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Eight Crucial Levers for Effective Large-Capex Project Management

Projects involving large capital expenditures, such as the development of oil or natural-gas fields, power plants, and metal-ore mines, have become significantly more challenging in recent years. Demographic shifts and the industrialization of large developing economies have led to greater demand for energy and raw materials, and for increased production.

These resources are increasingly sourced from less accessible parts of the world, often in emerging markets, where business operations face unique challenges. In addition, promising markets attract multiple competitors, further raising development costs at a time when credit is less available than in the past. Dramatic swings in commodity prices also affect the economics of large-project development.

Here are eight rules to follow for effective large-capex project management:

Minimize Capital Expenditure Requirements

Design to Value

Apply Rigorous Risk Management

Develop a Procurement Excellence Program

Optimize Contracting Strategies

Secure Scarce Resources and Local Content

Ensure Excellence in Construction

Set Up a Project Management Office

Metals & Mining
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