Questor Notes

Release Notes
QUE$TOR
2022 Q1 Release
May 2022
QUE$TOR is a registered trademark of IHS Markit.
Windows is a registered trademark of Microsoft

Corporation.
QUE$TOR 2022 Q1 Release Notes
Contents
Introduction 3
General upgrades in QUE$TOR 2022 Q1 4
Greenhouse gas emissions 4
Onshore flare gas and CO2 emissions updates 5
Manifolding enhancements 6
Offshore wind farm component 6
Topsides electrification 9
Offshore power cable enhancements 10
Cost data sources and accuracy 11
Cost data sources 11
Accuracy 12
Cost database update 13
General 13
Russian cost database 14
Oil price trend 15
Currency market 16
Steel 19
Equipment 21
Bulks 22
Offshore rigs 23
Offshore vessels 26
Subsea equipment 28
Labour 28
Land rigs 30
Version compatibility 31
System requirements 32
Installation procedure 33
IHS Markit May 2022 Page 1

Application execution 34
Licensing system 34
Activating standalone licenses 34
Setting network license location 36
Contacting customer support 38
Copyright 39
Page 2 May 2022 IHS Markit

Introduction
We are pleased to provide the 2022 Q1 release of the QUE$TOR cost
estimating software. The install files and supporting documentation for
the QUE$TOR 2022 Q1 release are available for download here.
All cost databases have been reviewed and updated to incorporate

current unit rates, exchange rates and man hour costs for all regions to
reflect first quarter (Q1) 2022 prices.
The technical enhancements made to QUE$TOR 2022 Q1 are outlined

below. These changes have been made at the request of users and
through internal review. We actively encourage feedback from users as
a means of improving the functionality, accuracy, and ease of use of
the program.
If you are new to QUE$TOR, please read the installation procedure and
licensing section in this document prior to installation of the program.

General upgrades in QUE$TOR 2022 Q1

In response to user feedback the following features have been
implemented in QUE$TOR 2022 Q1.
l Greenhouse gas emissions

l Onshore flare gas and CO2 emissions updates
l Manifolding enhancements
l Offshore wind farm component
l Topsides electrification
l Offshore power cable enhancements
Greenhouse gas emissions

The greenhouse gas (GHG) emissions report, accessible from the
Project menu, now includes offshore and onshore components in its
analysis.
The report includes the CO 2 emissions for the Production and surface
processing and Operational maintenance categories. The emissions are
calculated at the activity level and summed at the category and project
levels. The emissions intensities are estimated at the category and
project levels.
The report allows individual activity emissions to be adjusted or

removed to accommodate a company's or individual's requirements.

Onshore flare gas and CO2 emissions updates

A new section for Flare gas volumes has been added to the Logistics
and Consumables section of OPEX for onshore projects. Flared gas is a
significant contributor to CO 2 emissions and you now have more
control over defining the gas volumes going to the flare in any onshore
project. The new section is split into two categories:
l Operational flaring occurs at the start- up of production wells,

planned shutdown of equipment during production, flaring of gas
that does not meet export specification, flared gas volumes due to
equipment maintenance and equipment outages. In this category,
it also includes any gas flared during an emergency shutdown
(which includes process trip of equipment, shut-in of the wells,
and all process purges and pilots). An allowance is added for the
gas flow keeping the flare ignited.
l Production flaring is the intentional flaring of production gas in a

typical no export option. This is manually set by adjusting the
flaring percentage input. Production flaring accounts for any
produced gas after fuel gas, operational flaring, and processing
losses have been accounted for.
Figure 1 - Flare gas in OPEX Logistics and Consumables
The Flare load line item in the CO 2 emissions section of OPEX is

calculated based on this new addition of operational and production
flaring. This replaces the previous assumptions, although any user-
edited values will remain locked. The calculated CO 2 emissions from
flaring assume that the flared stream is primarily methane and that the
combustion is complete. Due to the change in assumptions regarding
annual gas quantities flared, this could produce a notable increase in
the amount of CO2 emitted.

Manifolding enhancements
Production facilities and topsides have had changes made to
manifolding. Manifolding now calculates the weight of the manifolds
based upon the number of inlets, flowrate, and design pressure.
Previously the weight was calculated based upon the number of remote
and platform wells, risers, and flowlines coming from upstream
components.
As part of this change to manifolding, inputs have been separated into

two tabs on the manifolding form, one for the manifold components
and the other for the required accessories. This means that the weight
for manifolds and accessories is now calculated separately on each tab
with a total weight for each displayed. Both the manifolds and the
accessories total weights are reported on the cost sheet as separate
line items. These have their own database cost entries and therefore
some change in cost can be expected in manifolding when upgrading
cases to 22.1.
For topsides the well bay area has been revised to include remote
risers. Previously, the number of well bays required was based on the
number of platform wells only. As remote risers are now considered as
an inlet coming into the platform, this is now included in the well bay
calculation. This may result in an increase in the number of well
bays/porches that are required.
Offshore wind farm component

Platform electrification is just one of several measures currently being
adopted to accelerate the decarbonization of new and existing offshore
oil and gas assets. The long-term strategy is to reduce and eliminate
the requirement for local gas turbine generators by sourcing power
either from subsea power cables from shore or from offshore wind
turbines.
A new Offshore wind farm component is now available in QUE$TOR

Offshore to estimate the capital, operating, and decommissioning costs
of an offshore floating wind farm used to provide electricity to new and
existing offshore oil and gas production facilities. The reduction on
greenhouse gas (GHG) emissions from the connected facility can be
seen in OPEX and in the GHG emissions report. The new component
can also be used to create a standalone wind farm with the capability to
export power to shore.

