Engineering and construction (E&C) firms have come to the forefront of shale development as the refinement of their techniques has reduced cycle times by up to 40% and driven down 25% of costs.

Such firms play a key role in delivering shale oil and gas products at quicker speeds and lower costs through integrated project planning, which has emerged as a leading trend in shale development, according to a mid-November report by PwC US

E&C firms are now focused on speed and flexibility. Shale gas made up more than 25% of domestic gas production, at 553,000 barrels per day in 2011, and the growth rate is expected to reach 50% of domestic production by the next decade.

“Oil and gas companies, aided by their engineering and construction (E&C) partners, are beginning to take on the challenge by stepping back and analyzing what is and is not working across the shale-gas value chain,” said John Doherty, US engineering and construction advisory leader at PwC.

They are examining the thousands of repetitive activities and handoffs between functions where efficiencies can be found, according to the report.

E&C companies are engaged in two practices to keep their edge: reducing drag and optimizing the play.

Reducing drag is a means to achieve speed and efficiency in shale well development, planning and execution.

Optimizing a play requires producing returns through streamlining operating expenses, capital investment and resources across the portfolio of development and production.

“Given the high stakes, cost pressure and intense competition in the shale industry, oil and gas companies are learning to apply a holistic lens to all aspects of shale development and managing them from end to end,” Doherty said. “This creates an opportunity for engineering and construction firms to become a key asset in the process, as they adjust their traditional project management model and create fast response systems to the changing environment.”

The communications field is also vital as components in a project become integrated. Information technology and enterprise systems are emerging as factors that significantly improve decision-making and drive productivity.

“Many oil and gas companies manage these elements in silos, resulting in difficulties when trying to balance the demands from the field with the priorities of other functions,” Doherty said.

E&C companies have to ensure a seamless, automated flow of data and information between them and their clients, as well as across a client's enterprise.

—Darren Barbee

Comments