Study: Supermajors Remain Pressured Despite Cost Efficiency Gains

Efforts that have included smaller project footprints, simplified processes and standardization, technology and lower service costs resulted in a more than 41% drop last year on an index that tracks the development costs of oil and gas supermajors.

But despite improved performance, costs were still higher than they were between 2011 and 2014 when costs for materials, equipment and labor rose as oil companies faced overruns and delays, according to a study recently released by Apex Consulting’s Muktadir Ur Rahman.

Cost efficiency gains made since 2014—when lower oil prices forced supermajors and smaller companies alike to work smarter—have ushered in an era of cost control and capital discipline; however, challenges remain when it comes to cost reduction sustainability. There are ways to mitigate the risk of rising costs, and some companies are already on the path.