iso 19008: application and use of the standard cost coding

ISO 19008: Application and use of the Standard Cost Coding System within cost estimating,

experience data, benchmarking and analysis.

International ISO Standardization Seminar forthe reliability technology and cost area

NEN - Vlinderweg 6 - 2623 AX Delft29th March 2017

Presented by: Olav T.M. Theodorsen, MSc

Advisor Cost Estimation, Statoil ASA

What is ISO 19008?

• ISO 19008 issued in August 2016 – Developed by ISO/TC67/WG4

• ISO 19008 is an international standard that provides the provisions

for a standard cost coding system (SCCS) which shall be used for

classification of costs associated with the full-life cycle of oil and gas

production and processing facilities

ExplorationDevelopment

Projects

Production/

OperationRemoval

Ref. ISO 19008, Clause 1 2

How is ISO 19008 structured?

The ISO 19008 Standard is organized in:

Ref. ISO 19008, Clause 1

• A main document

• 3 normative Annexes containing each of the coding structures PBS,

SAB and COR with code, code name and definition (Excel files can be

found in the ISO Standards Maintenance Portal)

• One informative Annex containing examples of use (in Excel file):

Coding and mapping between SAB-COR, PBS-COR and SAB-PBS

3

What is a standard cost coding system

(SCCS)?

The Standard Cost Coding system (SCCS) is a

standard system for classification and coding of:

• Cost

• Activities (durations)

• Physical quantities (like weight, length, volume,

flow rate, power, etc.)


4

ISO 19008 applicability?

Local or specific cost rules Cost accounting and billing, local rules and fiscal regulations, ..

Specific breakdown structures

Project WBS, Asset Component TAG/System or Area/module …

Implement Cost system tools

Collecting cost (CAPEX and OPEX)


Estimating

• Estimated data

Monitoring• Actual data

Close-out• Final data

5

Who is ISO 19008 for?

ISO 19008 is intended for users such as:

• Owner

• OperatorCompanies

• Trade association

• Association for cost, ….Industry/Trade associations

• Manufacturers

• SuppliersContractors

• Service Contractors

• Tool Providers

Industry Services

• Regulatory AuthoritiesAuthorities


6

• Collect estimates and historical data

• Benchmarking and analysis independent from specific operations in assets or projects

Uniform data coding

• Classify cost and physical data

• Develop unit cost, metrics, KPI, …

Common industry basis

• Structure data collection

• Exchange data between different organizations

Common methodology

• Facilitate data exchange between different organizationsExchange of data

• Industry efforts to establish and responsible use of a common system, ref. current cost focus in the Industry

International standard

What benefits will ISO 19008 bring

to my business or organization?


7

How is ISO 19008 organized and where can

codes be found?

The ISO 19008 cost coding consists of 3 individual hierarchical

classification structures (facets) listed and described in 3 Annexes.

Ref. ISO 19008, Clause 4.2

8

PBS -Physical Breakdown StructureHierarchical breakdown

9

PBS code

Level 3 Code name

AAA Drilling area

AAB Wellhead and riser area

AABA Wellhead area

AABB Riser area

AAC Process and utilities

AAD Living quarter

AAE Helideck

AAF Flare

AAG Deck appurtenances

AAH Deck structure

PBS code

Level 3 Code name

BCA Civil

BCB Buildings

BCC Marine (Jetties and shore installations)

BCD Structures (piperacks, modules etc.)

PBS code

Level 1 Code name

A Offshore installations

B Onshore installations

PBS code

Level 2 Code name

AA Topsides

AB Substructures

AC Offshore Wells

AD Subsea system

AE Transport systems

AW Offshore wind park

PBS code

Level 2 Code name

BA Process, utilities and product handling

BC Civil, Structures, Marine and Buildings

BD Transport systems

BE Drilling facilities

BF Onshore wells

BG Temporary facilities

BH Infrastructure

Ref. ISO 19008, Annex A

SAB –Standard Activity BreakdownHierarchical breakdown

10

SAB code

Level 2 Code name

41 Onshore construction

42 Atshore construction

43 Inshore construction

44 Offshore construction

SAB code

Level 2 Code name

51 Land based installation

52 Marine operations

53 Logistics

SAB code

Level 3 Code name

211 Pre-execution engineering

212 Detail design engineering

213 Construction / fabrication / installation

engineering

214 Follow on engineering

SAB code

Level 1 Code name

1 Management

2 Engineering and procurement

3 Equipment and Bulk Supply

4 Construction

5 Installation, Transport and

Logistics

6 Other activities

7 General activities

8 Well Operations

SAB code

Level 2 Code name

21 Engineering

22 Procurement

SAB – phase prefix

E Exploration

A Appraisal

D Development

P Production

S Shutdown and decommissioning

R Removal

Ref. ISO 19008, Annex B

COR – Code Of ResourceHierarchical breakdown

11

COR code

Level 3 Code name

ERC Miscellaneous mechanical equipment

ERD Drivers and power transmissions

ERF Heaters, boilers, furnaces and flares

ERH Heat transfer equipment

ERK Compressors, blowers and expanders

ERM Material and product handling equipment

ERN Mechanical equipment – solids

ERP Pumps

ERT Storage tanks/containment equipment –

atmospheric

ERV Vessels and columns – pressurised

ERX Miscellaneous package units

COR code

Level 1 Code name

COR code Code name

A General costs

E Equipment

B Bulk materials

K Engineering personnel

R Engineering overheads

L Direct labour

M Indirect labour

C Construction overheads

H Company personnel

Q Company personnel overheads

S Unit work

X Marine operations and logistics

Y Land based plant and equipment

COR code

Level 2 Code name

EA Architectural equipment

ED Drilling equipment

EE Electrical equipment

EG Heating, ventilation and air conditioning

(HVAC) equipment

EJ Instrumentation equipment

ER Mechanical equipment

ES Safety/escape and firefighting equipment

ET Telecommunication equipment

EU Subsea equipment

EV Mooring and marine equipment

EY Transfer and control equipment

Ref. ISO 19008, Annex C

Note that ISO 14224 has another approach of splitting equipment into systems and categories, ref. Annex A.1.4.

