Oil and gas project management is a complex and challenging process that involves multiple stages, from exploration to production. The industry is constantly evolving, and project managers must stay up-to-date with the latest trends, technologies, and best practices to ensure successful project delivery.
In this blog post, we will explore oil and gas project management statistics that highlight the challenges, opportunities, and trends in this dynamic industry.
Key Oil and Gas Project Management Statistics – MY Choice
- According to a study by McKinsey, only 25% of oil and gas projects are completed on time and within budget.
- The average cost overrun for oil and gas projects is around 50%.
- The oil and gas industry is one of the most capital-intensive industries in the world, with an estimated $1.7 trillion in capital investment expected between 2020 and 2025.
- The average time from discovery to first oil production in the oil and gas industry is around 7 years.
- Approximately 70% of oil and gas projects experience delays of more than 6 months.
- A report by EY found that project delays can cost oil and gas companies up to $75 million per day.
- In a survey conducted by Deloitte, 58% of oil and gas professionals cited “poor project management” as a significant challenge facing the industry.
- The use of digital technologies, such as artificial intelligence and automation, is expected to save the oil and gas industry up to $150 billion per year by 2025.
- According to a report by the World Economic Forum, the oil and gas industry is one of the least digitized industries, with only 1% of data generated by oil and gas operations being used to improve decision-making.
- A survey by PwC found that 80% of oil and gas executives believe that digital technologies will transform their industry in the next 5 years.
Oil and Gas Project Management Stats
Oil and Gas Project Management Industry Overview
- The global oil and gas industry is expected to reach $2.3 trillion by 2025. (Statista)
- The industry employs over 5 million people worldwide. (Statista)
- The US is the world’s largest producer of oil and gas, followed by Russia and Saudi Arabia. (Statista)
- The industry accounts for 10.3% of global GDP. (World Bank)
Oil and Gas Project Management – Exploration and Production Stats
- The average cost of an offshore drilling project is $650 million. (Energy Information Administration)
- The average time to complete an offshore drilling project is 5-7 years. (Energy Information Administration)
- The average cost of an onshore drilling project is $7 million. (Energy Information Administration)
- The average time to complete an onshore drilling project is 3-6 months. (Energy Information Administration)
- The average cost of a shale drilling project is $8-10 million. (Energy Information Administration)
- The average time to complete a shale drilling project is 30-90 days. (Energy Information Administration)
- The global offshore oil and gas drilling market is expected to grow at a CAGR of 7.4% from 2021 to 2028. (Grand View Research)
| Topic | Data |
|---|---|
| Oil and Gas Project Management Benefits Statistics | |
| % of non-software projects that fail to meet their stated benefits | 133% |
| % of software projects that fail to meet their stated benefits | 17% |
| % of projects that meet scope | 61% |
| % of projects that meet quality standards | 60% |
| % of projects that meet expected benefits | 51% |
| How project success is measured | |
| % of respondents who measure success by satisfied stakeholders | 20% |
| % of respondents who measure success by delivered on time | 19% |
| % of respondents who measure success by delivered within budget | 18% |
| % of respondents who measure success by achieving target benefits | 17% |
| % of respondents who measure success by producing high quality deliverables | 15% |
| % of respondents who measure success by achieving acceptable ROI | 9% |
| Top 5 PPM Functions | 14% say ROI |
| Oil and Gas Project Management Software Statistics | |
| % of organizations that use a PM software | 22% |
| % of respondents who spend one or more days to manually collate project reports | 50% |
| % of high performing projects that use project management software | 77% |
| % of project managers who would use PM software more extensively with adequate support from their organization | 66% |
| % of project managers who use on-premise PM software | 54% |
| % of project managers who use no software | 44% |
| % of respondents who use project management software to communicate with clients | 66% |
| Average cost overrun for software projects | 66% |
| Average cost overrun for non-software projects | 43% |
| % of users who are either “very satisfied” or “satisfied” with their decision to use project management software | 76% |
| % of organizations that offer PM software tool training | 79% |
| % of organizations that offer training on PM basics | 76% |
| % of organizations that offer advanced PM skills development | 67% |
| % of organizations that offer leadership training | 61% |
| Business aspects significantly improved by PM software | |
| % of respondents who reported improvement in team communication | 52% |
| % of respondents who reported improvement in quality of final product | 44% |
| % of respondents who reported improvement in number of projects completed on budget | 44% |
| % of respondents who reported improvement in number of projects completed on time | |
| % of organizations that use PM software to communicate with clients | 66% |
| % of respondents who are either “very satisfied” or “satisfied” with their PM software | 76% |
| Top 5 causes of project failure | |
| % of respondents who cited change in the organization’s priorities as the cause of failure | 39% |
| % of respondents who cited functionality issues as the cause of failure for large IT projects | 22% |
| % of respondents who cited schedule overruns as the cause of failure for large IT projects | 28% |
| Oil and Gas Project Management Adoption Statistics | |
| % of organizations that use PM software | 77% |
| Oil and Gas Project Management Latest Statistics | |
| Typical entry-level education for jobs in Oil and Gas Project Management | |
| % of jobs that require a high school diploma or equivalent | 8% |
| % of jobs that require a Bachelor’s degree | 6% |
| % of jobs that require an Associate’s degree | 4% |
Project Management Challenges
- 50% of oil and gas projects experience cost overruns. (McKinsey & Company)
- 70% of oil and gas projects experience schedule delays. (McKinsey & Company)
- The top three causes of project delays are engineering design changes, procurement delays, and construction delays. (McKinsey & Company)
- The top three causes of cost overruns are scope changes, engineering design changes, and unexpected project issues. (McKinsey & Company)
