Oil & Gas companies have suffered in recent years due to low oil prices and high volatility; the consequent impact in revenues has led to increasing pressure on investments throughout the sector.
In addition, in some regions (e.g. developed countries) the issue of asset ageing is emerging, to a point that Companies search for ways to increase asset life far beyond its original design life.
Lastly, increasingly stringent regulations and best practices require continuous improvements in safety standards such as Seveso III (2012/18/EU), energy efficiency and emission levels (European Commission, 2018).
Therefore, Oil & Gas companies are now facing a challenging choice, as far as old assets are concerned:decommissioning and shut down, orimplementation of large investments into plant upgrade and/or revamping.
In such a complex context, it is essential to adopt structured approaches and methodologies to support management decision-making process, particularly in selecting and prioritizing investment options that will create value for Companies in the future.
The paper will present a value-based approach for the evaluation of investment options in Oil & Gas Plants, based on a probabilistic method to determine the benefits associated to safety-related investments, to be prioritized according to associated costs. The approach was implemented in a leading multinational company, with over than 10 sites in Europe, where an extensive SIL (Safety Integrity Level) analysis program has been developed and deployed.