The wind power is provided by floating wind turbines installed on either

semi-submersible or spar substructures. This new component enables
you to:
l Provide full or partial power to new or existing offshore facilities
l Provide power to grid
l Lower power generation topsides weight and cost by reducing the

size of the power plants (both gas turbines and diesel engines)
and their associated fuel consumption
l Reduce the total GHG emissions
The offshore wind farm component can be selected from the offshore
component toolbar and connected to other components (i.e. Topsides,
Landfall, Sink, and Source) via power cables as shown in Figure 2.
Figure 2 - Field development schematic of a project including

the offshore wind farm component
The Design parameters in the Primary input tab, shown in Figure 3,

allow the primary sizing criteria to be set. The Topsides power
demand shows the demand from any power cables connected to
offshore facilities. The Other power demand indicates the power
required by other sources, like power sent to the grid. These two

demands ultimately calculate the size and the number of actual

turbines to be installed, which in turn determine the wind farm Rated
capacity . The Average annual power generated , which is the
estimated power provided by the offshore wind farm over a year, can
then be checked against the Required wind power . Given the
inherent variability of wind, the Percentage to replace and Wind
capacity factor can be adjusted to tailor the design capacity required
to achieve the annual power supply needed from the offshore wind
farm.

Figure 3 - Steps to design the optimal offshore wind farm

configuration
Topsides electrification
With the increase in industry consideration of scenarios powering
topsides with offshore wind farms or with power from shore, we have
adjusted the default driver options for pumping and compression to
electric drive when an Offshore wind farm is connected. This means
that all rotating equipment is driven by electric motors and their power
demand is shown in the power input form. Power is still expected to be
partially produced by gas turbine driven generators given the inherent
unpredictability of wind. An electrified topsides allows for the maximum
power offset from the wind farm and more flexibility in modelling a
reduced number of gas turbine driver trains.

To facilitate electrified topsides we have also extended the maximum

electric motor size, including theoretical 40 MW and larger electric
motors. The design duty and the number of motors used have been
improved to ensure even large power needs are met with multiple
trains of smaller and more feasible motors.
Offshore power cable enhancements

You can now select between AC (alternating current) and DC (direct
current) power cables for transferring power between components
including Topsides, Offshore wind farm, Landfall, Offshore source,
Offshore sink, and Offshore loading. AC power cables are selected as
default.
Current carrying capacities and unit costs of cables and risers were
reviewed as part of this enhancement. As a result, the conductor area
and overall cost of any existing power cables has been impacted. The
type of power cable, number of conductors (3-core AC or bi-pole DC),
and conductor area are shown on the cost sheet.
The topsides power distribution weight calculation was also reviewed

and updated to make allowance for converters, transformers, and
switchgear when power is either received or transferred via offshore
power cable. When you select AC cables, distribution weight includes
transformers and switchgear. When you select DC cables, added
allowance for converters, transformers, and switchgear are made. This
change impacts power distribution weight and cost.

Cost data sources and accuracy

The QUE$TOR cost databases available within the program are
regional, and together, in total, provide worldwide coverage. Each
regional cost database contains a full set of cost data for that region,
from equipment costs to labour rates and operating assumptions.
When a new procurement strategy is created, the most appropriate
regional database for each cost centre can be selected from the
available list.
The costs within each cost database are updated on a six-month basis,
with the Spring release representing costs from the first quarter (Q1)
and the Autumn release representing costs from the third quarter (Q3)
of the year.
Cost data sources

A dedicated team of costs analysts research cost data throughout the
year from a large variety of sources.
l A main source of information is regular interaction with vendors,

suppliers, manufacturers and contractors. A solid network of
equipment manufacturers and service providers has been
established to constantly gather Free on Board (FOB) quotations
and market trends.
l New information and data are provided quarterly by the IHS

Markit Global Insight, Petrodata and CERA teams. These teams
are responsible for quarterly reports and indices of the main oil
and gas market sectors – such as Offshore Rigs, Offshore
Installation Vessels, Land Rigs, Engineering and Project
Management, Steel, Yards and Fabrication, Equipment, Bulk
Materials, and Labour.
l Information exchange with current users is also crucial to the

completeness and accuracy of QUE$TOR cost data. The number of
cost estimators and field development engineers who are willing
to share cost data and industry insights with the QUE$TOR team is
increasing every year. Sharing information ultimately means
making QUE$TOR a better tool for project estimates.

l Publications and technical literature are used as additional data

sources. These are sometimes oil and gas specific and sometimes
more generic and suitable weighting is applied to the most reliable
and appropriate sources.
l Government statistics (e.g. US Bureau of Labor Statistics, UK

Statistics Authority, Eurostat, Australian Bureau of Statistics,
Russian Federal State Statistics Service, etc.).
l Cost indices, e.g. the IHS Markit CERA Upstream Capital Costs
Service Index (UCCI), the US Department of Labor Producer Price
Index and Consumer Price Index, the IHS Markit Global Insight
Price Index and the ENR’s Construction Cost Index. These are
more aggregate and so are not used directly but can help
generally inform the direction other industry analysts see the
market moving.
l In- house cost models for more QUE$TOR specific items, e.g.
secondary steel and tanker turrets. Models are also used to track
the cost movements of the market demand for other items e.g.
pressure vessels and heat exchangers.
QUE$TOR cost databases currently have more than 100,000 data

points, an amount that is always increasing as new technologies are
continuously added to the software. Given the significant number of
inputs to be updated every release, budgetary quotations on specific
equipment and services are usually gathered periodically and as
needed, but then cost data are adjusted on a six-month basis based on
market analysis.
Accuracy
QUE$TOR provides an estimate based on the costs within the markets
today. No allowance for inflation or deflation of costs is made over the
project life.
All costs within QUE$TOR are specific to a particular point in time

(depending on the version). No tax, inflation or discounting is applied
to the estimate to costs incurred over the project life.
QUE$TOR is designed for use early in the project cycle. Therefore, the
accuracy level that can be attained by using the program is typically
within the range of +/- 25% to 40%. This corresponds to AACE
International Class 5/4.

