IHS CERA Capital Cost Analysis Forum - Upstream
The IHS CERA Capital Costs Analysis Forum—Upstream Advisory Service was designed to give clients the knowledge needed to prosper in the fast-changing upstream environment.
IHS CERA Capital Costs Analysis Forum - Upstream service responds to the needs of upstream industry clients who seek to control capital costs in the current and foreseeable era of rising project expenditures. The forum mainly serves to determine upstream project development costs through the application of an Upstream Capital Cost Index (UCCI) designed to capture the precipitating elements behind the modern cost environment. The UCCI tracks the purchase price for a representative set of project portfolios and calculates weighted values for various inputs that have caused upstream project costs to skyrocket in recent years. The indices account for such factors as:
- Engineering, procurement and construction labor scarcity
- Number of current well projects
- Rig rates
- Raw materials supply - availability of premium steel, cement, copper and diesel fuel
- Competition with downstream industry for resources
Armed with this knowledge, clients can achieve a clearer picture of how specific inputs affect total portfolio costs. IHS CERA analysts can use the UCCI to show how certain costs are interrelated and where savings can occur to offset increased fees. Forum members are privy to comprehensive cost data, including an analysis of the key drivers behind rising costs, regional cost comparisons and long-term forecasts.
Subscribers to this service receive:
- Quarterly reports
- IHS CERA website access
- Telephone and email access to research staff
Who uses the service? How? The forum is open to producing firms only Use as a tool to benchmark internal project costs and project future costs via scenario
Forum membership provides companies with unique, timely insights concerning project costs, trends and outlooks and the strategic implications associated with changes in the global cost environment. Through building on and monitoring a set of indicators that reflect the critical issues in upstream project development, this Advisory Service helps Forum members to develop strategic responses to issues such as:
- How do investment costs vary by region? What is driving escalation in hot activity areas?
- What approaches can be used to minimize the impact on project costs?
- How does demand for goods and service vary by region, and what is the impact on regional project costs?
- Which development concepts (i.e., platform; tension leg platform; floating production, storage and offloading vessels and others) are most or least affected by specific drivers and trends?
- How do individual market movements affect total project costs? What market will most affect your project during construction?
- What is the optimal timing for project commencement to minimize investments and give best investment returns?
- What strategies can be employed to reduce project costs?