The success of any major capital project within the upstream sector is ultimately determined by the difference between revenue gained from selling the product to the market vs. the associated expenditure to design, build, and operate the field development project. The complete paper provides insight into existing tools, methodologies, and processes that can help any capital project or organization improve their predictability of outcomes while effectively mitigating risks and exploiting opportunities.
Objective
The ultimate purpose of performing an integrated cost and schedule risk analysis (iCSRA) is to maximize predictability while minimizing unexpected late surprises. The process highlights key risk and uncertainty drivers, ensuring that resources are allocated to the most critical and effective risk-mitigation measures, thereby maximizing the project’s chance of success.
The iCSRA process also can help optimize contracting strategies by determining which party is best-suited to manage specific risks and whether contractual risk-sharing mechanisms should be implemented for uncontrollable market forces.
Theory and Definitions
The application of iCSRA should be tailored to both the project’s characteristics and its maturation stage.