Cost database update

Substantial effort has gone into reviewing all cost databases to bring
them in line with first quarter 2022 costs. The following sections,
outlining the market trends seen over the past six months, are the
result of IHS Markit research, analysis, and insight. QUE$TOR cost
databases aim to provide accurate and reliable data that is
representative of current market conditions.
Note: When saving a project, the QUE$TOR 2022 Q1 cost estimates will
overwrite earlier costs except where those costs are ‘locked’ on the
cost sheet or in the database. Therefore, if you wish to retain a copy of
your original estimate you should first create a duplicate of the project
before opening and saving it in QUE$TOR 2022 Q1.
QUE$TOR takes a considered view and tries to avoid any transient cost
variations with the aim of providing accurate cost data to be used for
cost estimation purposes. Therefore, you may see some differences in
trends, especially for commodity prices as compared with the latest
available data. Further detail relating to the impacts on the cost
database are provided in the Benchmarking Report, available via the
download site.
General
The COVID- 19 pandemic has shaped global economic activity since
2020 and is anticipated to continue for the foreseeable future with
more contagious but less severe forms of COVID displacing previous
more severe strains. The global economy is adjusting to the reality of
COVID and the fact that it will be present in everyday life for some
years to come.
As restrictions eased in the fourth quarter of 2021, the global economy

showed strong signs of recovery throughout 2021. This placed
significant challenges on the supply chain in the form of availability of
raw materials, finished goods, and labour. These challenges were
further compounded by low global inventory levels and disruption to
elongated global supply chains, which have been recovering after the
initial COVID-19 pandemic and the shutdowns that followed.
These issues have, more recently been compounded by conflict in

Ukraine, which is a global supplier of commodities and the sanctions

imposed on Russia in response to the conflict. The conflict has provided

significant support to global oil and gas prices as well as highlighted
energy security as a major issue for Europe.
The rapid increase in oil and gas prices is one of the largest drivers
supporting increased inflation rates. Prices are increasing despite the
release of significant quantities of oil from strategic oil reserves by
some western governments and reassurances from OPEC members
that they are increasing oil supply to calm oil markets and meet
increased demand.
The conflict in Ukraine, coupled with supply shortages, supply chain

interruptions, significant inflation, and newly increased taxation
measures introduced by governments in response to the pandemic
have contributed to some significant cost increases. These increases
are expected to continue throughout 2022 and beyond until such time
as oil and gas prices reduce to more sustainable levels and there is
some form of conflict resolution in Ukraine.
Russian cost database
The Russian cost database has been updated with available regional
and global cost data. However, given the conflict with Ukraine and the
recently imposed sanctions, the market situation has been unclear and
it has proven difficult to source data. For some of our regionally
sourced cost items, previous cost values have been maintained in the
cost database. Due to the limited data update, care should be taken
when using this database until costs can again be reliably sourced.
Should you need any further insight regarding our Russian data please
contact us at [email protected].

Oil price trend
Figure 4 - WTI and Brent crude oil prices
The recent conflict in Ukraine has introduced significant uncertainty in

the price of oil, and this was preceded by a steady increase in crude oil
prices through the start of 2022 following a notable drop toward the
end of 2021.
In November 2021, crude oil supply turned from deficit to surplus with
the emergence of the COVID- 19 Omicron variant and the
announcement by the US of releasing oil, both of which sent prices
tumbling. However, crude oil prices rebounded and climbed to new
highs as OPEC+ members produced below their monthly quotas and
the Omicron variant turned out to be less severe than previous
variants, prompting a more rapid ‘return- to- normal’ than was
anticipated.
The war between Ukraine and Russia has introduced uncertainty into
the market and has also directly impacted the flow of Russian energy
exports. These drivers have caused crude oil prices to exceed the 100

USD/bbl benchmark for the first time since 2014. Prices also surged
over 120 USD/bbl in early March due to the ongoing conflict and
combined with a decline in crude inventory in the US.
Crude oil prices dropped sharply after experiencing an initial price

surge. This was driven by the hopes that Saudi Arabia and the United
Arab Emirates could increase production and that demand would
decrease in China due to new COVID- 19 movement restrictions.
Although, as evidenced by a subsequent second price surge, low
storage inventories, the ongoing Ukraine- Russia conflict, low spare
production capacity, and COVID- 19 restrictions in China will likely
cause daily price volatility to be high in the near term.
Currency market
The high volatility in the currency market during the first quarter of
2022 was mainly the result of the Russian invasion of Ukraine at the
end of February. The uncertainties and fears over the impact of the war
and the reaction from Europe, the US, and other allies on the global
economy have significantly affected all major markets. Europe’s strong
dependence on Russian energy supply, Russia and Ukraine’s roles as
major suppliers of agriculture products, metals, and other key raw
materials, as well as the sanctions imposed in response to the Russian
invasion, were all crucial factors in the global market’s initial reaction to
the conflict.
To a certain extent, the war in Ukraine amplified some of the key

market trends already developing before the start of hostilities e.g.,
rising commodity prices, higher interest rates, and a broadly firmer US
dollar (USD). In particular, the jump in raw materials and energy prices
is reinforcing concerns that inflationary pressures are likely to continue
as measures from governments and central banks have taken too long
to be implemented.
Those currencies that have received support from active central bank
policy making (USD, CAD) have outperformed those where central
bank rate hikes have remained more limited. The best performing
countries this first quarter of the year have been commodity producers
such as Angolan kwanza (AOA) and Brazilian real (BRL), while the
worst have been commodity importers with close economic links to
Russia, such as the Turkish lira (TRY), Polish zloty (PLN), the euro
(EUR), the British pound (GBP), and Korean won (KRW).

