Benchmarking Exploration Costs Working Group

This Working Group considers practical ways to understand, benchmark and possibly codify procedures to guide government officials who are not fully conversant with detailed costs in upstream petroleum operations. This exercise is considered of significant value to new producers due to the potential benefits in the enhancement of regulator due diligence capacity, the minimisation of revenue leakage, and the enhancement of government audit.

Outputs
  • A web-based exploration costs benchmarking application that enables user-driven sharing of exploration cost data on a peer-to-peer basis with such features as: a regional cost database, a reference well, and a scalable and extensible database of costs.

The main objective of the cost benchmark platform is to serve as a tool for regulators, auditors and other stakeholders of the oil and gas industry, to get acquainted with the major stages and activities of exploration drilling and quickly estimate the cost of drilling a well in their countries. It consists of a web application with the following features:

  •  A regional costs data-table used for quick and high level comparison of the booked cost (in US$/ft or US$/m) with the historical costs achieved in same region
  •  A reference well with costs, used to generate benchmark costs to compare with booked and/or AEF costs entered by end-users.
  •  A straightforward procedure used to generate (build) benchmark costs
  • A scalable and extensible database of costs of exploration from different countries (entered by end-users) and their underlying uncertainties;
  •  A convivial user interface that will enable users to input costs of executed projects and compare those with reference costs in the database

The working group developed a reference manual that explains the main cost categories and variables, as well as a user guide which is essential reading for navigating the database.

Members will be able to access the drilling cost benchmarking platform from this page shortly.

Next steps
  • Populating the application with more reference data.
  • Guidelines of practices to support government officials in the research, collation, analysis and benchmarking of upstream exploration costs for regulatory purposes.