Building a Sustainable Life Cycle Cost Efficiency Model

Abstract

Abstract Life cycle cost (LCC) evaluation has been a powerful decision-making support tool for assessing different alternatives throughout an asset's life cycle. After having been ushered in by the global awakening of a sustainability conscience, there is a need to upgrade the LCC calculation to include these sustainability factors. This train of thought has also been acknowledged by the oil and gas industry, through the recent update of the ISO 15663:2021 (International Organization for Standardization), which addressed sustainability, in conjunction with other ISO standards, guides and the IOGP (International Association of Oil & Gas Producers) report. Following this trend, the paper aims to present a sustainable LCC efficiency model for oil and gas facilities, particularly in the selection of the optimum equipment or package. To achieve this, the paper drilled down possible cost factors related to these concerns and offers a model that is required to remain relevant in the current conditions. The LCC model presented was developed through a systematic research method, including trials, feedback loops and validation processes. Potential production risks were also factored in, so that the LCC would deliver the best possible value to the business. Finally, a step-by-step process in developing the LCC structure will be illustrated and explained in the paper.