Crystal balls and current affairs: the financial challenge of a changing climate to the oil and gas industry

2015 ◽  
Vol 55 (2) ◽  
pp. 490
Author(s):  
Adam Davis
Keyword(s):  
Large Scale ◽  
Ad Hoc ◽  
Climate Models ◽  
Oil And Gas ◽  
Insurance Industry ◽  
Cost Effective ◽  
Oil And Gas Industry ◽  
Capital Allocation ◽  
Risk Transfer ◽  
Changing Climate

Despite debate, the fact remains that the climate is changing. When considering the factors that determine potential financial impacts and losses that upstream oil and gas business could suffer due to a changing climate, the issues may primarily appear to be related to weather and geography. On closer examination, the factors that determine the severity of the impacts and losses are largely determined by the design and interdependencies of the financial and economic mechanisms of risk management. There is an increasing consensus in the insurance industry that the challenge presented by climate change, along with the increasing power of climate models, will result in far-reaching changes to the presently accepted practices of risk transfer. This extended abstract describes the increased power of climate models and the improved understanding of the present levels of under-adaptation when viewed from the position of investors in large-scale and long-lived oil and gas assets in Australia. It then looks at risk transfer models and examines potential limitations that have been identified due to the focus on ad-hoc post-disaster recovery when compared to a cost-effective pre-disaster resilience approach. The extended abstract then discusses how changes in the risk transfer approach could affect the financial aspects of an oil and gas business, such as the cost of borrowing, self-insurance, capital allocation and planning.

scholarly journals Sharing Risk – An Economic Perspective

2009 ◽  
Vol 39 (2) ◽  
pp. 591-613 ◽  
Author(s):  
Andreas Kull
Keyword(s):  
Value At Risk ◽  
Risk Sharing ◽  
Risk Measures ◽  
Insurance Industry ◽  
Risk Measure ◽  
Capital Allocation ◽  
Risk Capital ◽  
Risk Class ◽  
Capital Costs ◽  
Risk Transfer

AbstractWe revisit the relative retention problem originally introduced by de Finetti using concepts recently developed in risk theory and quantitative risk management. Instead of using the Variance as a risk measure we consider the Expected Shortfall (Tail-Value-at-Risk) and include capital costs and take constraints on risk capital into account. Starting from a risk-based capital allocation, the paper presents an optimization scheme for sharing risk in a multi-risk class environment. Risk sharing takes place between two portfolios and the pricing of risktransfer reflects both portfolio structures. This allows us to shed more light on the question of how optimal risk sharing is characterized in a situation where risk transfer takes place between parties employing similar risk and performance measures. Recent developments in the regulatory domain (‘risk-based supervision’) pushing for common, insurance industry-wide risk measures underline the importance of this question. The paper includes a simple non-life insurance example illustrating optimal risk transfer in terms of retentions of common reinsurance structures.

Nanoemulsions: A Versatile Technology for Oil and Gas Applications

2021 ◽  
Author(s):  
Nouf AlJabri ◽  
Nan Shi
Keyword(s):  
Droplet Size ◽  
Large Scale ◽  
Oil And Gas ◽  
Volume Fraction ◽  
Oil Industry ◽  
Oil And Gas Industry ◽  
High Energy ◽  
Small Droplet ◽  
Gas Industry ◽  
Wide Range

Abstract Nanoemulsions (NEs) are kinetically stable emulsions with droplet size on the order of 100 nm. Many unique properties of NEs, such as stability and rheology, have attracted considerable attention in the oil industry. Here, we review applications and studies of NEs for major upstream operations, highlighting useful properties of NEs, synthesis to render these properties, and techniques to characterize them. We identify specific challenges associated with large-scale applications of NEs and directions for future studies. We first summarize useful and unique properties of NEs, mostly arising from the small droplet size. Then, we compare different methods to prepare NEs based on the magnitude of input energy, i.e., low-energy and high-energy methods. In addition, we review techniques to characterize properties of NEs, such as droplet size, volume fraction of the dispersed phase, and viscosity. Furthermore, we discuss specific applications of NEs in four areas of upstream operations, i.e., enhanced oil recovery, drilling/completion, flow assurance, and stimulation. Finally, we identify challenges to economically tailor NEs with desired properties for large-scale upstream applications and propose possible solutions to some of these challenges. NEs are kinetically stable due to their small droplet size (submicron to 100 nm). Within this size range, the rate of major destabilizing mechanisms, such as coalescence, flocculation, and Ostwald ripening, is considerably slowed down. In addition, small droplet size yields large surface-to-volume ratio, optical transparency, high diffusivity, and controllable rheology. Similar to applications in other fields (food industry, pharmaceuticals, cosmetics, etc.), the oil and gas industry can also benefit from these useful properties of NEs. Proposed functions of NEs include delivering chemicals, conditioning wellbore/reservoir conditions, and improve chemical compatibility. Therefore, we envision NEs as a versatile technology that can be applied in a variety of upstream operations. Upstream operations often target a wide range of physical and chemical conditions and are operated at different time scales. More importantly, these operations typically consume a large amount of materials. These facts not only suggest efforts to rationally engineer properties of NEs in upstream applications, but also manifest the importance to economically optimize such efforts for large-scale operations. We summarize studies and applications of NEs in upstream operations in the oil and gas industry. We review useful properties of NEs that benefit upstream applications as well as techniques to synthesize and characterize NEs. More importantly, we identify challenges and opportunities in engineering NEs for large-scale operations in different upstream applications. This work not only focuses on scientific aspects of synthesizing NEs with desired properties but also emphasizes engineering and economic consideration that is important in the oil industry.

