Scandinavian Working Papers in Economics

UiS Working Papers in Economics and Finance,
University of Stavanger

No 2016/3: Cost Overrun at the Norwegian Continental Shelf: The element of surprise

Atle Øglend (), Petter Osmundsen () and Sindre Lorentzen
Additional contact information
Atle Øglend: uiS, Postal: University of Stavanger, NO-4036 Stavanger, Norway
Petter Osmundsen: UiS, Postal: University of Stavanger, NO-4036 Stavanger, Norway
Sindre Lorentzen: UiS, Postal: University of Stavanger, NO-4036 Stavanger, Norway

Abstract: We examine drivers of cost overruns in Norwegian development projects in the oil and gas sector. The multivariate longitudinal econometric analysis employs a unique and detailed dataset consisting of 80 different projects between 2000 and 2015. Among the significant results, we find that the unexpected change in economic activity has a positive effect on the overruns; there is a considerable positive momentum in the transitional cost overruns; more experienced operators tend to incur less overruns; finally, that the size of the investment of the projects has a positive impact on the overruns. Further, we find evidence that the current economic activity matters to an extent, but it is the unexpected change in activity that is the pivotal factor.

Keywords: Cost overrun; cost estimation; estimation error

JEL-codes: C31; C51; D22

38 pages, May 2, 2016

Full text files 

uis_wps_2016_03_ogland_osmundsen_lorentzen.pdf PDF-file

Download statistics

Questions (including download problems) about the papers in this series should be directed to Bernt Arne Odegaard ()
Report other problems with accessing this service to Sune Karlsson ().

RePEc:hhs:stavef:2016_003This page generated on 2024-09-13 22:17:13.