and operation (PDO) and in turn using this to highlight important lessons and experience transfer to other projects. A secondary goal has been to provide a description of the actual cost development and implementation time for each project, as well as to describe the project experiences, including causes of deviations in implementation time and costs in relation to the PDO.

It has been important to limit the task to a manageable, but representative selection. By taking a basis in the framework provided in the assignment from the MPE, the scope is limited to review of the following projects: Skarv, Yme, Valhall Redevelopment (VRD), Tyrihans and Gjøa. These are projects with a PDO approved in the period 2006 – 2008, and with investments exceeding NOK 10 billion. The projects are distributed among three operators and represent significant variation in development concepts. The selection includes both projects implemented with significant time and cost overruns, as well as projects implemented in accordance with the PDO, with regard to both time and costs. The Yme project is included in this connection because, while the original investment estimate in the PDO was less than NOK 10 billion, the final investments for the project exceed NOK 10 billion. Tyrihans is also included as the approval date by the Storting (Norwegian Parliament), 2 December 2005, was near 2006.

The development of costs and time, as well as causes and experiences are based on the operator’s reports at the request of the NPD. Meetings have also been held with the relevant operators. A basis is taken in the estimates in the PDO. The most important reasons for overruns are described, as well as lessons learned from the projects. The NPD’s overall assessment is provided in Chapter 5.