The world economy is projected to lose pace this year as inflation rises
due to the war and the reinstated Covid-19 lockdowns in China while
fiscal and monetary policies tighten. Risks to future global economic
growth include China’s economic performance, new variants of Covid-
19, the evolution of the Russia-Ukraine war, and the impact of further
sanctions on Russia.
Table 1 shows the exchange rates of the major local currencies,

expressed as equivalent to 1 USD, and the percentage change between
Q1 2022 and Q3 2021. The variations are also more clearly
summarised in the chart in Figure 5 .The exchange rates have been
averaged over the last full month of the quarter to mitigate the
volatility caused by the significant uncertainty associated with the
recent economic fallout caused by the Ukrainian conflict.

Table 1 - Exchange rates and fluctuations of major local

currencies since Q3 2021

Figure 5 - Exchange rates variations relative to USD
Steel
While steel prices rose considerably in the first half of 2021, the market
began to rebalance in the fourth quarter as input costs declined and
supply began to meet demand. However, with the Russian invasion of
Ukraine in the first quarter of 2022, steel prices once again noted
significant increases, particularly in Europe and the Mediterranean.
Regionally, demand has remained relatively stable for most products,
but massive logistical challenges and rising raw materials costs are
negatively impacting the already limited supply. Prices for almost all
steel products in most regions are unsustainably high. Given the
roughly six-month lead time for procurement, stainless steel and alloy
products showed the most notable gains worldwide as high input costs

and supply chain issues affected prices. Linepipe also showed large
price increases for all regions, most notably in Europe, the
Mediterranean, and North America, as the costs of plate and sheet steel
rose considerably due to significant supply restraints for raw materials
and the high cost of iron ore. As the conflict in Ukraine continues
through 2022, the steel market is expected to rebalance. However,
prices remain unpredictable and will continue to be impacted by global
events.
Despite an anticipated decline in the fourth quarter of 2021, carbon

steel linepipe prices increased globally by 28% in US dollar terms, due
mainly to the massive rise in input costs resulting from the conflict in
Ukraine. European linepipe marked significant increases in local
currency as lower export volumes from Russia and Ukraine affected
supply, particularly for seamless products. Additionally, demand has
risen as high oil prices incentivize increased drilling activity, putting
additional pressure on the supply chain and further tightening the
market. North American linepipe also increased considerably. Despite
efforts to increase production, inventories remain short, and the high
input costs have reduced margins, providing little incentive for mills to
further increase production to meet domestic needs. Globally, linepipe
prices are expected to increase in most regions through the third
quarter of 2022. However, as both Russia and Ukraine are primary
suppliers of raw materials and input products for many regions, it
remains to be seen how an extended conflict will impact the global
market.
Continuing the upward trend that began in the first quarter of 2021, oil
country tubular goods (OCTG) experienced some of the largest
increases of any steel product, with prices in Europe, the Middle East,
and South America rising most notably in the last six months. As oil
prices escalated to record levels in the first quarter of 2022, demand
for OCTG has increased globally and mills are unable to adequately
match production output, particularly affecting inventories in Europe
and North America. Additionally, costs for specialty raw materials such
as nickel and titanium soared in the first quarter due to supply chain
disruptions and shortages. Global consumption of OCTG is anticipated
to rise through 2022, most significantly in the United States, while
supply delays and elevated input costs tighten an already strained
market.
In the last six months, global structural steel and rebar prices rose in
US dollar terms by 12% and 13%, respectively. While declining input
costs and decreasing construction activity in China due to COVID-19
outbreaks tempered prices in the fourth quarter of 2021, the conflict in

Ukraine significantly impacted prices, forcing large increases. Both

Russia and Ukraine are major exporters of iron ore and scrap to Europe
and North America. Without Russian iron ore and pig iron, producers
have depended heavily on scrap inputs, causing the cost of scrap to
rise substantially in 2022, particularly in Europe, North America, and
South America. While Brazilian iron ore supply can prevent major
shortages, prices for structural steel and rebar are anticipated to
remain steady through the third quarter of 2022 as inventories
replenish and Russian and Ukrainian raw materials are expected to re-
enter the market.
Equipment
Equipment costs have increased moderately in the first quarter of
2022, where the main drivers have been the high costs for inputs like
steel and bulk materials. The rise in oil prices and the increase in
project activity also contributed to the escalation in equipment price
overall. In some cases, like the European market for global equipment,
currency fluctuations against the US dollar tempered the impact on
equipment costs, causing them to drop slightly. However, overall costs
went up for most regions.
Supply chain disruptions continue to affect the equipment market,

augmented by the conflict in Ukraine. Impacts of the COVID- 19
pandemic are still being felt globally, and recent outbreaks in China are
adding uncertainty to the market. This continues to create global
supply chain disruptions, in turn affected by sporadic changes to
regulations and trade restrictions. Irregular increases in freight costs,
particularly shipping and transportation rates, are causing major
disruptions to shipping routes, resulting in shortages in some
manufacturing and spare parts.
Heat exchanger prices increased slightly in the first quarter of 2022.

Similar to last quarter, high input costs are the main driver for this
increase, in particular direct material costs such as steel and other
metals. Some improvements to the supply conditions have been seen.
However, supply chain disruptions, worsened by the conflict in Ukraine,
remain a heavy influence on the high costs. Moving toward the end of
2022, the market is expected to begin rebalancing as supply chains
stabilize which, in conjunction with solutions like the customization of
equipment and off- the- shelf solutions, are expected to dampen the
price increases.

