AS ISO 15663:2023 identically adopts ISO 15663:2021, which specifies requirements for and gives guidance on the application of life cycle costing to create value for the development activities and operations associated with drilling, exploitation, processing and transport of petroleum, petrochemical and natural gas resources. This document covers facilities and associated activities within different business categories (upstream, midstream, downstream and petrochemical)
Table of contents
Header
About this publication
Preface
Foreword
Introduction
1 Scope
2 Normative references
3 Terms, definitions and abbreviated terms
3.1 Terms and definitions
3.2 Abbreviated terms
4 Application
4.1 Users of this document
4.2 Framework conditions
4.3 Limitations
4.3.1 General
4.3.2 HSE considerations
4.3.3 Sustainability and climate change considerations
4.4 Benefits of life cycle costing
4.5 Life cycle costing within the life cycle phases
4.6 Life cycle costing subject matters
4.7 Technology development
5 Management of life cycle costing
5.1 General
5.2 Objectives for management of life cycle costing
5.3 Roles and responsibilities
5.4 Strategy and planning – life cycle costing management plan
5.4.1 Life cycle costing management plan
5.4.2 Life cycle costing process
5.5 Contractual strategies
5.6 Assessment and feedback
5.7 Training and competence
6 Methodology
6.1 General
6.2 Step 1 — Scoping
6.2.1 Objective
6.2.2 Define scope and measures
6.2.2.1 Identify objectives
6.2.2.2 Identify constraints
6.2.2.3 Establish economic evaluation measures
6.2.3 Identify potential options
6.2.4 Define options
6.3 Step 2 — Cost drivers and data collection
6.3.1 Objective
6.3.2 Identify potential cost drivers
6.3.3 Define cost elements
6.3.4 Identify and collect data
6.4 Step 3 — Modelling and analysis
6.4.1 Objective
6.4.2 Develop model
6.4.3 Analyse and assess
6.4.4 Consider uncertainties and sensitivities
6.5 Step 4 — Reporting and decision-making
6.5.1 Objective
6.5.2 Report and recommend
6.5.3 Decide and implement
6.5.4 Capture lessons learned
Annex A
A.1 Common guidance for life cycle costing planning and implementation
A.1.1 General
A.1.2 Life cycle costing management plan (LCCMP)
A.1.2.1 General
A.1.2.2 Terms of reference
A.1.2.3 Life cycle costing philosophy and business objectives
A.1.2.4 Project risk categorization
A.1.2.5 Organization and responsibilities
A.1.2.6 Activity description and schedule
A.1.2.7 References
A.1.3 Life cycle costing function
A.1.3.1 General
A.1.3.2 Life cycle costing function in the project
A.1.3.2.1 General
A.1.3.2.2 Developing and planning the project life cycle costing strategy
A.1.3.2.3 Developing internal life cycle costing procedures
A.1.3.2.4 Facilitating and co-ordinating study activities
A.1.3.2.5 Responsible for handover and maintaining project continuity
A.1.3.3 Life cycle costing function skill set and background
A.1.3.4 Training and competence
A.1.4 Contractual issues
A.1.4.1 General
A.1.4.2 Prequalification
A.1.4.3 Tender documentation
A.1.4.4 Contract award
A.1.4.5 Alliances
A.1.5 Communication
A.1.5.1 The communication between participants
A.1.5.2 Responding to life cycle costing enquiries
A.1.5.3 Life cycle costing evaluation of vendors or subcontractors
A.2 Operator implementation issues
A.2.1 General
A.2.2 Commitment to life cycle costing
A.2.3 Life cycle costing — A business focal point
A.2.3.1 General
A.2.3.2 Defining the life cycle costing strategy
A.2.3.3 Providing continuity across life cycle phases
A.2.3.4 Knowledge and competence of life cycle costing
A.2.4 Risk — An operator’s perspective
A.2.5 The contractual framework — An operator’s perspective
A.2.5.1 General
A.2.5.2 Influencing the design
A.2.5.3 Contracting elements of operation and support
A.2.5.4 Contract administration
A.3 Contractor implementation issues
A.3.1 General
A.3.2 Developing and organizing a capability
A.3.3 Risk — A contractor’s perspective
A.4 Vendor implementation issues
A.4.1 General
A.4.2 Application of life cycle costing for the vendor
A.4.3 Profitability potential for vendors
A.4.4 Contracts – A vendor’s perspective
A.4.5 Vendor competence
A.4.5.1 Challenges
A.4.5.2 Training
Annex B
B.1 General
B.2 Appraise
B.2.1 Scope of work
B.2.2 Contributions
B.2.3 Life cycle costing activities
B.3 Select
B.3.1 Scope of work
B.3.2 Contributions
B.3.3 Life cycle costing activities
B.4 Define
B.4.1 Scope of work
B.4.2 Contributions
B.4.3 Life cycle costing activities
B.5 Execute
B.5.1 Scope of work
B.5.2 Contributions
B.5.3 Life cycle costing activities
B.6 Operate
B.6.1 Scope of work
B.6.2 Contributions
B.6.3 Life cycle costing activities
B.7 Abandon
B.7.1 Scope of work
B.7.2 Contributions
B.7.3 Life cycle costing activities
Annex C
C.1 General
C.2 CAPEX
C.2.1 General
C.2.2 Technical and operational basis
C.2.3 Decommissioning
C.2.4 DRILLEX
C.3 OPEX
C.3.1 General
C.3.2 Technical and operational basis
C.4 Revenue factors (REVENUES or LOSTREV)
C.4.1 General
C.4.2 Technical and operational basis
C.4.3 Production assurance and reliability management activities
C.5 Value engineering and function analysis
C.6 Life cycle costing and economic model
C.6.1 General
C.6.2 Discounting and other modelling aspects
C.6.2.1 Discounting
C.6.2.2 Discount rate
C.6.2.3 Life cycle costing evaluation levels and tools
C.6.2.4 Analysis and evaluation
C.6.3 Economic evaluation measures
C.6.3.1 General
C.6.3.2 Net present value
C.6.3.3 Life cycle cost
C.6.3.4 Internal rate of return
C.6.3.5 Profitability index
C.6.3.6 Payback period
C.6.3.7 Break-even volume
C.6.3.8 Break-even price
C.6.3.9 Capital efficiency index
C.7 Environmental aspects
C.8 Considerations for uncertainty and sensitivity analysis
Annex D
D.1 General
D.2 Data input framework
D.2.1 Technical and operational basis
D.2.2 Data related to cost elements and cost drivers
D.2.3 Information needs for cost breakdown structure
D.2.4 Identify data sources
D.3 Data collection and data storage
D.4 Data quality
D.4.1 General
D.4.2 Data qualification and data adjustment
D.5 Data uncertainty
D.5.1 General
D.5.2 Data uncertainty in conjunction with new technology
D.6 Communication regarding data for life cycle costing
Annex E
E.1 General
E.2 Life cycle costing methodology application
E.2.1 Case description and decision context
E.2.2 Scoping
E.2.3 Cost drivers and data collection
E.2.4 Modelling and analysis
E.2.5 Reporting and decision-making
E.3 Life cycle costing methodology application – obsolescence strategy
E.3.1 Case description and decision context
E.3.2 Scoping
E.3.3 Cost drivers and data collection
E.3.4 Modelling and analysis
E.3.5 Reporting and decision-making
E.4 Example on uncertainty considerations and sensitivity calculations
E.4.1 Case description and decision context
E.4.2 Scoping, modelling and analysis for uncertainties and sensitivities
