Cost Overrun Analysis with a Focus on the Nova and Duva Tie-Back to Gjøa Offshore Platform Projects

Abstract

This thesis addresses the recurrent issue of cost overruns in the oil and gas sector, focusing on projects conducted by Rosenberg Worley. Despite extensive research on cost overruns, effective solutions to mitigate these repeated occurrences still remain elusive. This research aims to identify the primary factors affecting cost estimation inaccuracies and cost overruns at Rosenberg Worley and thoroughly analyze the current procedures and methodologies used by the company.

The study begins with a comprehensive literature review to establish a foundation, followed by detailed examinations of two case studies on the Nova and Duva projects from Rosenberg Worley. Data from these case studies were sourced from classified project documents, including Scope of Work documents, Baseline reports, and Cost Estimation reports. By integrating the analyzed literature with practical data, this research identifies key factors contributing to cost overruns and suggests strategies for mitigating these overruns and improving cost estimation.

Key findings emphasize the importance of accuracy in initial project planning, thorough risk management strategies, and maintaining an accurate and flexible schedule throughout the project lifecycle. The analysis revealed that insufficient scope definition and frequent scope changes significantly contribute to cost overruns. As a result, recommendations are made to address these factors and mitigate future cost overruns.

This thesis contributes to the field by providing practical recommendations for improving cost estimation accuracy and reducing cost overruns, based on extensive research from both literature and practical data from Rosenberg Worley, ultimately enhancing project success in the oil and gas industry.