Page 597 - Marine Structural Design

Chapter 32 Economic Risk Assessment for Field Development 573

- Topsides
- Substructure
- Well/Riser system
- Export/Import system
- Project management and insurance
Drilling Costs
- Platform wells
- Pre-drilling
Operation and Maintenance Costs
- Personnel and catering
- Well maintenance
- Logistics
- Land organization and insurance
Costs of Facilities and Drilling
The costs associated with facilities mainly occur in the platform design, construction, and
installation phases. Each cost center has a base value Bi and several influencing cost variables.
For example, the cost of template material is a product of the template weight and the cost of
template material per unit weight. In order to establish the uncertainties in the cost variables,
the analysts are to assess factors and multiply the best estimates to give the lo%, 25%, 50%,
75%, and 90% fractile of the variables. The lognormal distribution is thus used for all cost
variables and the distribution parameters are then determined by a least-square fit of the
distribution to the data points.
Some cost variables enter more than one cost center. As an example, it is likely that if the
amount of material exceeds the base estimate, then the number of man-hours spent to weld the
material will also exceed the base estimate. The correlation should be accounted for properly.
The correlation coefficients may be given based on an understanding of the interplay between
different cost variables and experience in the form of existing data. All costs are distributed
over time as a result of a scheduling program.
Costs of Operation and Maintenance
Additional costs occur for production, processing, and transportation during the production
phase as discussed earlier. These costs are divided into each product, e.g. oil, gas, and
liquefied natural gas (LNG).
32.3.2 Income Variable Modeling
The income variables are grouped into three categories as described below:
Reservoir size and production profiles
Oil and gas prices
Taxes, inflation and interest rates