A condition assessment rating tool during life extension is vital for evaluating present health status of an existing structure to facilitate decision-making. In this paper, a Condition Index Matrix methodology is proposed to justify safe continuous operation of critical assets during life extension phase within the offshore oil and gas industry. The method establishes an index called Condition Index to determine the present health status of equipment for technical justification of life extension. It combines risk assessment factors and condition indicators to produce a decision matrix. Weights are assigned to these factors through experienced field experts and literature. These weights are determined based on the severity of factors to equipment condition and risk. The weights can be modified based on particular experience of experts and the available data. Overall condition index is then calculated based on the weighted sum of the individual condition indicators. The condition index is plotted on a matrix to interpret the condition of equipment. The effectiveness of the proposed methodology is demonstrated through a case study for an oil and gas separation system on a platform. The proposed methodology can be widely applied in areas such as evaluation of life extension process, selection of end of service life scenarios, probabilistic safety assessment, and risk-informed regulations. The paper further compares the condition index matrix with aging modelling to establish its strength and weakness.