Tanks and pressure vessel costs for all regions have seen a moderate
increase in local currency in the last quarter, continuing the previous
quarter’s upward trend. This is also due to the higher input costs for
steel products, alloys, and labour, magnified by the conflict in Ukraine.
Gas turbine costs saw a reasonable increase in US dollars in the first

quarter of 2022, influenced by the higher input costs. Although some
improvements are expected towards 2023, manufacturers are still
dealing with mounting backlogs and longer delivery times. The market
is now also having to deal with energy transition momentum, and
major manufacturers are downsizing their oilfield services to
accommodate orders from the renewables industry.
Bulks
Bulk materials consist of various products including steel, concrete and
cement, wire and cables, electrical components, instrumentation,
valves, paint, asphalt, and insulation. Bulk materials demand is mostly
influenced by construction activity in the residential and commercial
sectors, which depend on the state of the economy. Therefore, the
demand for bulk materials tends to be subject to specific market
conditions and local economic development.
In the last six months, bulk material prices were expected to flatten but
have continued trending upward in the first quarter of 2022 due to high
inflation and the Russian invasion of Ukraine. Globally, increasing steel
and raw material costs facilitated a rise in price of bulk materials.
Higher oil and natural gas prices are also assisting in the recovery of
energy sector project activity, further increasing demand for bulk
materials. Due to inflation, rising raw materials costs, and high oil
prices, the bulk materials market is expected to tighten further through
the third quarter of 2022.
Supply chain disruptions are influencing the bulks market as the effects
of the COVID-19 pandemic continue to impact all regions. The outbreak
of new COVID- 19 cases in China is fuelling uncertainty and causing
delays to the supply chain. Regulatory changes and rising
transportation tariffs are also contributing to increasing prices of bulk
materials.
As global investment in the power and renewables sector grows,

demand for wire and cable is rising. While copper prices have continued
to remain high through the first quarter of 2022, inventory remains
low, causing the potential for unexpected price increases. Prices are
expected to flatten by the end of 2022 as construction activity in China

and Southeast Asia slows due to shutdowns. Any additional disruption

due to the conflict in Ukraine could add further increases to copper
prices.
In the last six months, switchgear and transformer prices experienced

steady growth. This is largely due to the significant increases in input
costs for steel, other specialty metals, and transportation. Supply chain
disruptions and increased investment in the power and renewables
sector also placed further upward pressure on the market. While new
energy projects have impacted the market for switchgears,
modifications to the existing power network in the US have also
contributed to price increases in the first quarter of 2022. Moving
toward the end of the year, prices could flatten due to COVID- 19
lockdowns in Asia.
Cement and concrete prices increased in the first quarter of 2022, due
primarily to increased spending in infrastructure. As crude oil prices
increase, demand has risen for higher price oil cement used in well
construction activity. Cement and concrete prices also rose due to
labour shortages and wider adoption of eco- friendly cement and
concrete products. The business model has shifted towards net-zero
emissions targets. Lower-carbon versions of cement and concrete are
more expensive, bringing up the overall average price for cement and
concrete. As with other bulk products, lockdowns in Asia may temper
demand and offset price increases.
Bulk materials prices are expected to continue rising through the third
quarter of 2022. However, the conflict in Ukraine and lockdowns in Asia
will be key factors in determining the overall extent of the increase. In
addition, the $1.2 trillion Infrastructure Investment and Jobs Act
passed in the US, plus increased investment in the power and
renewables sector, could escalate the demand and further tighten the
market.
Offshore rigs
The offshore rigs market has continued its improvement from 2021,
with increasing fixtures, utilization, and day rates. Rising oil demand
and conflict in Ukraine support increasing confidence in the market.
Early indications show that a significant number of previously cold
stacked rigs are either being reactivated or being considered for re-
activation. Many of those rigs now being reactivated are for long-term
contracts with extensions. However, the offshore rigs market also has
short- term issues to manage, specifically the ongoing effects of

COVID-19, crew shortages, and supply chain issues caused by a near

collapse in offshore drilling activity over the past 5 years. Longer-term,
the offshore rigs market will have to adapt to stricter environmental
legislation, emission standards, and the transition to renewable
energy.
Early terminations and contract cancellations in 2020 due to the

COVID- 19 pandemic, along with low crude oil prices, have made it
extremely difficult for drilling contractors and the total number of
offshore rigs decreased. 2021 saw the highest attrition since 2018,
with the jackup market being hit the hardest. Some of the offshore rigs
that left the market were scrapped and some were converted for use in
the renewable sector.
With recent activity in Southeast Asia, the floater market has seen new
rig requirements and new contract fixtures being announced.
Indonesia was the only country in the region with a floater requirement
until 2022. However, based on recent activity and tendering levels,
several other Asian countries are currently considering the use of
floaters. In the jackup market, demand has been increasing, with
Indonesia and Malaysia driving current and future demand. There will
likely be a higher demand for jackup rigs as more activities are
anticipated across the region.
In the Indian Ocean, the floater and the jackup markets have started
the year quietly compared to Southeast Asia, with only a single award
announced for both markets so far in 2022. Demand for semis has
decreased whilst jackup demand has been maintained in the first
quarter of 2022.
In West Africa, drillship demand continued to increase with more

requirements announced. The semis market remained quiet during the
first quarter of 2022, with an uptick in the jackup market. Further
demand is expected as the year progresses.
In the Middle East region, the demand for jackup rigs increased as
NOCs continued to increase production capacity and, in turn, boost
overall rig numbers. Future growth is expected to be driven by new
requirements from Saudi Arabia and UAE. Jackup supply also
decreased in the region, increasing upward pressure on rig rates, which
are expected to increase and are being underpinned by increasing
operating costs.

The Latin America offshore rig market has handled the COVID- 19
pandemic better than most regions and is now in a strong position to
benefit from increased demand in 2022 and beyond. Future demand is
expected to support current high utilization levels within the region.
In North America, the floater market remains active with multiple new
rig requirements and new fixtures announced in the first quarter of
2022. The availability of drillships remains tight; more drillships are
expected to enter the region as the year progresses. The demand for
semis remains flat as drillships are now the primary regional
preference. Jackup demand is at its lowest since 2016.
In Northwest Europe, the floater market remains active with multiple

new rig requirements and new fixtures recently announced. However,
floater day rates remain relatively unchanged. Northwest Europe also
has the highest attrition rate for the semis globally. Jackup demand is
expected to remain broadly flat due to an oversupply and lack of long-
term drilling programmes.
The spider diagram in Figure Figure 6 shows the percent changes

implemented in QUE$TOR 2022 Q1 to the offshore rig day rates.
The shortage of data for recent fixtures in some regions has made the
day rate update challenging for some rig specifications. Day rates in
QUE$TOR are based on our best understanding of the market at the
time. Often it is hard to identify the most representative day rate for
every offshore rig class in the current commercial market, where
variable transparency makes some rates private and those rates which
do become public knowledge do so on a variable timescale.

