Comprehensive Evaluation of Costs at the Early Stages of Project Development: Costs of Equipment not Included in the Construction Estimate

Abstract

This article describes the method developed by Gazprom Neft to evaluate capital expenses required to purchase the equipment not included in the construction estimate using the automatic calculation module. Work in this direction is to Gazprom Neft a relevant and logical continuation of the cost engineering development vector. Having a methodology and tool for calculating the costs of equipment not included in the construction estimate will optimize the decisions made by increasing the accuracy and substantiation of the CAPEX amount evaluated for the newly introduced and developed assets. The method of calculating the costs of equipment not included in the construction estimate includes itemized decomposition by well type and method of well operation. The full list of equipment is defined, the algorithms of equipment selection depending on the technological pre-requisites are described, the cause-and-effect relationships are established according to the principle "technical parameter x cost", an economical and mathematical mechanism is suggested. The tool for evaluating the costs of equipment not included in the construction estimate includes full automation of the calculation process in accordance with the methodological provisions as relates to the region under consideration where the asset is located. Engineering modules are integrated which calculate the frame size, capacity, length and other characteristics of equipment. The tool helps to perform calculations for both individual well types and in general in accordance with the fluid / oil / associated gas production / water injection.