Value Analysis: Capturing total cost of ownership reduction opportunities in E&P projects

Value Analysis is a powerful tool to increase the value of a capital invest ment project and to capture cost saving opportunities. It is a method conce ived during World War II and frequently used on infrastructure projects, es pecially in the USA. The Value Analysis process typically consists of a well prepared 3 to 5 day workshop with focus on generating ideas to improve the current engineering concept. Emphasis is on screening all proposals in order to identify the m ost promising ideas. The workshop results in a number of proposals to modif y the existing engineering concept. Stork Engineers & Contractors have used the Value Analysis method on severa l projects as well as in proposals for Engineering, Procurement and Constru ction (EPC) projects in the Exploration and Production (EP) industry. Typical results of Value Analysis led to a decrease of Total Cost of Owners hip by some 10 to 30%. A well facilitated Value Analysis workshop also lead s to mutual trust and understanding between the parties involved. A key element in a Value Analysis is (re)definition of the proposed functio nality of a project. This is done through challenging the existing technica l concept by increasing this functionality or by meeting this functionality at a lower cost.