Figure 6 - Regional offshore rig day rate changes since Q1 2022
Offshore vessels
The offshore vessel market has started the new year facing challenging
times; however, optimism has increased and there are expectations
that offshore vessel owners could get higher day rates as the year
progresses. This is supported by increased demand for some vessels in
some regions, e.g., construction support vessels in the US Gulf of
Mexico.
The recovery in offshore vessel demand has already begun and most
market segments and regions are showing increased activity and
higher utilization. In addition, the requirement for reduced emissions is
increasing in the offshore vessel market to meet tighter environmental
legislation. Vessel owners have started to move towards net- zero
emissions with conversions of existing vessels, adding battery and
hybrid capability to their fleets. These new vessel designs provide an
indication of where the market is heading to meet increasing emissions
targets and support future sustainability.

In Asia Pacific, the utilization rate remains low, but demand is expected
to increase in the next several quarters as countries look to other
regions to ensure energy supplies following the conflict in Ukraine. The
oil and gas market is also competing with an increased demand in the
renewable energy market for higher specification vessels which may
put pressure on day rates.
In Latin America, demand in Brazil has been steadily increasing due to

a stronger drilling activity and a spate of new discoveries. Higher
operating costs are also providing support for increased day rates.
The Middle East saw declining seasonal demand for the offshore vessel
market in early 2022. As many clients concluded their annual
campaign, the utilization rate fell further from the previous level. At the
end of the first quarter of 2022 vessel demand gained momentum, with
more fixtures indicating a robust recovery ahead.
In Northwest Europe, vessel demand is expected to increase

throughout the year from seasonally adjusted lows. Increasing demand
will also provide support for increased vessel day rates, especially on
some higher specification vessels. In March, term fixture activity
started to increase as several vessels were chartered on new extended
deals.
In the Gulf of Mexico, offshore vessel demand has remained strong

since the end of 2021. Floating rig programs are the main activity that
has underpinned increases in demand and hurricane remedial work.
Higher operating costs and the shortage of skilled mariners has
resulted in significantly higher day rates on most vessels, with
construction support vessels seeing the largest increases. Higher day
rates and increased demand are attracting more US flagged vessel to
return to the Gulf of Mexico.
With a strong 2022 outlook, further increases in vessel day rates are
expected, with the possibility that these extend until the end of 2022
and into 2023. Further increases could be supported by the rise in
operating costs and shortages of crews with rates for some categories
expected to outpace general rate rises, e.g., construction support
vessels. Demand for these vessels is likely to increase due to a rise in
activity both in the renewables and in the oil and gas market.

Subsea equipment
Subsea costs have seen a moderate but notable increase in the past six
months. This increase has some sub market and regional variation but
this is minimal with many subsea equipment items coming from a small
group of global companies.
With costs driven more by demand than simple material input, the
subsea market has been in a weak position over the last couple of
years with low oil prices and weak demand. Oil prices have seen major
increases in recent months, which has seen more orders being placed.
However, the uncertainty introduced with the Ukraine conflict has
taken focus, restraining the demand for subsea equipment and slowing
cost increases.
The increases seen in the subsea market have been driven primarily by
increases in raw material costs, labour costs, and inflation across the
industry, although the contributions of each of these vary between the
specific equipment items. Trees and manifolding have seen the largest
increase with the rise in cost of labour and a substantial increase in the
cost of steel and alloying metals. Flexible pipe and umbilicals have seen
less increase with little sign of returning demand.
COVID- 19 effects continue to show through, with supply chain and

transportation issues impacting cost and timelines, although mitigation
strategies are becoming more effective.
While the cost increases are the largest seen in subsea equipment in a
while, they are still somewhat restrained. However, there is
expectation, with high oil prices, of pent up demand driving up costs
due to projects waiting in the wings starting to show up on order books
in the coming months.
Labour
Workforce mobility issues during the peak of the pandemic have
resulted in significant pressure being placed upon the general labour
market rate. The requirement for in- person work was scaled back
during the pandemic and now we are seeing a desire to increase that
work again. There is now a backlog of work and scheduled projects
coming online. In some regions, this is resulting in a tighter market for
labour. During the pandemic, there was significant support for
furloughed workers as governments tried to maintain industries and

their markets. In some cases, this resulted in a hold on wage increases

until the work became available again. Markets now look ready to move
forward with an overall general increase in the labour rate.
In the US market, the labour rate has increased by about 1.5%, but
there are some differences between the type of labour and the work
situation. For example, in the US offshore market there has been an
increase of 1.2% for project management and 1.8% for general labour.
For onshore projects in the US, the labour rate has increased by about
1.3% for project management and 2.1% for General labour.
Labour rates in other countries have followed this trend except for
Russia, which has seen an increase, and Australia, which has seen a
decrease. The labour rates in Russia are the result of wage inflation due
to the Russian invasion into Ukraine. The decrease in Australia can be
attributed to the harder lockdown practices imposed by the Australian
government, lack of mobility in the marketplace, and adjustments in
the exchange rate.
Growth in labour rates in Europe has picked up its pace from a nominal
growth rate at the start of 2021. This can be seen in the construction
labour index, which increased by 6% in USD terms and by 2.3% in the
local currency in 2021, with most of this happening in the latter part of
the year. For the 2022 Q1 release this translates to a labour rate
increase of between 1.3% to 2%, with higher rates being seen in
markets such as the UK where there is a skills shortage in the oil and
gas sector. It is expected that Norway, with its current increase of
1.5%, may follow this higher wage growth as the new government has
signed support for offshore exploration work that should create a need
for more construction labour in the short term. In Europe, vacancies
are also rising due to disruptions in migrant labour flows, which may
also compound the skills shortage and wage growth.
In most other regions, project activity was increasing late in 2021 with
new FEED awards being announced. This new work is helping to
increase employment levels and boost wages. However, wage
increases are unbalanced with companies struggling to fill higher wage
technical positions (electrical, instrumentation, etc.) compared to
general labour rates. This tightening of markets and limited demand
availability means that there is wage growth in Africa, India, the Middle
East, Asia, and South America in this half year at a rate of 1% to 1.4%.