- The average cost of project delays is $6.5 million per day. (McKinsey & Company)
- The average cost of rework due to errors and omissions is 12% of the total project cost. (McKinsey & Company)
Project Management Best Practices
- Using a standardized project management process can reduce project costs by 20-30%. (McKinsey & Company)
- Implementing a digital twin can reduce engineering design changes by up to 50%. (McKinsey & Company)
- Using advanced analytics can improve project performance by up to 10%. (McKinsey & Company)
- Implementing a risk management plan can reduce project risks by up to 50%. (McKinsey & Company)
Oil and Gas Project Management Technology Trends
- The global digital oilfield market is expected to reach $33.3 billion by 2027. (Grand View Research)
- The use of artificial intelligence in the oil and gas industry is expected to grow at a CAGR of 12.7% from 2021 to 2028. (Grand View Research)
- The global oil and gas drones market is expected to grow at a CAGR of 15.5% from 2021 to 2028. (Grand View Research)
- The use of blockchain technology in the oil and gas industry is expected to grow at a CAGR of 52.8% from 2021 to 2028. (Grand View Research)
The Importance of Risk Management in Oil and Gas Project Management
| Data | Value |
|---|---|
| Biggest challenge: demonstrating the added value of the PMO | 41% |
| Organizations that always use risk management practices | 27% |
| Organizations that sometimes use risk management practices | 35% |
| Organizations that never use risk management practices | 3% |
| Senior leaders that fully understand the importance of PM | 87% |
| Organizations satisfied with their current PM maturity level | 32% |
| Departments with PM maturity level of 3 or more | 67% |
| Organization-wide PM maturity level of 3 or higher | 47% |
| Completed projects with actively supportive sponsors | 62% (PMI 2017 survey) |
| Respondents who want business stakeholders more engaged | 78% (Geneca survey) |
| Projects that fail due to lack of involvement from senior management | 33% |
| Organizations that believe PM is critical to business performance and success | 97% (PwC study) |
| Biggest impact of project management on businesses | Team communication (52%) |
| Improvement in the quality of the final product due to PM | 44% |
| Improvement in customer satisfaction due to PM | 38% |
| Respondents whose organization has a professional Project Manager | 42% (Wellingtone survey) |
| Projects that met original goals/business intent in 2018 | Nearly 70% |
| Projects completed within original budget in 2018 | Nearly 60% |
| Organizations that reported lack of funding as top PM challenge in 2018 | 71% |
| Organizations that reported inconsistency in approach as top PM challenge in 2018 | 49% |
| Average IT project budget overrun according to HBR survey | 27% |
| IT projects that become a “black swan” | 1 in 6 (cost overrun of 200% and schedule overrun of 70%) |
| IT projects with budget over $1M more likely to fail | 50% |
| Companies that completed 100% of their projects successfully | 2.5% (PwC study) |
| Organizations using proven PM practices waste less money | 28x less (CIO) |
| Respondents who spend half their time on rework | 80% (Geneca survey) |
| People involved in projects who feel business objectives are clear | 55% |
| People involved in projects who feel requirements process doesn’t articulate business needs | 80% |
| Respondents who agree when a project is done | 23% |
| Projects at IBM meeting schedule, budget, and quality goals | 40% |
| IT projects that can threaten the existence of the company | 17% |
| Biggest reason for dissatisfaction with a project | Price (56%) |
| Projects with high PM maturity level delivered on time | 64% |
| Projects with high PM maturity level completed within budget | 67% |
| Projects with low PM maturity level delivered on time | 36% |
| Projects with low PM maturity level completed within budget | 43% |
| High-performance organizations making ongoing PM training investment | 83% |
| High-performance organizations with formal PM competency development processes | 77% |
| Underperformers with similar PM training investment | 34% |
| Respondents who think soft skills are more important today | 51% (PMI |
Risk management is a critical part of oil and gas project management. Failure to properly manage risk can lead to safety incidents, environmental damage, project delays, and cost overruns, all of which can have significant financial and reputational consequences. Project managers in the oil and gas industry must prioritize risk management to ensure the success of their projects.
- Project Delivery Effective project delivery is crucial for the success of oil and gas projects. Here are some statistics related to project delivery:
- Only 25% of oil and gas projects are completed on time and within budget.
- The average cost overrun for an oil and gas project is 20%.
- The use of project management software can reduce the likelihood of cost overruns by 33%.
The Importance of Effective Project Delivery in Oil and Gas Project Management
Effective project delivery is essential for the success of oil and gas projects. Given the high costs and complex nature of these projects, even small delays or cost overruns can have significant financial consequences. Project managers must prioritize effective project delivery by utilizing project management software and other tools to ensure that projects are completed on time and within budget.
- Workforce Management Managing a large and diverse workforce is a challenge in any industry, and the oil and gas industry is no exception. Here are some statistics related to workforce management:
- The average age of workers in the oil and gas industry is 49.
- 60% of the oil and gas workforce will be eligible for retirement in the next 10 years.
- The use of workforce management software can increase productivity by 20%.
The Importance of Workforce Management in Oil and Gas Project Management
With a large and aging workforce, workforce management is a critical component of oil and gas project management. By utilizing workforce management software and other tools, project managers can increase productivity, reduce costs, and ensure that projects are completed on time and within budget.
Conclusion
Effective project management is crucial for the success of oil and gas projects, which are often complex, high-cost, and high-risk. By utilizing the latest technology and tools, such as project management software, risk management software, and workforce management software, project managers in the oil and gas industry can increase productivity, reduce costs, and ensure the timely and successful completion of their projects.
