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The Problem With Big Oil - It’s Too Big

If what has been happening in oil and gas over the last two years was made into a TV show, it would have been a real hit. An epic drama hit. It’s not just oil and gas prices; it’s also project efficiency – or rather the lack thereof – as well as the inability or unwillingness to acknowledge new trends in energy and act accordingly.

Let’s talk a bit about inefficiency first. A recent E&Y study made some horrible revelations: as much as 64 percent of 365 megaprojects went into cost overruns and even more, 73 percent, failed to keep to their schedule. It’s even worse for the biggest among these megaprojects. The FT quotes E&Y as reporting that out of the 20 biggest oil and gas projects in recent years, 13 ran above their initial budget, with three of these going as much as 75-100 percent above it.

These are all projects that were conceived, planned and executed by companies with a long history in the business and a lot of experience in project management. So, what went wrong? One suggestion is that the supermajors simply got...


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