New RP 139R-25: Cost Estimate Classification System - As Applied in Decommissioning for the Offshore Petroleum Exploration and Production Industries
As a recommended practice (RP) of AACE International, the Cost Estimate Classification System provides guidelines for applying the general principles of estimate classification to project cost estimates (i.e., cost estimates that are used to evaluate, approve, and/or fund projects). The Cost Estimate Classification System maps the phases and stages of cost estimating together with a generic scope definition maturity and quality matrix, which can be applied across a wide variety of industries and scope content.
This recommended practice provides guidelines for applying the principles of estimate classification specifically to decommissioning for offshore petroleum exploration and production (E&P) industries. It supplements the generic cost estimate classification RP 17R-97 by providing:
- A section that further defines classification concepts as they apply to decommissioning in the offshore E&P industries.
- A chart that maps the extent and maturity of estimate input information (project definition deliverables) against the class of estimate.
As with the generic RP, the intent of this document is to provide common terms to improve communications among all the stakeholders involved with planning, preparing, evaluating, and using project cost estimates specifically for decommissioning in the offshore E&P industries.
The overall purpose of this recommended practice is to provide the offshore E&P industry with a decommissioning definition deliverable maturity matrix that is not provided in 17R-97. It also provides an approximate representation of the relationship of specific design input data and scope deliverable maturity to the estimate accuracy and methodology used to produce the cost estimate. The estimate accuracy range is driven by many other variables and risks, so the maturity and quality of the scope definition available at the time of the estimate is not the sole determinate of accuracy; risk analysis is required for that purpose.
This document is intended to provide a guideline, not a standard. It is understood that each enterprise may have its own project and estimating processes, terminology, and may classify estimates in other ways. This guideline provides a generic and generally acceptable classification system for the E&P industries that can be used as a basis to compare against. This recommended practice should allow each user to better assess, define, and communicate their own processes and standards in the light of generally accepted cost engineering practice.
Contributors:
Cócis Alexandre dos Santos Balbino (Primary Contributor)
Leonardo Muller, CCP PRMP PSP (Primary Contributor)
Alberto Carlos Caldeira Costa Coelho
Glauco Bezerra da Silva
Martin R. Darley, CCP FAACE
Dr. Elvis Hernandez-Perdomo
John K. Hollmann, CCP CEP DRMP FAACE Hon. Life
About Cócis:
Cócis Alexandre Balbino holds a degree in mechanical engineering and completed two specializations, in economic and industrial engineering. He has been working in this field for over 30 years, with most of his experience gained in companies operating in the oil and gas sector. He worked in production planning and control (PPC) and in the development of fuel dispenser projects before becoming a professional in cost engineering. As such, he served as a manufacturing cost analyst and, more recently, as a cost engineer for big industrial process plants.
Cócis has worked as a schedule risk analyst since 2022, assessing the chances of the floating production, storage, and offloading (FPSO) vessels being manufactured on schedule. Cócis may be reached at cocis@petrobras.com.br.
About Leonardo:
Leonardo Muller, CCP PRMP PSP is an industrial engineer and cost engineering consultant specializing in cost estimation for the oil and gas sector. He holds a degree in Industrial Engineering from Universidade Federal Fluminense (UFF) and has worked as a professional cost estimator since 2012. In 2019, he expanded his work into consulting, focusing on developing cost estimation methodologies and integrating them with related functional processes, as well as internal organizational standards and professional training programs.
Leonardo is certified by AACE International as a Certified Cost Professional (CCP), Planning & Scheduling Professional (PSP), and Project Risk Management Professional (PRMP). He is an active volunteer with AACE International, contributing to the profession through authorship of technical papers and support for professional certification activities. Leonardo may be reached at leonardomuller@petrobras.com.br.
You can find this new RP here: 139R-25: Cost Estimate Classification System – As Applied in Decommissioning for the Offshore Petroleum Exploration and Production Industries