Module 1: Project Cost EstimatingPGP/ESTIM-E

Who should attend?

  • CAPEX estimate of Oil & Gas downstream projects, including financial risk.
Audience :
  • Engineers (owner, contractor) involved in Oil & Gas downstream projects.

Level : Foundation

Course Content


      • Project Management Process reminder, including deliverables at each stage.
      • Definitions, cost references, AACE classes. Direct and Indirect costs. WBS. CAPEX vs. OPEX.
      • Order of magnitude estimate (Chilton factors). Typical accuracy and traps. Localization factors.
      • Factored estimate (Lang/Guthrie factors). Escalation, Nelson-Farrar indices.
      • Cost of main equipment, of works, of engineering services. Owner costs.
      • Semi-detailed estimate, detailed estimate. Key role of engineering studies.
      • Elements needed for final approval by owner and EPC contract endorsement.
      • Adjustments required to these methods in estimating the cost of revamping projects.

      • Project risk identification and evaluation. Potential impact on cost estimate. Action plan.
      • Allowances and contingencies, evaluation through statistical and deterministic methods.
      • Practical use of financial risk assessment software.

Learning Objectives

  • Upon completion of the course, participants will be able to:
  • estimate the cost of a project at its various stages, using an accurate database,
  • evaluate the accuracy of this cost estimate and the main risks of cost overrun.

Ways & Means

  • Each type of estimating method is illustrated by a practical estimating exercise.
  • References: AACE, Oil & Gas journal…
  • Group discussions to share feedback experience from participants on actual projects.