What an owner's engineer does, and when you need one

You are about to commit serious capital to an oil and gas field, a geothermal project or a CO2 storage site, and almost every expert advising you earns more when you spend more. The contractor is paid for the work, the supplier for the equipment, the seller for the price. An owner's engineer is the exception: a technical team on your side of the table, paid only by you, with nothing to gain from any answer except the one that protects your asset.

What is an owner's engineer?

An owner's engineer is an independent engineering adviser hired by the owner of an energy asset (an operator, a developer, an investor) to represent the owner's technical and commercial interests, from the first idea to operation. It is a role, not a type of company: one senior specialist for a single decision, or a small team that stays for the life of a project.

The important word is owner. You already know the contractor's and the supplier's engineers work for their employers. The one owners tend to miss is the lender's: a bank financing the project often hires an independent engineer, and that engineer protects the loan, not your return. All of them are useful. None of them works for you.

Since 2015, we have worked as owner's engineer across oil and gas, deep geothermal and CO2 geological storage. The technology changes from one industry to the next. The seat at the table does not.

What does an owner's engineer do at each stage of a project?

Every stage asks the same question: is this in the owner's interest, and what could go wrong?

• Before the investment decision. Frame the problem, test the options and build a cost and schedule you can plan with. This is where our front-end engineering and FEED studies sit, because changing a plan on paper is cheap and changing a well that is already drilled is not.
• Choosing who will build it. Write a scope contractors can price, compare bids on the same basis, spot the low offer that will return as change orders, and make the contract say plainly who carries which risk. Our tendering and contracting work sits here.
• During execution. Review the contractor's key plans, track progress, check the work against the contract and the standards it names (NORSOK, ISO or API, depending on where you operate), and test every change request: is this new work, or something you already paid for?
• At handover and in operation. Confirm you received what you paid for, with open items closed before the final payment. Later, the same role helps you run the asset more efficiently and, at the end, plan and contract its decommissioning so the final bill holds no surprises.
• When an asset changes hands. A buyer inherits the wells, the equipment and the liabilities along with the production. Independent technical due diligence gives you a view of the asset that does not come from the seller.

Without the people in-house, an owner's engineer can also take the project management seat on your side, running the project day to day while decisions stay with you. Our six published engagements show the role at different points in an asset's life, from “Mature-field acquisition, de-risked” to “Subsea decommissioning, contracted without surprises”.

What an owner's engineer does not do

The limits of the role are the quickest way to spot an adviser who is not on your side.

• It does not build. It does not drill wells, install equipment or carry construction risk. That stays with the contractor.
• It does not sell. No equipment, no rigs, no vessels, and no commission from anyone it recommends.
• It does not duplicate the contractor's work. It reviews, challenges and verifies, while the contractor stays responsible for its own design. You do not pay twice for the same engineering.
• It does not replace your authority. You get a clear recommendation and the reasons behind it. Where you delegate a decision, it is taken within limits you set.

If the only people checking the work are the people paid to do it, nobody is checking the work.

When do you need an owner's engineer?

The warning signs are usually commercial before they are technical:

• The project is bigger than anything your team has delivered, or new to it: a first deep geothermal well, a first CO2 injection site, a first subsea development.
• Your team has the decision-makers but not the specialists to challenge a well design, a subsea installation plan or a drilling contractor's performance.
• You are about to sign something that is hard to undo: an investment decision, a major contract, an acquisition.
• Progress reports say the project is on track, yet the milestones keep moving.
• A board, partner, investor or regulator asks who checked the numbers, and the honest answer is the contractor.

For geothermal and CO2 storage developers, the wells and the rock beneath them are often the biggest uncertainty in the plan: a well that delivers less heat than the business case assumed, or a storage site that takes longer to satisfy the regulator than the financing allows. It is also where in-house teams are thinnest. Two of our published cases, “Deep geothermal wells, delivered to standard” and “CO2 storage site, characterised and licensed”, come from exactly this ground. For an investor or a fund, the exposure usually sits in what the data room does not say.

When should you bring one in, and is it worth the fee?

Earlier than feels necessary. Your ability to change a project's cost is highest before anything is committed, and it shrinks with every contract signed and every well started. Overruns are common in large capital projects, and many trace back to scope, cost and schedule that were poorly defined at the start. That early definition is where an independent challenge does the most good.

The fee is real and worth weighing. The return rarely appears as a line item: it shows up as a flawed development plan corrected before the final investment decision, a cheap-looking bid turned down, a change order refused because it was not owed, or a liability priced into an acquisition instead of discovered after it. One decision like that can outweigh the whole engagement. Nor do you have to commit to the whole project: engage an owner's engineer for one decision, one tender or one due diligence, and keep it only if it earns its place.

What should you ask before hiring one?

• Who else pays them? Ask about commercial ties to the contractors and suppliers they would check. The answer should be short.
• Who will actually do the work? The senior people in the proposal should be the people on your project. Our projects stay with the senior partner who scoped them, with no bench of juniors behind.
• Have they worked on assets like yours? Wells, the rock they reach and equipment on the seabed carry different risks from surface plants. Look for experience where your money is most exposed. Ours is in exactly those areas: geosciences, drilling and well, and subsea engineering, on the owner's side.
• How will bad news reach you? Red flags should come as they are found, in plain language, not in a final report.
• Where does the scope end? A good owner's engineer agrees up front what is in scope and the points where you decide whether to continue. When the problem changes, it tells you, and the scope changes openly.

If you are weighing a project, a contract or an acquisition and want a technical view that answers only to you, tell us what you are facing. We have offices in Brazil, Norway, Switzerland, Singapore and Australia, and we answer every enquiry within 24 hours.