IEA: Industry prefers quick ramp-up projects

IEA: Industry prefers quick ramp-up projects
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IEA: Industry prefers quick ramp-up projects

The upstream oil and gas and power generation industries prefer to approve projects with shorter construction times compared to 10 years ago, Kallanish Energy reports.

The trend is discussed in the report World Energy Investment 2019, released by the International Energy Agency (Iea) earlier this week.

Capacity is now brought to market 20% faster than in 2010, limiting capital risk and better reacting to changing market conditions.

“This reflects better project management and improved economics for shorter cycle technologies as well as industry competition,” the report states.

Upstream oil and gas costs fell 30% between 2014 and 2016, only to slightly pick up in the following two years, but still remaining lower than the increase in oil prices.

The timeframe to market conventional projects got shorter and there has been more investment in shale, according to the report.

According to a report shared last week by independent research/ consultancy company Rystad Energy, shale oil is more cost-effective than conventional resources, as the time between sanctioning new wells and the start of operations is relatively compressed.

Successful offshore exploration activities need seven to 12 years to recover investment, while shale needs only between two and four years, allowing companies to adapt to market conditions.

Read it from kallanishenergy

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