Identification of Management Processes That Impact Capital Efficiency on Downstream and Chemical Projects

For companies trying to evaluate their capital deployment and return on investment, an important performance metric is capital efficiency. When defining and assessing capital efficiency, though, researchers face a common challenge-how to do so in a consistent way. Capital projects in the downstream and chemicals sector require significant capital expenditures to develop. The revenue generated from these projects is directly impacted by how they operate. In other words, the development of a project and its subsequent operation have an impact on the efficiency of the capital invested. Thus, it is important to address and improve capital efficiency at the project level. Researchers in this study reviewed the literature and interviewed industry professionals to explore how their organizations define and assess capital efficiency. The research team used a focus group to develop a pathway to identify management processes that, if implemented effectively, lead to efficient capital deployment in downstream and chemical projects.