Design to Value for Oil and Gas Development

Abstrak

The prediction of low oil price for long time has created many projects unrealized due to economically unfeasible. As oil price is relatively stable in the range of $60 - $70 a barrel throughout the rest of this year and next, Design to Value concept would satisfy the needs for cost estimate to drive the scope required for projects to be economically viable. In many oil and gas companies, project development will have to follow stage gate process starting from defining opportunities, development of conceptual options, and select preferred option till final investment decision. By using this approach, the Life Cycle Cost is set for any particular Front End Loading stages.
Driving behind this new method is expediting the project framing and front end engineering process as well as maintaining company's growth within available budget. Project design to value is determined based on deep understanding of value drivers, technical and cost benchmarks, and implementation of fit for purpose as compared to other oil and gas company's best practices. Cost Benchmarking analysis is used to set target of each cost elements which depending on the selected concept development. Features will be given to each Best in Class elements to any particular design to achieve low cost concept. Work Breakdown Structure is correlated with the evolution of scope definition as per stage gate process. As reservoir definition is matured, wells and facility design are progressing to a better scope of work for project execution.