Cost of Site Clearance and Verification Operations in the Gulf of Mexico

Abstract

The cost of site clearance and verification operations in the Gulf of Mexico is examined based on nearly 300 jobs performed by B&J Martin, Inc. from 1997 to 2001. A description of the activities and regulatory requirements involved in site clearance verification establishes the manner in which service cost is determined. Descriptive statistics are provided and relations are derived that estimate the time and cost of clearance and verification based on various descriptor variables. The expected size and potential value of the site clearance verification market in the Gulf of Mexico is also estimated. A major conclusion of the analysis is that the cost of site clearance verification is a time-variant site-dependent function which cannot be predicted prior to performing the service. The analysis represents the first empirical study to construct clearance and verification cost functions for the Gulf of Mexico region.