What is ISO 15663 about?
ISO 15663 is about 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. ISO 15663 covers facilities and associated activities within different business categories (upstream, midstream, downstream, and petrochemical).
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. ISO 15663 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.
Note 1: ISO 15663 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.
Note 2: 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.
Who is ISO 15663 for?
ISO 15663 on life cycle costing of Petroleum, petrochemical, and natural gas industries is beneficial for:
- Petrol engineers, drilling engineers, energy engineers, chemical engineers, mechanical engineers, and mining engineers
- Engineering geologists
- Geochemists and geophysicists
- Hydrographic surveyors
- Equipment operators and rig operators
- Pipeline technicians
- Oilfield service operators
Why should you use ISO 15663?
Life cycle costing is the systematic consideration of costs and revenues associated with alternative options required to fulfil the objectives of the business. Life cycle costing is an iterative process of planning, estimating, and monitoring costs and revenue differences throughout an asset's life.
The petroleum, petrochemical and natural gas industries have historically assessed the financial viability of project options based on minimum capital expenditure and achieving project schedule, whilst operating expenditures and lost revenue have received less focus in the decision-making process.
Cost management within the petroleum, petrochemical, and natural gas industries is important and will benefit the user from the adoption of a common and consistent approach to life cycle costing. ISO 15663 is useful as it supports the decision-making process by evaluating alternative options and performing trade-off studies.
While the largest benefits are typically achieved in the early life cycle phases, ISO 15663 is equally applicable to all life cycle phases and at many levels of detail. 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.
Life cycle costing is increasingly being applied by a variety of organizations within the industry.
Overall, ISO 15663 is helpful as it guides you with the process of life cycle costing. All participants in the process, be it the operators, contractors or vendors can have a substantial impact on the life cycle cost.