This article applies formal system engineering methods in early‐phase concept studies in the subsea oil and gas industry to identify early‐phase needs, and reduce late‐phase design changes. The oil industry is changing, demanding more cost efficient, flexible, and modularized systems. In order to improve their offering, suppliers within this industry are turning towards the systems engineering domain. To better understand the problem, we investigated the engineering processes at the supplier, went into details of technical project reports, and interviewed main stakeholders at the supplier. Based on our research we propose to adjust the early phase of the project execution process for the company, and adapt to a system engineering framework. At an early stage we recommend using unformal models to communicate decisions and to set up a foundation for applying more formal models in the later phases. A case study from field development illustrates the new process and methods. Some of these systems engineering methods have already been adopted in the company to improve the front‐end engineering studies.