Page 35 - 51

price sharp drop no longer allowed for such inef-
ficiencies.
Oil majors cut capex through project delay but also
through efficiency improvement solutions such as:
1. New approaches to exploration and devel-

Oil majors cut capex also through
efficiency improvement solutions
IOCs upstream inefficiencies. However, Deep-
water higher costs of development (ex. average
field development times were over 5 years, aver- opment (ex. eni’s “near field” aiming at quick
age well took 90-120 days to drill at average cost development of value assets, leveraging syn-
of 1M$/day, …) posed significant challenges to oil ergies from production infrastructure already
companies. Since 2008 signs of industry overheat- existing in the field; “Fast track” development,
ing were therefore evident: more capex was spent aiming at quick field appraisal and develop-
to sustain stagnating/ slightly increasing production ment, through concepts reutilization, spec
levels. Oil majors drove inefficient 2005-13 expan- simplification, standardization, …)
sion (red line in figure 9), quickly pulling back capi- 2. New contracting strategy (ex. Multi-package
tal expenditure from mid-2014 (blue line), as the oil approach)

Figure 9 – O&G expenditure and activity index since 2000

3. Investment in digital solutions and enablers
(ex. BP’s ‘Field of the Future ®’; Shell’s ‘Smart
Fields ®’, Chevron ‘iField iWell’, …)
4. A few started early diversification into renew-
ables: Total is today one of the major solar
player at global level, after it acquired Sunpow-
er in 2011. More recently eni has announced a
partnership with GE to develop renewables in
Africa while Shell is studying acquisitions in the
green energy sector
Such efforts aimed at reducing expenditure, al-
though, as can be seen from the blue line in figure
9, efficiency targets haven’t been met yet.

OFSE Suppliers reacted. Indeed project com-
plexity had already driven a general quest for more
efficiency for years. Therefore, both EPCs and

Impiantistica Italiana - Gennaio-Febbraio 2017 33