Cost Overrun at the Norwegian Continental Shelf: The Element of Surprise

Arbeitspapier

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.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 5886

Classification and Topics

• Classification: Wirtschaft ; Model Construction and Estimation ; Firm Behavior: Empirical Analysis ; Multiple or Simultaneous Equation Models: Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
• Subject: cost overrun ; cost estimation ; estimation error

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Oglend, Atle ; Osmundsen, Petter ; Lorentzen, Sindre
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2016

Further information

• Handle: http://hdl.handle.net/10419/141863
• Last update: 10.03.2025, 11:44 AM CET