Agilis – Cost estimate certainty

Problem statement

From 2011-2016 fewer than 25% of oil and gas projects in the UKCS were delivered on time. Projects averaged 10 months delay and came in around 35% over budget (OGA).

Aims

Use better techniques to improve oil and gas project cost estimates.

Method

Collaboration between Agilis, a process improvement consultant and Barnett Waddingham, a leading UK actuarial firm.

Agilis cost model framing workshop engages with uncertainty and addresses bias. Barnet Waddingham draw on their experience of probabilistic modelling and estimate governance for the insurance and financial sectors to provide a more rigorous cost model for oil and gas projects that recognises complexity and reduces uncertainty.

Impact

• Better understanding of project risk exposure: avoids over/under-provisioning
• Allows planning for uncertainty: e.g. pre-emptive “delay analysis”
• Provides a robust and transparent governance standard familiar to banks, investors and government: cheaper finance

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