Land rigs
Continuing the upward trend from 2021, day rates for land rigs
increased globally by 2.4%. Rising oil prices and the Russian invasion
of Ukraine have strained the energy sector, driving oil prices higher.
Tender activity in most regions is growing, but utilization continues to
struggle as operators limit the number of rigs online due to labour
shortage and supply chain disruptions. While the COVID-19 pandemic
forced significant fleet reductions, drilling contractors focused their
efforts on negotiating performance-based contracts over the traditional
day rate model. As drilling activity continues to increase, super spec
rigs will be utilized first over other rig classes. However, as super spec
availability tightens, contractors will reactivate idle lower-class rigs to
manage the difference. Total rig utilization and day rates are expected
to increase through 2022, driven by rising operating costs and
demand.
North American high spec day rates increased by approximately 2.5%

over the last six months as drilling activity continued to rise due to high
oil prices and newly approved drilling budgets. The US rig count
declined considerably in 2020 and is still working to recover. However,
the North American onshore rigs market is much more reactive than
other regions to rising oil prices. Super spec rigs, which experienced
higher-than-usual utilization rates beginning in January of 2021, noted
a slight decline in the fourth quarter of 2021 as shorter contract terms
expired and utilization stagnated. Additionally, rig operators are
struggling with insufficient labour and supplies. In all rig classes, North
American day rates are expected to further rise through 2022 as
drilling activity remains steady and stacked rigs are reactivated.
Day rates in all other regions experienced notable growth. However,

South America, Africa, and Eastern Europe increased most significantly
by an average of 3% in US dollar terms. Throughout 2020, as low oil
prices and COVID- 19 safety restrictions limited drilling activity,
operators placed most international rigs on stand-by contracts. While
activity has risen in the first quarter of 2022, drilling contractors are
anticipating even larger increases as the year progresses. Demand is
high, particularly in the Middle East, and tendering activity is strong.
Despite this, limited supply is impacting availability. As operating costs
grow and the market tightens, day rates for all regions are expected to
increase through the end of 2022.

Version compatibility
Projects created in QUE$TOR v8.0 and later are compatible with
QUE$TOR 2022 Q1. However, projects created or saved in QUE$TOR
2022 Q1 cannot be opened in earlier versions.
Opening a project created in an earlier version of QUE$TOR will result

in the costs and technical calculations automatically being updated,
except where unit rates or results have been ‘locked’ when creating the
original project. Changes will be made permanent when the project is
saved and the case will no longer open in the earlier version. It is
therefore advisable to make a copy of your project file before opening it
in the new version.
QUE$TOR allows multiple versions of the program to be installed side

by side in order to view projects created using earlier databases.
In order to run the latest version of QUE$TOR alongside older versions

that use the previous licensing system, both the new and previous
licensing systems will have to be setup on the machine running
QUE$TOR.

System requirements
QUE$TOR 2022 Q1
Windows 7 SP1 / Windows 8.1 /

Operating system
Windows 10 [v1607][1]
Application disk space 275 MB
Disk space / project ~1 MB
Disk space / procurement
~3 MB
strategy
Minimum monitor resolution 1024 x 768
[1] The 32- bit (x86) and 64- bit (x64) versions of these operating
systems are supported.
Note: Windows 8 is no longer a supported OS but Windows 7 SP1

and Windows 8.1 are.

Installation procedure
Note: You need administrator privileges to install the

QUE$TOR software.
1. Download the install files from the QUE$TOR download site

(https://ihsmarkit.com/Info/0316/questor-software-resources.html).
2. The setup program automatically detects if you have the required

Microsoft .NET Framework version already installed and provides
a warning if you do not. You can download the correct version
from Microsoft’s website by selecting Yes. You can also download
the required .NET Framework files from the QUE$TOR download
site.
3. If not already installed, run the VC_redist.x86.exe file, which is

also available on the download site. This installs the elements of
MS Visual C++ required for QUE$TOR to run.
4. To install QUE$TOR 2022 Q1 , first unzip the downloaded

QUE$TOR install files and then run the setup.exe file.
5. The installer places an icon for QUE$TOR 2022 Q1 on your desktop

and creates a group on the start menu under All Programs\IHS
Markit\ containing QUE$TOR 2022 Q1 shortcuts for the Database
editor, the Project editor, the Project viewer, the main QUE$TOR
application, and the Unit editor.
6. If you get any warnings during the installation, please contact the
QUE$TOR support desk, [email protected].
Note:A valid license is not required to install the software but is

required to run the software. You or someone in your organization will
receive an email from IHS Markit Customer Care containing an
Entitlement ID for activating your QUE$TOR licenses.

