Cost Estimation & Control

Take-Off

Taking Off: A Crucial Step in Oil & Gas Project Estimation

In the dynamic world of oil and gas, accurate project cost estimation is paramount. A critical component of this process is "take-off", a technical term that plays a vital role in translating complex engineering drawings into actionable cost estimates.

What is "Take-Off" in Oil & Gas?

"Take-off" is a meticulous process of extracting essential information from engineering drawings and specifications. This information includes:

  • Material types: Identifying the specific materials required for each element of the project, such as steel, concrete, pipes, valves, and insulation.
  • Quantities: Determining the exact amount of each material needed, including lengths, volumes, and weights.
  • Labor requirements: Assessing the number of skilled workers, hours required, and potential equipment needed to execute the task.

The Importance of Accurate "Take-Off"

A precise "take-off" is crucial for several reasons:

  • Cost estimation: Accurate material quantities and labor requirements form the backbone of realistic project cost estimations.
  • Material procurement: Timely and efficient procurement of materials depends on accurate "take-off" data.
  • Schedule planning: Knowing the required resources and quantities enables effective project scheduling and resource allocation.
  • Project risk mitigation: Accurately identified quantities and potential labor needs help mitigate risks associated with over- or under-estimation.

Process of "Take-Off"

The "take-off" process typically involves:

  1. Drawing review: Careful analysis of engineering drawings, including piping and instrumentation diagrams (P&IDs), structural drawings, and equipment layouts.
  2. Data extraction: Extracting essential data, such as material types, dimensions, and specifications, from the drawings.
  3. Quantification: Calculating material quantities and labor requirements based on the extracted data.
  4. Data verification: Cross-checking and verifying data for accuracy and completeness.

Tools for "Take-Off"

Various tools are employed for "take-off," ranging from traditional methods to sophisticated software:

  • Manual take-off: This method involves manually measuring dimensions and calculating quantities using engineering drawings and a calculator.
  • Software-based take-off: Dedicated software applications automate the process, extracting data directly from drawings and generating detailed material lists and quantity take-offs.

Conclusion

"Take-off" is a critical process in oil and gas project estimation, translating complex engineering drawings into practical and actionable data. Accurate "take-off" forms the foundation for realistic cost estimations, effective material procurement, efficient project scheduling, and ultimately, successful project execution. As the industry embraces digital transformation, the use of software-based "take-off" solutions is expected to increase, streamlining the process and improving the overall accuracy and efficiency of project estimations.

Test Your Knowledge

Quiz: Taking Off in Oil & Gas Project Estimation

Instructions: Choose the best answer for each question.

1. What is the primary goal of "take-off" in oil and gas projects?

a) To create detailed engineering drawings. b) To estimate the project's budget. c) To schedule project milestones. d) To procure necessary equipment.

Answer

b) To estimate the project's budget.

2. Which of the following is NOT typically extracted during the "take-off" process?

a) Material types b) Labor requirements c) Project schedule d) Quantities of materials

Answer

c) Project schedule

3. What is the significance of accurate "take-off" data in terms of project risk mitigation?

a) It helps avoid unnecessary delays in project execution. b) It ensures the project stays within budget constraints. c) It reduces the likelihood of material shortages or over-ordering. d) All of the above.

Answer

d) All of the above.

4. Which of the following tools is commonly used for manual "take-off"?

a) CAD software b) Engineering drawings and a calculator c) Project management software d) 3D modeling software

Answer

b) Engineering drawings and a calculator

5. What is the primary benefit of using software-based "take-off" solutions?

a) Reduced reliance on engineering drawings. b) Increased accuracy and efficiency. c) Enhanced communication between project stakeholders. d) Improved project scheduling capabilities.

Answer

b) Increased accuracy and efficiency.

Exercise: "Take-Off" Calculation

Scenario: You are tasked with estimating the cost of a pipeline segment for an oil and gas project. The engineering drawings indicate the following:

  • Pipe Length: 500 meters
  • Pipe Diameter: 12 inches
  • Pipe Material: Carbon Steel
  • Labor Rate: $50 per hour
  • Estimated Labor Time: 10 hours per 100 meters of pipe

Instructions:

  1. Calculate the total amount of pipe material needed in meters.
  2. Calculate the total labor hours required for the project.
  3. Assuming the cost of carbon steel pipe is $100 per meter, calculate the total material cost.
  4. Calculate the total labor cost.
  5. Estimate the total project cost.

Exercice Correction

1. **Total Pipe Material:** 500 meters (given) 2. **Total Labor Hours:** (500 meters / 100 meters) * 10 hours = 50 hours 3. **Total Material Cost:** 500 meters * $100/meter = $50,000 4. **Total Labor Cost:** 50 hours * $50/hour = $2,500 5. **Total Project Cost:** $50,000 (material) + $2,500 (labor) = $52,500

Books

  • Cost Engineering in the Oil and Gas Industry: This book by Frank M. Holland covers various aspects of cost estimation in the oil and gas sector, including material take-off.
  • Engineering Design and Construction Contracting: This comprehensive book by Samuel A. H. Dill provides detailed insights into the process of design and construction in various industries, including oil and gas, where take-off is a crucial element.
  • Project Management for Construction: This book, focusing on project management in the construction sector, includes sections on material take-off and its impact on project success.

Articles

  • "Takeoff Techniques for Cost Estimating in the Oil and Gas Industry" - This article would provide specific methods and strategies used for take-off in oil and gas projects. (Search on Google Scholar and industry journals like "Oil & Gas Journal" or "World Oil").
  • "The Importance of Accurate Material Takeoff in Construction Projects" - While not specific to oil and gas, this article offers a general understanding of the crucial role of take-off in project success.
  • "Digital Takeoff: Revolutionizing Project Estimation" - This article would discuss the emerging use of software tools for take-off and their advantages.

Online Resources

  • Society of Cost Estimating and Engineering (SCEE): This organization offers resources, publications, and networking opportunities related to cost estimation, including take-off methodologies.
  • AACE International: This professional association offers various resources and certification programs related to cost engineering, including best practices for take-off in different industries.
  • Oil and Gas Industry Websites: Websites of major oil and gas companies (like ExxonMobil, Chevron, Shell, etc.) often have publications or resources on their project management practices, potentially including sections on take-off.

Search Tips

  • Use specific keywords: Use terms like "take-off," "material takeoff," "quantity takeoff," "cost estimation," "oil and gas project," "engineering drawings," etc.
  • Combine keywords: Use phrases like "take-off in oil and gas projects," "software for take-off in oil and gas," "manual take-off techniques," etc.
  • Search by author/organization: Search for articles or books by specific experts in the field of cost estimation or project management in oil and gas.
  • Use filters: Utilize Google's search filters to narrow down results by time period, type of content (articles, books, etc.), and language.

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