Management consulting firm Ernst & Young’s assessment of 365 oil and gas megaprojects, each of them costing more than $1 billion, found that 64% came in over budget and 73% fell behind schedule. “Companies can no longer rely on oil and gas price increases which in the past have masked many of the consequences of megaproject overruns,” said EY’s Global Oil & Gas Advisory Leader, Axel Preiss. “Unconventional discoveries have already had an impact on the economic viability of many megaprojects and securing capital is only going to become more difficult unless companies are able to consistently deliver on deadline and within budget.” Anderson says the study projected $22.4 trillion in global megaproject investment through 2035, “at a time when the majors face pressure to reduce capital expenditure amid dwindling profit margins and stagnant commodity prices.”
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