Virtually all operators screen potential development projects using a gated process. Definitions vary but these processes generally follow a similar structure:
During stage 2 to stage 4 the number of different development options reduces steadily until finally the optimum concept is chosen and designed. During this process the impact on potential value is greatest during the early stages while the committed investment rises with time. For a typical modest offshore development the first few stages represent an investment of a few hundred thousand dollars whereas the validation and FEED stage run into the millions. Paradoxically a wrong decision during the early stages can impact the project value by hundreds of millions of dollars, whereas a wrong decision during the latter stages is generally easily rectified and would impact the project value much less.
And yet the concept screening part of major projects is frequently done poorly; potential options are overlooked, commercial risk is not sufficiently quantified or options are discarded for the wrong reasons. Reasons for this vary but big organisations are generally not structured for the mindset required to adjust the accuracy of the analysis to that required by the accuracy of the decision. Smaller operators frequently do not have sufficient in house expertise. As a result of this many developments end up with a suboptimal design, if only because the definition of optimum was never specified.
The Ingen engineers specialise in the early stages of the decision process. Our multidisciplinary teams will screen all development options which are technically feasible and model the associated cost and revenue streams using our in house integrated asset modelling software. This approach will take into account;
and allows different concepts to be ranked according to ranking criteria supplied by the client. Once the number of potential development concepts has been reduced to single digits these can then be risked using Monte Carlo techniques to evaluate the commercial risk exposure of the different development concepts.
Through the use of our in house tools and wide range of previous project experience Ingen can significantly reduce the cost and time associated with the concept screening process and guarantee that the screening process adheres to the ranking criteria as supplied by the client.
We can either provide this service as part of the generic gated process of a client or as a quality assurance exercise on the work done by the clients team. Historically Ingen has also supplied its screening services to potential investors as part of their due diligence