The Welsh region, the reigning Magners League champions, face the 2009 champions at Thomond Park on Saturday.
But having watched the Ospreys clinch the Celtic Crown in Dublin last year, O'Connell knows in no uncertain terms that the Swansea-based region have what it take to triumph in Limerick.
"They're a very experienced side," O'Connell told the BBC.
"They're well able to win at home and are well able to go away from home and produce big performance and wins. We're well aware of that and it adds to the challenge for us."
It will be the fifth occasion the two have clashed this season, with Munster leading with three wins to the Ospreys' one.
"We play each other so often, internationally, in the Magners League and obviously in the Heineken Cup this year that we know each other inside out," added O'Connell.
"There probably won't be a lot of analysis to do for the coaches because it will all have been done in the past.
"We know them very well. They're a very strong squad and it will be a very tough game for us and for them.
"They'll be disappointed with their Heineken Cup form and maybe some of their Magners League form as well towards the end of the year.
"We're both in the semi-finals now and it's knockout rugby and all to play for.
"We want to finish with something in the trophy cabinet after a disappointing year last year and obviously a disappointing run in the Heineken Cup.
"The Magners League is of massive importance to us. It's the last competition we're in and we're playing at home which makes it very important as well.
"The Magners League has grown in stature year on year and the play-offs have made it a very important and interesting competition.
"It's made the last few games of the season very interesting for supporters and players alike."
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