Over the lifetime of a project OPEX exceeds
the initial capital expenditure (CAPEX). The project is such developed which
satisfies-
a)
Quality
b)
Cost
c)
Safety
d)
Environmental issues
Generally when a company starts an oil and gas project, it has following
objectives-
1.
Maximizing economic recovery of
the hydrocarbon
2.
Ensuring that agreed quantity
and quality of hydrocarbon reaches the customer
3.
Ensure maximum uptime for
facilities
4.
Minimizing man power specially
offshore
5.
Maximizing automation in order
to have better control over operations
6.
Providing safe environment for
working
7.
Incorporating environment and
social responsibilities.
8.
Knowing the legal, fiscal system
of the region.
The company keeping in mind these
objectives draws a plan of work which may include outsourcing. The decision of outsourcing
is based on following facts-
1.
The service offered by
contractor can be availed with less cost and more efficiency
2.
The service required are
specialist in nature and is unavailable within the company
3.
Services are required for short
duration only rather than permanent staffing.
The environmental laws for the region where
the company is operating is very important. For example flaring and venting of
gas is allowed in some place but prohibited in others. Venting is much more dangerous
as it releases CH4 which is 20 times worse
green house gas than carbon dioxide. Thus, it is prudent to adapt high
safety and environment measures in the beginning of the project itself so as to
save oneself from future stricter laws.
For maintaining the technical integrity of
the plant, the company has to decide on maintenance strategy for the equipment.
Its Repair Vs Replacement strategy. This is actually a tradeoff between
OPEX and CAPEX. If the company wants
they can spend high on CAPEX and buy machines which require low maintenance or
a company can buy a cheap machine and decide to spend high OPEX. Either way the
criticality of the equipment is very important. Where the machine is placed in
your supply chain is very important. The location of certain machine (bottle
necks) is more important than others
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