Quite unnoticed for the oil and gas sector, in particular production sharing agreements, is the ISO: 15663:2021 standard “Petroleum, petrochemical and natural gas industries — Life cycle costing”.
A feature of this standard among others is that this document introduces the conceptual apparatus of "life cycle costing" and explains the basics of "economic analysis" of projects and programs.
Given that in the field of production sharing agreements there are more than a dozen different types of geological study programs, annual work programs and budgets, investment financing programs, development programs, and hydrocarbon production programs, the request for an assessment of the program proposed by investors from the perspective of its economic analysis and the viability of the program as a whole is of great interest to the agreement administrator from the state side.
The assessment of a specific project in a set of programs of different cyclicity allows the state to form a vision regarding the future fate of the production sharing agreement on the part of the investor, in terms of fulfilling the obligations assumed by him.
Approval of any work program does not mean its implementation when it comes not only to the rights, but also to the obligations of investors.
Certainly, the ISO: 15663:2021 standard does not contain a methodology for economic evaluation of the work program and budget, nor does it cover all components of the life analysis of work programs, but it is a serious ideological document and guide.
Yes, the ISO: 15663:2021 standard, like any other ISO standard, is not mandatory, ISO standards are not part of product sharing agreements, but the ISO: 15663:2021 standard is a mirror of the experience of an entire industry, the regulation of which cannot be avoided.
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