Life cycle costing in the Oil & gas and Energy industries
ISO 15663 Petroleum, petrochemical and natural gas industries — Life cycle costing contains requirements and guidance on how to apply life cycle costing methodologies to provide decision support for selection between alternative competing options and strengthen the industry cost management for business value creation.
Cost management in the oil & gas and energy industries is important and will benefit from the adoption of a common and consistent approach to life cycle costing. ISO 15663 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. The standard covers facilities and associated activities within different business categories like upstream, midstream, downstream and petrochemical.
The life cycle costing process as described in ISO 15663 is applicable when making decisions between competing options that are differentiated by cost and/or economic value. This document is not concerned with decision-making related to the economic performance of individual options or options differentiated by factors other than cost or economic value.
Guidance is provided on the management methodology and application of life cycle costing in support of decision-making across life cycle phases. The extent of planning and management depends on the magnitude of the costs involved, the potential value that can be created and the life cycle phase. It also provides the means of identifying cost drivers and provides a cost-control framework for these cost drivers, allowing effective cost control and optimization over the entire life of an asset.
The standard can be purchased as ISO 15663, but it is substantially more affordable to obtain the version that is adapted as European and Norwegian Standard.