It is a standard practice to estimate the (1) capital expenditures (CAPEX), life cycle operating expenditures (OPEX), (2) cashflow based on recoverable reserves, production profile and the projected market price of barrel of oil equivalent (boe), and (3) the net return on investment. However, a very important parameter affecting not only the cost but potential damage to the environment is the “risk” factor. This parameter is especially important if the innovative concepts utilise less-than-mature technologies. Thus, it is necessary to assess the life cycle risk costs associated with the reliability characteristics of each concept structure component.

The risk costs include those due to inherent or natural causes (e.g. hurricane) and those due to external causes (e.g. operations and maintenance). The combined life cycle risk costs are intended to provide insight into the reliability characteristics of each system component. Four key considerations in determining the life cycle reliability characteristics are safety, durability, serviceability and practicality. These considerations can be defined as: safety: the requirement to prevent failure from natural hazard is met; durability: the overall requirement for maintenance is met; serviceability: the requirements for drilling and production are met; practicality: the requirements for schedule and expenditures are met. Reliability can be defined as the likelihood or probability that the system components have the ability to meet the four considerations applicable to each system. 

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