Operations Readiness & Assurance (OR&A) Ltd. Registered in England No. 06820031 

How the benefits are calculated:
Reduced Maintenance Costs
Typically, savings of between 2.5% and 4% (approximately $20m per year) can be realized.
Reduced Spare Parts Costs
Typically, initial savings of between 0.5% and 1.5% (approximately $10m) on CAPEX and a reduction in OPEX of $2.5m per year can be realized.

Improved Production
Performance It is not unreasonable to assume then, that implementing OR&A would improve operability (production output) by some 5% in the first year of production and that this would typically equate to approximately $3.5m, calculated as follows: 100,000 barrels/day x 347** days x 5% x $40 = $69.4m (**365 days x 95% plant availability = 347 days) Assuming production is deferred rather than lost, at an interest rate of 5%, such an improvement would save some $3.5m per year in interest payments alone. Further benefits
However, because these costs vary from business to business, these savings cannot be quantified and are therefore not included in the calculations. 



Conclusion: The calculations show that for every $1 invested in OR&A a company will typically realize a return of almost $19, or expressed as a ratio of return, 19:1 on the original investment in deploying OR&A on their project. If the NPV calculated above were taken to be losses (due to a failure to deploy OR&A) this equates to almost 10% of lost value over the first 5 years (2% per year). Another way of looking at the cost of OR&A is to consider the actual cost in terms of lost production revenue: Total Estimated Cost of doing OR&A (typical) = $5.5m ...... or just 32 hours lost Production Revenue 
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