By their nature, capital projects are not part of day-to-day operations. Whether related to infrastructure, construction of a new plant, buildings or systems, they require separate financing, management, governance and assurance. The scale of projects in the energy sector presents immense challenges at the best of times. In a world of economic downturn with uncertain demand and volatile commodity prices, these challenges are magnified.
Energy companies are faced with the challenge of balancing their immediate and short term response to the current economic downturn, constrained funding environment and lower market prices with their long-term need to develop capacity and prepare for future demand. The challenge is even greater when account is taken of the need to mitigate climate change and changes in the regulatory environment.
Critical questions project organisations should consider:
Risk, complexity and high costs are features of major capital projects. All too often projects are affected by cost and time overruns, or fail to meet business case objectives. These threaten the implementation of business strategy, divert management focus and may lead to re-financing or, in the worst case, insolvency. Our team of industry specialists have extensive experience of assisting clients in the review, understanding and improvement of capital project performance in a broad range of industry sectors.