Application execution
l Windows 7 SP1
To run the software click the Start menu and follow All
Programs > IHS Markit > QUE$TOR 2022 Q1 > QUE$TOR
2022 Q1 or double-click the QUE$TOR 2022 Q1 icon created on
your desktop.
l Windows 8.1
To run the software click the Start menu and browse the start
screen to find QUE$TOR 2022 Q1 or double-click the QUE$TOR
2022 Q1 icon created on your desktop.
l Windows 10
To run the software click the Start menu and browse the program
list to find IHS Markit > QUE$TOR 2022 Q1 or double-click the
QUE$TOR 2022 Q1 icon created on your desktop.
Licensing system
In order to run QUE$TOR a valid license will be required. Depending
upon the license type that has been purchased this can either be in a
standalone or a network configuration. For standalone configurations
users will have to obtain a license by using the standalone online
activation tool, whilst for a network configuration locate the license
server within their own network. Obtaining the license is described in
the following sections. For more information about setting up the
network server please refer to the licensing guide that is available from
the download site as well as in the help file.
Activating standalone licenses

To activate a standalone license you will need to have QUE$TOR
installed and you will need to have your Entitlement Id (EID). This EID
will be emailed to the primary license contact at each company.
When QUE$TOR is run and a feature is selected, without access to a

valid license, as would typically be the case when QUE$TOR is first
installed, an error will be shown that is similar to the one shown below
(Figure 7).

Figure 7 - Unable to retrieve license
To activate a standalone license click on the Find license… button.
Figure 8 - Set QUE$TOR license
When the Set QUE$TOR license form (Figure 8) appears click on the
Activate standalone license button. This will open the IHS Markit
Standalone Online Activation tool.
First, you will need to copy / paste or type your EID into the
Entitlement Id input at the top of the form (Figure 9) and click Connect.

Figure 9 - Standalone Online Activation
Next select the product(s) you would like to activate. Holding the Ctrl
key while selecting will allow selection of multiple products. Then click
on the Activate button.
Once complete the IHS Markit Standalone Online Activation tool can be
closed and OK can be clicked on the Set QUE$TOR license form.
QUE$TOR will now run the feature licensed.
Standalone licenses will not allow QUE$TOR to work in a shared use

environment such as Remote desktop or Citrix. Shared use
environments require network licenses.
Setting network license location

To connect a client machine to a network license service you will need
to have QUE$TOR installed, you will also need to have the location of
the QUE$TOR license service on your internal network.
When QUE$TOR is run and a feature is selected, without access to a

valid license, as would typically be the case when QUE$TOR is first
installed, an error will be shown similar to the one shown below (Figure
10).

Figure 10 - Unable to retrieve license
To connect to a License Service click on the Find license… button.
Figure 11 - Set QUE$TOR license
When the Set QUE$TOR license form appears ( Figure 11 ), type the
license server name in the Server name input box, then click the OK
button.
Once complete, QUE$TOR will be able to run the feature(s) available on

the license server if a valid license is available.

Contacting customer support

Requests for support related to the QUE$TOR application should be
directed to [email protected].
Requests can also be submitted through the IHS Markit website.
Or by phone
Americas: +1 800 447 2273
Europe, Middle East and Africa: +44 (0) 1344 328 300
Asia Pacific: +604 291 3600

Copyright
Copyright© 2022, S&P Global. All rights reserved.
Windows® is a registered trademark of Microsoft Corporation.
All other trademarks and service marks, including without limitation

QUE$TOR® belong to IHS Markit Inc. and its affiliated and subsidiary
companies, all rights reserved.
1
This product, including software, data and documentation , is licensed
to the authorized user for its internal business purposes only and no
part thereof may be disclosed, disseminated, sold, licensed, copied,
reproduced, translated, transmitted or transferred to any third party.
All rights reserved.
S&P Global Headquarters.
55 Water Street
New York NY
10041
IHS Markit is now a part of S&P Global.
1Build: 2022-05-19:21:14:09

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Release Notes

QUE$TOR is a registered trademark of IHS Markit.

Windows is a registered trademark of Microsoft

General upgrades in QUE$TOR 2022 Q1 4

Greenhouse gas emissions 4

Onshore flare gas and CO2 emissions updates 5

Offshore wind farm component 6

Offshore power cable enhancements 10

Cost data sources and accuracy 11

Cost data sources 11

Cost database update 13

Russian cost database 14

Oil price trend 15

IHS Markit May 2022 Page 1

Activating standalone licenses 34

Setting network license location 36

Contacting customer support 38

Page 2 May 2022 IHS Markit

All cost databases have been reviewed and updated to incorporate

The technical enhancements made to QUE$TOR 2022 Q1 are outlined

IHS Markit May 2022 Page 3

General upgrades in QUE$TOR 2022 Q1

l Greenhouse gas emissions

Greenhouse gas emissions

The report allows individual activity emissions to be adjusted or

Page 4 May 2022 IHS Markit

Onshore flare gas and CO2 emissions updates

l Operational flaring occurs at the start- up of production wells,

l Production flaring is the intentional flaring of production gas in a

Figure 1 - Flare gas in OPEX Logistics and Consumables

The Flare load line item in the CO 2 emissions section of OPEX is

IHS Markit May 2022 Page 5

As part of this change to manifolding, inputs have been separated into

Offshore wind farm component

A new Offshore wind farm component is now available in QUE$TOR

Page 6 May 2022 IHS Markit

The wind power is provided by floating wind turbines installed on either

l Provide full or partial power to new or existing offshore facilities

l Provide power to grid

l Lower power generation topsides weight and cost by reducing the

l Reduce the total GHG emissions

Figure 2 - Field development schematic of a project including

The Design parameters in the Primary input tab, shown in Figure 3,

IHS Markit May 2022 Page 7

demands ultimately calculate the size and the number of actual

Page 8 May 2022 IHS Markit

Figure 3 - Steps to design the optimal offshore wind farm

IHS Markit May 2022 Page 9

To facilitate electrified topsides we have also extended the maximum

Offshore power cable enhancements

The topsides power distribution weight calculation was also reviewed

Page 10 May 2022 IHS Markit

Cost data sources and accuracy

Cost data sources

l A main source of information is regular interaction with vendors,

l New information and data are provided quarterly by the IHS

l Information exchange with current users is also crucial to the

IHS Markit May 2022 Page 11

l Publications and technical literature are used as additional data