Triple EEE are well known for performance of Stage Gate reviews of capital projects in the Oil & Gas industry and the primary goal of the review process is to select the optimal solution based on the evidence and data at the time of the review. However when a fundamental parameter like the price of the product declines by 40% this represents an exceptional change in circumstances and argues for an interim review to reach decisions on future progress and plans for the project. Even though the most immediate impact to be assessed is financial for the project owner the project may depend on infrastructure to be provided by the country of operation.
Below are a sample of issues that may be addressed by a review and enable the company to consider options to mitigate and limit the impact of the fall in the oil price.
Each project is different and require specific consideration but the potential impact of the changed environment needs to be assessed and it is certain that risk on price is real and that will in future be priced into funding costs and expected rates of return.
Triple EEE has the capability and the resources to organise a stress test for our clients. Please do not hesitate to contact us to discuss any issues you may have, and we will revert with solutions and, or a full blown proposal.