We help clients deliver world-class projects that yield maximum return on invested capital.
Oil and gas capital projects are becoming ever more complex. Venturing into unfamiliar terrain, extracting unconventional resources, managing intricate supply chains, and complying with rigorous environmental, health, and safety regulations all present huge challenges. Even the most successful companies routinely suffer cost and schedule overruns.
What we do
We help our clients achieve sustainable improvements in their project performance and capability development. In the past five years we have advised 40 percent of the world's top 20 oil and gas companies on capital productivity, in more than 140 projects spanning all major hydrocarbon basins.
We offer clients fresh insights, proven methods, and access to an unequalled pool of expertise, with 70 specialists who are supported by more than 300 experienced practitioners and dedicated implementation teams.
How we work
We support clients at every stage in their capital projects:
- during planning, we help clients with developing a project concept to deliver the greatest value at the lowest risk, using design tools to drive project value, and applying a modular approach to reduce capital expenditure
- in contracting and procurement, we help clients define a contracting model, select contractors, and establish appropriate price structures, contract terms, and incentives
- during project execution, construction, drilling, commissioning, and ramp-up, we help and boost project management through schedule optimization, contractor management, and lean execution—including waste and performance loss elimination—at the yard, on-site, and offshore
- to enhance project governance, we help clients define an operating model covering all dimensions of capital expenditure, from technical processes to mindsets and behaviors. We also help clients manage small projects as rigorously as large ones in order to capture savings of 20 to 30 percent
Examples of our work
A leading regional oil and gas company saw its capital expenditure rise threefold in 10 years, while production grew by just 2 percent. By adopting a design-to-value approach, it identified five value levers that saved 30 percent of the total cost of ownership in its tank farms, and 40 percent in gas conditioning.
An Eastern European national oil company embarking on a huge program to modernize its refineries sought our support with identifying the biggest value-creation opportunities. The client achieved a 30 percent reduction in the level of investment while seeing a decline of only 1 percent in commodity yield and revenue.
With our help, a refining and marketing company redesigned its governance processes and set up a capital-excellence team to address capital expenditure projects of all sizes across the organization. This five-month effort led to a 25 percent savings in capital expenditure.
We have proprietary tools and methods to help clients optimize performance across the project life cycle, including:
- the McKinsey Investment Readiness Assessment (MIRA) provides a solid fact base for funding decisions
- a Risk Register to help clients understand risks and design mitigation strategies
- a Lean Greenfield Tool for optimizing design from plant to production loop to equipment loop, and enables lean manufacturing
- a suite of purchasing tools for reducing capital expenditure
- a Contractor Dashboard tracking key metrics to create a robust basis for performance dialogues
- Energy Insights, which combines our analytical models, benchmarking capabilities, and proprietary insights for critical decisions on strategy, investment, and performance
We also provide procurement support via our global sourcing centers located in India, China, Eastern Europe, and Latin America.