«Problems of economics and management of oil and gas complex»

Global transformation of the global oil and gas industry in the period of 1990–2000

UDC: 338.49
DOI: -

Authors:

¹ LUKOIL-Engineering, Moscow, Russia

Keywords: oil and gas company, oilfield services company, EPC-company, project regulations, project management, efficiency, systematic approach, investment risk, production structure, implementation of capital projects

Annotation:

The author of the article analyzes the global transformation of the global oil and gas industry initiated by international oil and gas companies in the period of 1990–2000. By the mid-1990s, there appeared objective barriers to the effective implementation of large oil and gas projects in the industry. The impact of organizational and technical risks typical for implementation of joint venture projects by oil and gas companies increased. Traditional risk mitigation methods have exhausted their potential. There appeared the necessity of developing new approaches to big projects organization and management large projects. Solutions were found through the development and implementation of unified project procedures by oil and gas companies based on a system approach. Simultaneously, the oil and gas industry was restructured. Departments involved in oilfield service integration, field development design as well as production and construction management, were eliminated from oil and gas companies. The released personnel was systematically transferred to oilfield service and EPC (Engineering, Procurement and Construction) companies. The headcount of oil and gas companies personnel was significantly reduced. At the same time, companies-contractors with advanced engineering and production capabilities and numerous qualified personnel entered the market. Based on the unification of project procedures and restructuring, a new integrated industry structure was formed. The transformation of the oil and gas industry facilitated high operational efficiency in the face of limited financial resources and new technical challenges. The practices of foreign oil and gas, oilfield service, and EPC companies can be adopted for further development of the Russian oil and gas industry.

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