Offshore Oil & Gas

A broad range of cost risks

Cost Engineering is experienced in working for the offshore industry. As an industry which faces a very broad range of cost risks, the offshore industry benefits greatly from a thorough approach to its cost engineering.

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High estimate accuracy

In the offshore industry, the location has a major impact on the total project costs. For that reason, Cost Engineering establishes the project’s standard conditions (e.g. location, productivity, rates, etc.) and applies custom factors where needed to not only ensure high estimate accuracy, but also the ability to trace back sources of costs.

Risk assessment

Cost Engineering realizes that offshore oil & gas projects often face significant investment risks. Therefore, a Capex uncertainty analysis will be executed for the appropriate phases. This analysis will be executed with a Risk Software Program @Risk based on the Monte Carlo simulation to determine the contingency to derive the cost estimate confidence level. This risk assessment will be based on the identified project risks.

Well-head and production platform

One of the projects Cost Engineering has worked on was a conceptual design and layout for a well-head and production platform which was defined from a zero base level. It was meant for a field approximately 12 km off shore which contains 36 API degree oil and associated gas. The export route is through an existing offshore complex located to the north-west of the platform. Because of the requirements for downhole ESPs, dry trees have been selected for all production wells in this field to facilitate access and work over. The water depth at the field is 20 meters (LAT).

The designs in this project are for one well-head and one bridge linked production platform. Due to drilling constraints the well-head platform is required in 2010 and the production platform is to achieve first oil in 2011.

For this project Cost Engineering was asked to:

Establish a weight estimate based on the preliminary info available at the end of the FEED phase.
Establish two cost estimates. One with an accuracy of ±30% and a second one with accuracy of ±15% both including construction and installation.
Develop the cost estimate for the platforms up to a certain level of reliability in order to make a validated assessment of the total investment cost.

Cost Estimate Data

Other estimating projects we delivered to offshore clients include the development of cost estimate data (FPSO, Pipeline, Subsurface) for Inpex and long-term offshore cost estimating support for NAM/Shell.

Certified Specialists

A number of clients use Cost Engineering to monitor and index their contract rates on a yearly basis. Others ask Cost Engineering to supply knowledge to their organization. In the recent past that has meant that we supplied three cost control specialists to an international organization.

In another example Cost Engineering provided a certified cost engineer to the daily maintenance organization for a refinery. During our presence new contracts were initiated, work processes streamlined and cost were reduced by introducing new ways for working with cost engineering tools.