Oil Project Selection by Metrics

Oil Project Selection by Metrics

Although the resources of geothermal energy in Ukraine greatly exceed domestic conventional energy sources, using geothermal heat in the country is still far behind the existing opportunities. Addressing this gap requires a large-scale pre-feasibility assessment with proper account for hydrogeological and economic factors to facilitate identifying the most promising areas of the country for efficient use of geothermal energy. One of the well-known technologies in this field is a geothermal well system (GWS) that combines pumping out thermal waters, extracting heat on the ground, and reinjecting cooled water back to the aquifer. In this study, we created the maps of expected thermal output and profitability of the doublet GWS across Ukraine for minimum and maximum values of depth and flow rate of thermal waters applying analytical methods of heat transfer in saturated rocks in combination with the net present value (NPV) as a generally accepted economic criterion. Map analysis showed that the GWS maximum expected thermal output might reach 5–9 MW in the Black Sea coastal area and steppe Crimea at the flow rate exceeding 1500 m3/day and aquifer depth of 2 km and more. The NPV index is positive for the most part of Ukraine and increases up to 7–17 million € in southern regions of the country. Calculating performance parameters for two potential GWS sites showed a higher thermal output for a GWS in the Black Sea coastal area compared to the site in Transcarpathia but comparable NPV for both sites due to lower installation costs in the western part of the country.

This paper attempts to systematize factors of the fall in the global oil price in 2014 and discusses potential trajectories of its further dynamics. Examining the effects of supply and demand on the market, similarities are drawn with the fall in the oil price in 1986.

Petroleum Tax Competition Subject to Capital Rationing

The price of oil: Lower and upper bounds

Recent data suggests that the global growth cycle has probably peaked. We forecast world GDP growth of around 3.5 per cent a year over the next two years.On that basis, the second decade of the 21st century will have seen sustained global GDP growth.Tariff increases and trade disputes seem likely to act as a drag on the global economic outlook, with a bias towards slower growth as a consequence.Despite faster wage growth in advanced economies, the recent fall in oil prices has reduced the risks of inflation overshooting targets. We expect central banks to reduce monetary accommodation very gradually.

Meeting challenges of the oil industry

BackgroundAlcohol-to-jet (ATJ) is one of the technical feasible biofuel technologies. It produces jet fuel from sugary, starchy, and lignocellulosic biomass, such as sugarcane, corn grain, and switchgrass, via fermentation of sugars to ethanol or other alcohols. This study assesses the ATJ biofuel production pathway for these three biomass feedstocks, and advances existing techno-economic analyses of biofuels in three ways. First, we incorporate technical uncertainty for all by-products and co-products though statistical linkages between conversion efficiencies and input and output levels. Second, future price uncertainty is based on case-by-case time-series estimation, and a local sensitivity analysis is conducted with respect to each uncertain variable. Third, breakeven price distributions are developed to communicate the inherent uncertainty in breakeven price. This research also considers uncertainties in utility input requirements, fuel and by-product outputs, as well as price uncertainties for all major inputs, products, and co-products. All analyses are done from the perspective of a private firm.ResultsThe stochastic dominance results of net present values (NPV) and breakeven price distributions show that sugarcane is the lowest cost feedstock over the entire range of uncertainty with the least risks, followed by corn grain and switchgrass, with the mean breakeven jet fuel prices being $0.96/L ($3.65/gal), $1.01/L ($3.84/gal), and $1.38/L ($5.21/gal), respectively. The variation of revenues from by-products in corn grain pathway can significantly impact its profitability. Sensitivity analyses show that technical uncertainty significantly impacts breakeven price and NPV distributions.ConclusionsTechnical uncertainty is critical in determining the economic performance of the ATJ fuel pathway. Technical uncertainty needs to be considered in future economic analyses. The variation of revenues from by-products plays a significant role in profitability. With the distribution of breakeven prices, potential investors can apply whatever risk preferences they like to determine an appropriate bid or breakeven price that matches their risk profile.

