Independent Cost Competitiveness Review for a Near-Term Gas Development

The Challenge

A global oil & gas supermajor was preparing a pre-FEED decision on a near-term gas monetization project — a shallow-water offshore gas development. Its internal competitiveness review had flagged that the project's system-level (Level III) costs were not first quartile, but leadership had no like-for-like evidence of where the project actually sat, what was driving the gap, or whether that gap could realistically be closed.

The company struggled to:

• Build a credible peer set in a region with very few directly comparable shallow-water gas projects.
• Isolate which cost systems — facilities, pipeline, or drilling & completions — were responsible for the competitiveness gap.
• Translate benchmark findings into a focused "to-goal" agenda rather than a blanket mandate to cut costs everywhere.

My Role

The supermajor engaged an independent consulting team to run the benchmarking workstream and feed a joint Gap-to-Goal workshop. I led the work: building a defensible peer set, normalizing costs top-down and bottom-up, quantifying the variance, and turning a fragmented cost picture into a board-ready competitiveness verdict — independent, not a defence of the project.

The Approach

1. Build a defensible peer set — screened global shallow-water developments by product, water depth, and first-production window; with ideal peers scarce, widened the criteria deliberately, growing the sample to 27 projects.
2. Top-down benchmarking (Level III) — normalized each peer's system-level costs and schedule and placed the project against peer quartiles.
3. Bottom-up benchmarking (Level V) — decomposed the largest systems into components and cost drivers, adjusting for time, location, and specification.
4. Diagnose the gap to goal — quantified the variance, separating structural gaps (tie-back distance, seabed) from addressable ones (rig contracting).
5. Deliver executive recommendations — synthesized into an answer-first storyline and a focused pre-FEED agenda.

The Analysis

Peer-group benchmark by cost system

Project position vs. 27 peers across quartiles · Illustrative

So what: the cost story isn't uniform — facilities are competitive (2nd quartile); pipeline and drilling sit in the 4th quartile, so a blanket "cut everything" goal would waste effort on the parts that are already strong.

Peer landscape — cost vs. schedule

Bubble size ≈ resource (mmboe) · Illustrative

So what: the project carries higher unit cost than most peers without a faster schedule to offset it — putting the burden of the investment case on closing the cost gap.

Results

A 27-project peer benchmark where few ideal comparators existed; a clear Q2→Q4 verdict by cost system; the dominant lever isolated (rig rate, ~41% of D&C); and the rig-rate gap quantified at ~$0.8m per well. Most importantly, the work reframed the pre-FEED decision from "cut costs everywhere" to a focused, evidence-backed to-goal agenda.

Illustrative & anonymized. Client identity withheld; figures and visuals are directional, reconstructed to demonstrate structure and method.