WBS ID PROJECT WBS ITEM

DESCRIPTIONMUSD

11B01A10 DECK Electrical Fabrication 1.308

PBS PBS NAME SAB SAB NAME COR COR NAME

AACProcess and

utilities4142

Installation/assembly/

erectionLE Electrical direct labour

WBS Data

Input level

Project

WBS

structure

SCCS

Example of use of ISO 19008

in a project development phase


12

How can the ISO 19008 cover specific user needs?

• The PBS, SAB, COR may be extended by each individual

organization

• for example to code new facility type or

• to expand standard type with more detailed sub-types

• Additional perspectives/facets to the basic SCCS may

be included


Existing ISO 19008 codes

not to be changed

13

How data are reported, i.e. how

Contractor can report costs to the

Company?

Specify use of SCCS and

required level of detail

Report SCCS classified cost

at Company required level

of detail , aggregating

where necessary

CONTRACTORUse of SCCS

@ Contractor detail level

COMPANYUse of SCCS

@ Company detail level


14

Statoil’s application and use of the Standard Cost

Coding System within cost estimating, experience

data, benchmarking and analysis.

Is this much?

• Johan Sverdrup Process platform 2 000 mill. Euro

• Hyme Subsea project 200 mill. Euro

• Statpipe Gas Processing Plant 900 mill. Euro

2016-02-1716 Classification: Open

Project

Transfer of Experience data (cost, weight, man-hours, etc.)

Experience Database

(SCCS-->ISO 19008)

Project Control

Database

(WBS)

DG2 DG3 MCE0 CCE1 CCE2 CCEn As-built

Estimation

Experience group


http://www.google.no/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0CAcQjRw&url=http://sqlbak.com/blog/database-stuck-in-restoring-state/&ei=-1JcVeGlManFygPT_oGQDA&bvm=bv.93756505,d.bGQ&psig=AFQjCNGpLfpGblHwWeakmfihPfcFH8l5kw&ust=1432200309956243

http://www.google.no/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0CAcQjRw&url=http://sqlbak.com/blog/database-stuck-in-restoring-state/&ei=-1JcVeGlManFygPT_oGQDA&bvm=bv.93756505,d.bGQ&psig=AFQjCNGpLfpGblHwWeakmfihPfcFH8l5kw&ust=1432200309956243

Storage of experience data by Project and PBSExample: Gjøa development project


Quantitative data available in Database

• Project cost and quantities – at a detailed level

• Cost plan (investment profile)

• Currency shares from contracts

• Design data

• Overall quantities

(weights, man-hours, etc.)

• Main Schedules & milestones

• Progress curves

2015-06-0419 Classification: Internal

Benchmarking and analysis


What we try to avoid:

What we hope to achieve:

Where we usually end up:

Statoil’s Benchmarking Hierarchy

(Level 1 - 3)

$/boe

Metrics by

facility category

Component cost

at SAB / discipline level

Business

case cost

efficiency

Concept

cost

efficiency

Key

cost

drivers

LEVEL 1

LEVEL 2

LEVEL 3


Benchmarks - Level 1CAPEX/boed vs. Recoverable reserve (Mboe)

(Stand alone vs. Subsea tie-back field development)


Stand-alone Field development

Subsea tie-back Field development

Benchmark Level 2 – Topside cost vs. weight

All platforms, All regions


Benchmark Level 2 - Topside cost vs. weightSemi platforms – Norwegian Continental Shelf (NCS)


Benchmarks – Level 3Norms & Rates - Input to Estimation tools

• Norms (Manhours / tonnes)

− Engineering (by discipline)

− Onshore/Atshore Construction (by discipline)

− Offshore Construction (by discipline)

• Material rates (NOK/kg, NOK/m, etc.)

− Equipment (by system / COR / package)

− Bulk (by discipline)

• Manhour rates (NOK / Manhour)

− Engineering

− Onshore/Atshore Construction

− Offshore Construction

− Company Management

− Project Completion

• Other Norms and rates

− Detailed Piping norms and rates (by category, matr. quality & dimension)

− Marine Operations (day rates per vessel)


This presentation, including the contents and arrangement of the contents of each individual page or the collection of the pages, are owned by Statoil. Copyright to all material including, but

not limited to, written material, photographs, drawings, images, tables and data remains the property of Statoil. All rights reserved. Any other kind of use, reproduction, translation, adaption,

arrangement, any other alteration, distribution or storage of this presentation, in whole or in part, without the prior written permission of Statoil is prohibited. The information contained in this

presentation may not be accurate, up to date or applicable to the circumstances of any particular case, despite our efforts. Statoil cannot accept any liability for any inaccuracies or omissions.

ISO 19008: Application and use of the

Standard Cost Coding System within

cost estimating, experience data,

benchmarking and analysis.

Presented by:

Olav T.M. Theodorsen, MSc

Advisor Cost Estimation, Statoil ASA

e: [email protected]

www.statoil.com

© Statoil ASA

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iso 19008: application and use of the standard cost coding

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