Developing A Model To Suit Life Cycle Costing Analysis For Assets In The Oil and Gas Industry

Vorarat, Suparatchai; Al-Hajj, Assem

doi:10.2118/87028-ms

Cited by 6 publications

(4 citation statements)

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“…The primary equipment and machinery used in various sectors of oil and gas industry include tank vessels, heat exchangers, cranes and lifting machines, boilers, furnaces, compressors, oil and gas rotating equipment, and pressure vessels. The drilling of the oil and gas well involves up to 30 different service companies, thus requiring a common protocol that allows such companies to share real-time data in a secure and trusted way [56], [57], [58], [59]. E&P companies procure equipment from reputed manufacturers when the demand for oil and gas equipment suddenly surges due to local inventory shortage.…”

Section: Management Of Oil and Gas Assets Life-cyclementioning

confidence: 99%

Blockchain in oil and gas industry: Applications, challenges, and future trends

Ahmad

Jayaraman

Yaqoob

et al. 2022

Technology in Society

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Section: Management Of Oil and Gas Assets Life-cyclementioning

confidence: 99%

Blockchain in oil and gas industry: Applications, challenges, and future trends

Ahmad

Jayaraman

Yaqoob

et al. 2022

Technology in Society

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“…Without using high quality data, the results of decision-making may lead to inaccurate conclusions. In a study, Vorarat et al (2004) discussed the data requirements for LCC analysis of oil and gas field projects. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 16 Generally, the use of survey methods (including questionnaires, face-to-face or telephone interviews, or a combination of these) to obtain experts' judgement and knowledge is one of common data collection techniques in the oil and gas sector .…”

Section: Distribution Of Studies Based On Data Collection Techniquesmentioning

confidence: 99%

Decision support methods and applications in the upstream oil and gas sector

Shafiee

Animah

Alkali

et al. 2019

Journal of Petroleum Science and Engineering

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Decision-making support (DMS) methods are widely used for technical, economic, social and environmental assessments within different energy sectors, including upstream oil and gas, refining and distribution, petrochemical, power generation, nuclear power, solar, biofuels, and wind. The main aim of this paper is to present a comprehensive literature review and classification framework for the latest scholarly research on the application of DMS methods in the upstream oil and gas industry. To achieve this aim, a systematic review is conducted on the current state-of-the-art and future perspectives of various DMS methods applied to different upstream operations (such as exploration, development and production) which take place prior to shipping of crude oil and natural gas to the refineries for processing. Journal and conference proceeding sources that contain literature on the subject are identified, and based on a set of inclusion criteria the related papers are selected and reviewed carefully. A framework is then proposed to classify the literature according to the year and source of publications, type of fossil fuel sources, oil and gas field's lifecycle phases, data collection techniques, decision-making methods, and geographical distribution and location of case studies. The proposed literature classification and content analysis can help upstream oil and gas industry stakeholders such as field owners, asset managers, service providers, policy makers, environmentalist, financial analyst, and regulatory agencies to gain better insight about their business activities with well-informed decision-making processes. AbstractDecision-making support (DMS) methods are widely used for technical, economic, social and environmental assessments within different energy sectors, including upstream oil and gas, refining and distribution, petrochemical, power generation, nuclear power, solar, biofuels, and wind. The main aim of this paper is to present a comprehensive literature review and classification framework for the latest scholarly research on the application of DMS methods in the upstream oil and gas industry. To achieve this aim, a systematic review is conducted on the current state-of-the-art and future perspectives of various DMS methods applied to different upstream operations (such as exploration, development and production) which take place prior to shipping of crude oil and natural gas to the refineries for processing. Journal and conference proceeding sources that contain literature on the subject are identified, and based on a set of inclusion criteria the related papers are selected and reviewed carefully. A framework is then proposed to classify the literature according to the year and source of publications, type of fossil fuel sources, oil and gas field's lifecycle phases, data collection techniques, decision-making methods, and geographical distribution and location of case studies. The proposed literature classification and content analysis can help upstream oil and gas industry stakeholders such as fiel...

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“…Iwawaki et al (2002) introduced an activity-based LCC methodology to support the decision-making process for facility management including inspection and maintenance work executions in refinery industry. Vorarat et al (2004) provided a structural breakdown of cost (SBC) and developed an LCC technique for evaluating and comparing the costs associated with installation of new offshore structures. The model was applied to a water injection pump case study using data stored in SAP (System Application and Product in Data Processing).…”

Section: Life-cycle Costing (Lcc) In the Offshore Oil And Gas Industrymentioning

confidence: 99%

Selection of the most suitable life extension strategy for ageing offshore assets using a life-cycle cost-benefit analysis approach

Animah

Shafiee

Simms

et al. 2018

JQME

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Purpose A substantial number of production assets in the offshore oil and gas industry are facing operation beyond their anticipated design life, thus necessitating a service life extension program in the future. Selection of the most suitable strategy among a wide range of potential options to extend the lifetime of equipment (e.g. re-using, reconditioning, remanufacturing, refurbishing and adding on safety/process control measures) remains a challenging task that involves several technical, economic and organizational complexities. In order to tackle this challenge, it is crucial to develop analytical tools and methods capable of evaluating and prioritizing end-of-life strategies with respect to their associated costs and quantifiable benefits. The paper aims to discuss these issues. Design/methodology/approach This paper presents a life-cycle cost-benefit analysis approach to identify the most suitable life extension strategy for ageing offshore assets by taking into account all the capital, installation, operational, maintenance and risk expenditures during the extended phase of operation. The potential of the proposed methodology is demonstrated through a case study involving a three-phase separator vessel which was constructed in the mid-1970s. Findings The results from the application case indicate that the capital expenditure (CapEx) accounts for the largest portion of life cycle cost for the replacement strategy, while risk expenditure (RiskEx) is the major contributor to costs associated with life extension. A sensitivity analysis is also conducted to identify factors having the greatest impact on the optimum life extension solution, including oil price, production rate and money interest rate. Practical implications In the past, the decisions about life extension or replacement of in-service equipment were often made in a qualitative way based on experience and judgment of engineers and inspectors. This study presents a “quantitative” framework to evaluate and compare the costs, benefits and risks associated with life extension strategies and subsequently to select the best strategy based on benefit/cost ratios. Originality/value To the best of authors’ knowledge, no studies before have applied life cycle assessment and cost-benefit analysis methods to prioritize the potential life extension strategies in the oil and gas industry sector. The proposed approach not only assists decision makers in selecting the most suitable life extension strategy but also helps duty holders reduce the costs corresponding to life extension execution.

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Developing A Model To Suit Life Cycle Costing Analysis For Assets In The Oil and Gas Industry

Cited by 6 publications

References 0 publications

Blockchain in oil and gas industry: Applications, challenges, and future trends

Blockchain in oil and gas industry: Applications, challenges, and future trends

Decision support methods and applications in the upstream oil and gas sector

Selection of the most suitable life extension strategy for ageing offshore assets using a life-cycle cost-benefit analysis approach

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