Competitive scoping
First, the scoping of a project. The design and technical specification of a project should – first and foremost – be aimed at assuring a minimum acceptable performance. No more, no less – at least to begin with.

For example, with Shell’s Stones Deepwater project in the Gulf of Mexico, we fundamentally redesigned our wells using practices developed in our onshore unconventionals business. In the process, we reduced the planned capital cost of the wells by more than 30 percent, as we used less materials, reduced installation costs and also reduced overall delivery risk given these wells are now much simpler to drill and complete.

In future more truly standard and “off the shelf” components will have to be used. In Shell’s case, for example, greater standardisation and simplification of the wells connected to the Mars and Ursa offshore platforms in the Gulf of Mexico was responsible for $95 million savings in 2015.

Scope changes to give a project greater value – say, by increasing its throughput – or to give it greater robustness against risks – say, by increasing its operational flexibility – must only be accepted with full transparency of their cost and value tradeoff. But above all, the project must be kept competitive vis-à-vis comparable projects. That’s why we call this ‘competitive scoping.’