Most North Sea projects are late and over budget

MOST big North Sea developments have been hit by lengthy delays in recent years while significant cost overruns have become the norm, according to research which highlights the impact of behavioural failings in the area.

The Oil and Gas Authority regulator found new developments were completed an average 10 months behind schedule and 35 per cent over budget between 2011 and 2016.

With around three out of four projects found to have finished late, the study may stoke concern about the level of efficiency in an industry which prides itself on being a world leader in terms of engineering standards.

Oil and gas firms are grappling with the impact of the sharp drop in crude prices since 2014, which makes it imperative that projects are delivered on time and on budget.

However, the OGA study provides further evidence of the need to change cultures and management attitudes in the North Sea, where firms invested more than £40 billion in new oil and gas projects in the last five years.

The OGA’s operations director, Gunther Newcombe, said: “One of the key findings was that there was no correlation found between the size and complexity of projects and delay, with the key factors being non-technical in nature.”

The OGA report on the lessons learned from the study notes: “Many behaviours continue to contribute to poorer project delivery, inflated budgets and schedule, or projects not even getting sanctioned.”

Highlighting the prevalence of adversarial behaviour in the industry, the report cites issues such as centralised functional control,