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Cost Estimating

Estimating Tools / Systems

AACEI Class 4 and 5 estimates (screening and conceptual work) are performed using ADEPT, a specialist estimating tool developed in-house.

For Class 3 estimates, Genesis has an MTO (Material Take Off)/activity based estimating system for both onshore and offshore facilities.

Hybrid estimates are often performed using the MTO system, especially for brownfield conceptual work, in which the model makes factored estimates which can be replaced by MTO as engineering definition increases. For brownfield Class 5 estimates a high level tool based on Adept is used.

A separate MTO estimating tool is used for detailed subsea and pipeline estimates, which can also be used for Class 4 estimates.  

ADEPT (Area Development Evaluation Planning Tool)

All field developments feature a considerable number of unique issues which cannot be shoehorned into a standard mathematical or rule-based model. The tool used must be easily modified and expanded; an inflexible model will miss the subtleties between different options and sensitivities and produce an incorrect or misleading result. Genesis originally developed the Adept software to overcome the gap between the limitations of commercial models and the requirements of real fields. Commercial programs tend to be too rigid and simplified to model a real field with its unique problems, especially when comparing the project value of different concepts. They can produce good order of magnitude estimates, given the right input data, but they cannot capture all the subtleties of the differences between options. Adept is flexible and easily modified or augmented to ensure each option is modelled rigorously, and there are no discipline interfaces or ‘silos’.

ADEPT was developed to:

• Enable the rapid evaluation of a large number of development options;
• handle many interfaces between the different elements of a field development effectively;
• improve confidence in and consistency of the results;
• enable rapid and rigorous evaluation of sensitivities to a concept.

It comprises a number of linked calculation modules for drilling, substructures, subsea, topsides, pipelines, onshore terminals, onshore plants, onshore gathering systems, etc. and provides a single software model to perform the conceptual  design, cost estimating and economics for a project with multiple fields and complex architecture using rigorous equipment sizing, pipeline hydraulics & design, flow assurance, structures sizing, capex estimating, opex estimating, drillex, capex phasing, safety & environmental review, pre- and post tax/PSC economics.

ADEPT is most heavily utilised by Genesis during Field Development Planning.

Cost Risk

It is important to be able to quantify the potential sources of project value erosion and to validate estimates and guard against over-optimism and, to this end, Genesis regularly perform rigorous cost risk studies. In developing the stochastic cost estimates, the cost models often use the design & cost models from an Adept run as a starting point. These are combined with:

• a quantified register of project specific risks, developed from a risk workshop;
• standard models for uncertainty around parameters are based on the ranges in Genesis’s in-house cost databases;
• standard models for the causal links between parameters and commodity prices,

The specific risks include reservoir, well and production chemistry uncertainties with the consequent effect of each outcome built into the project model so all of the potential ensuing scenarios could be modelled properly. Other project specific parameters would typically include co-operation, organizational experience, host country opacity, security, infrastructure, etc.

Care is taken to ensure the causal links between different cost elements, and between the cost elements and underlying parameters, are modelled rigorously. Commodity prices, for example, cannot be decoupled from market demand, there is a very strong causal link and the resulting cost range would be implausibly small if this were not appreciated.