P&T is responsible for delivering capital projects. Some of them are expansions of existing projects, others are completely new facilities. Many are huge undertakings. A single project may involve several years of design and engineering work, hundreds of wells, thousands of construction workers, and billions of dollars’ worth of materials and equipment. In the face of such complexity, we constantly seek opportunities to improve efficiency and reduce costs. These efforts have intensified because of the challenging market conditions.
In 2015, P&T launched a sweeping improvement programme to obtain longer-lasting value from its projects’ design, procurement and construction. The programme has been set up along four themes: competitive scoping, technology & innovation, efficient execution and supply-chain transformation. (See “In focus” page for more details.)
The Appomattox deep-water project in the Gulf of Mexico is a good example of how these improvement themes can be integrated to achieve capital efficiency. Although this project had already progressed well through the design phase, the integrated approach reduced its total project cost by 20% relative to its initial project estimate. This enabled the project to secure a positive final investment decision in 2015.