This paper presents a comparative analysis of the use of two methods, Risk Adjusted Discount Rate (RADR) and Monte Carlo Simulation, in evaluating the risks and uncertainties in an oil and gas investment proposal. Basically, RADR method is the same as the usual discounted cash flow. But the discount rate already considers any risk/uncertainty that a project will face. Thus, some percentage, based on trusted publisher, will be added to the discount rate. While using monte carlo simulation, an economic model, with base discount rate, will be evaluated by creating hundreds of possible iterations that continually change the major economic assumption based on historical data such as production, capital expenditure, operating expenditure, oil and gas price. The purpose of this paper is to compare the use of two methods, RADR and Historical-Based Monte Carlo Simulation in evaluating risk/uncertainty in oil and gas investment proposal. There are four real oil and gas projects which will be evaluated: Project 1 (Gas Development Project), Project 2 (Shallow Water Development Project), Project 3 (Offshore Development Project), and Project 4 (EOR Development Project). The Net Present Value (NPV) of each project with those two methods will be evaluated and analyzed. The comparison study shows that NPV Calculation with Historical-Based Monte Carlo Simulation tend to have higher NPV. This is important to maintain the level of project attractiveness. Historical Based Monte Carlo Simulation method also shows the real risks and uncertainties because it is based on the historical data. Besides, this method gives real picture of what the project might face in the future instead of allowing static variables to be introduced into potential dynamic model. However, to make Historical-Based Monte Carlo Simulation robust, complete historical database is needed. While, Risk Adjusted Discount Rate method can simply be used by trusted publication.

Last year, the unexpectedly slow growth of output in the world economy, and of trade relative to it, reinforced doubts as to whether developing countries would recover from their depression and financing crisis. Since then, the fall in oil prices has altered substantially the outlook for industrial countries. The process of re-examining the prospects for developing countries has scarcely begun.This note describes developments in their trade and financing over the past five years, since the second oil price rise, as background to the judgement that the trends expected previously would have been economically and politically impossible to sustain. It then assesses the prospect now—after the fall in oil prices.

This paper aims to simulate and evaluate the impacts of increases and decreases in oil price on industrial sectors in China. We develop an oil-economy computable general equilibrium (OE-CGE) model with crude oil as an important factor in production. The transmission mechanism of crude oil price swings to various industrial sectors is described in the model. We calibrate parameters in the model parameters using input-output data. In addition, we simulate the rise and fall of oil prices in the model and assess the impact of crude oil prices on various industrial sectors. The results show that crude oil price changes have the greatest impact on the output and consumption of crude oil and gas extraction products sector, crude oil refined coke products, and processed nuclear fuel products sector. The investment of public utilities sector is the most sensitive to changes in crude oil price. When the price of crude oil changes, its investment drops significantly. Crude oil price stability is extremely important for investment and output stability in all sectors.

There are currently two fiscal regimes designated for resource allocation in Indonesia’s upstream oil and gas industry, the Production Sharing Contract Cost Recovery (PSC) and Gross Split. The Gross Split in the form of additional percentage split is designed to encourage contractors to implement Enhanced Oil Recovery (EOR) in mature fields. Low Salinity Water Injection (LSWI) is an emerging EOR technique in which the salinity of the injected water is controlled. It has been proven to be relatively cheaper and has simpler implementations than other EOR options in several countries. This study evaluates the LSWI project’s economy using PSC and Gross Split and then to be compared to conventional waterflooding (WF) project’s economy. There are four cases on Field X that are simulated using a commercial simulator for 5 years. The cases are evaluated under PSC and Gross Split to calculate the project’s economy. The economic indicators that will be evaluated are the Net Present Value (NPV) and sensitivity analysis is also conducted to observe the change of NPV. The parameters for sensitivity analysis are Capital Expenditure (CAPEX), Operating Expenditure (OPEX), Oil Production, and Oil Price. It is found that LSWI implementation using Gross Split is more profitable than PSC. The parameters that affects NPV the most in all PSC cases are the oil production and oil price. On the other hand, in Gross Split cases, the oil production is the parameter that affects NPV the most, followed by oil price. The novelty of this study is in the comparison of project’s economy between WF and LSWI using two different fiscal regimes to see whether Gross Split is more profitable than PSC on EOR implementation, specifically the LSWI at Field X.

Net metering rolling credits vs. net billing buyback: An economic analysis of a policy option proposal for photovoltaic prosumers

Responses of monetary policies to oil price changes in Malaysia

Iran–US relations – strained at the best of times since the 1979 Iranian revolution – have never been worse than during the past six years, due to the much more intense interaction between the two ...