Aug. 14 (UPI) -- The energy majors are getting more efficient with megaprojects offshore, but it will be planned LNG projects that test their mettle, Wood Mackenzie found.
A report sent Tuesday to UPI from the consultant group found deepwater efforts are improving. During the last decade, the 15 largest efforts offshore were late and collectively $80 billion over budget. Better planning, improved corporate discipline and the ability to tie new projects into existing developments have partly erased that trend.
Angus Rodger, a research director at Wood Mackenzie, said "value destruction" is becoming a thing of the past for upstream projects. The next test, he said, will be in emerging liquefied natural gas projects.
"After a fallow period in new LNG project sanctions, and megaprojects in general, the next 18 months will likely see a step change," he said in a statement. "This will be the real test of whether the industry has addressed the issue of poor delivery."
French supermajor Total in the span of a month revealed progress at two of its LNG projects. The first shipment from the second liquefaction facility at the Yamal LNG plant in the Russian Arctic was announced last week, ahead of schedule.
"Following the successful start-up of Yamal LNG in December last year, the first shipment from the second train ahead of schedule is another major milestone for this world-class LNG project," Chairman and CEO Patrick Pouyanné said in a statement.
At the end of July, the company announced that it opened its first offshore production well at the Ichthys LNG project off the coast of Australia, kicking off the start of 40 years of operations.
In its second quarter results, the French supermajor said its net production was up nearly 10 percent from last year, driven in part by gains in LNG.
According to Wood Mackenzie, it's the LNG business where there are clear signs of big spending ahead.
"There is a looming wave of big pre-(final investment decision) LNG developments building on the horizon, all aiming for sanction between 2018 and 2020," Rodger said.