During the next several years, the number of billion-dollar E&P projects is expected to triple, according to Richard Ward, a Cambridge Energy Research Associates director. The key to making these future projects reality is to overcome the challenges of cost and capacity. "All of the current projects under way for independent producers are not expected to be on time and under budget, but what if they were?" he said at the annual Cambridge Energy conference in Houston last month. Some of the options companies have utilized include canceling, delaying, restructuring or developing more efficient execution strategies for the projects. "Part of the organizational problem is in the way project information within the company isn't being distributed appropriately. Decisions that should have taken days are taking weeks as a result. Management teams have to take more of a corporate mentality when it comes to project organization instead of an ad hoc mentality." Today, advanced technology is making it possible to link project elements together at reasonable costs, increasing independents' chances of finding success with organizing larger-scale E&P projects, Ward said. "Using this technology is also part of a willingness to try different forms of project restructuring. Traditionally, the E&P business is the center of the universe. In emerging models, a professional management team is often hired from the outside. Petrobras is an example of a company using the emerging model of management." Another forward-thinking management trend is in the democratization of information about company projects, Ward said. "Ten years ago, the chief executive was the only one that could request certain project-related reports. Today, the guy selling the donuts can get them." While technology can help to connect the various "arms" of massive E&P projects, management must still pay attention to project details each step of the way. "This will result in much more efficient execution." "Right now the industry average is about 10% late for the delivery of projects. Getting it down to 5% through project organization could mean the difference in upstream/field-development projects staying on track in the future."

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