Implementations

2019 ◽  
pp. 180-190
Keyword(s):  
Large Scale ◽  
Process Management ◽  
Oil And Gas ◽  
Oil And Gas Industry ◽  
Organizational Structures ◽  
Gas Industry ◽  
Analysis Process ◽  
Petroleum Companies ◽  
Market Factors ◽  
Potential Methods

The distinctive feature of petroleum businesses is its wide scope. After crude oil or gas extraction, resulting semi-products undergo dozens of transformation stages in supply chains to reach the final customer. Combination of quantity and quality multiplied by external market factors produce price fluctuations that are challenging for world economics. In this regard process management might be carried out to improve supply chain performance and assure the maximum business predictability. However, for such large-scale organizations it requires big effort in operational analysis, process enhancement and process control via information systems which successfully support traditional management in function-oriented organizational structures. This chapter explores the developed engineering matrix that embraces potential methods and tools applicable for oil and gas industry. Additionally, it reveals industrial peculiarities and delivers case studies about Iranian and Hungarian petroleum companies.

scholarly journals Proper Use of Technical Standards in Offshore Petroleum Industry

2020 ◽  
Vol 8 (8) ◽  
pp. 555 ◽  
Author(s):  
Dejan Brkić ◽  
Pavel Praks
Keyword(s):  
Large Scale ◽  
Oil And Gas ◽  
Petroleum Industry ◽  
Health And Safety ◽  
Oil And Gas Industry ◽  
European Economic Area ◽  
The European Union ◽  
Technical Standards ◽  
The North ◽  
Offshore Petroleum

Ships for drilling need to operate in the territorial waters of many different countries which can have different technical standards and procedures. For example, the European Union and European Economic Area EU/EEA product safety directives exclude from their scope drilling ships and related equipment onboard. On the other hand, the EU/EEA offshore safety directive requires the application of all the best technical standards that are used worldwide in the oil and gas industry. Consequently, it is not easy to select the most appropriate technical standards that increase the overall level of safety and environmental protection whilst avoiding the costs of additional certifications. We will show how some technical standards and procedures, which are recognized worldwide by the petroleum industry, can be accepted by various standardization bodies, and how they can fulfil the essential health and safety requirements of certain directives. Emphasis will be placed on the prevention of fire and explosion, on the safe use of equipment under pressure, and on the protection of personnel who work with machinery. Additionally considered is how the proper use of adequate procedures available at the time would have prevented three large scale offshore petroleum accidents: the Macondo Deepwater Horizon in the Gulf of Mexico in 2010; the Montara in the Timor Sea in 2009; the Piper Alpha in the North Sea in 1988.

How to avoid aches and pains in your joint ventures

2016 ◽  
Vol 56 (2) ◽  
pp. 559
Author(s):  
Brent Steedman
Keyword(s):  
Joint Ventures ◽  
Joint Venture ◽  
Oil And Gas ◽  
Cost Savings ◽  
Oil And Gas Industry ◽  
Capital Allocation ◽  
Operating Efficiency ◽  
Global Business ◽  
Gas Industry ◽  
The Right

The Australian oil and gas industry is in a period of substantial challenges, including a significant decline in oil prices, fluctuating spot gas prices, a relentless drive for operating efficiency, and tight capital allocation, together with increased regulatory scrutiny and a reputation for below-standards productivity. On the upside, these market challenges provide significant opportunities for companies to bring in new investors, implement new operating models, apply innovation to update processes and practices, and restructure activities. Making material step-changes, requires companies to review, amend, and update joint venture operating agreements (JVOAs). KPMG has worked with many of Australia’s leading oil and gas companies on a range of joint venture engagements. This extended abstract outlines why JVOAs need to be reviewed with respect to the following key opportunities and challenges: Fast-changing global business operating models. Available cost savings by eliminating inconsistent management and operating models between joint ventures. Planning for potential restructuring, including separation of infrastructure (e.g. plants, pipelines, support) from reserve ownership. Sharing of services (e.g. maintenance and logistics) between unrelated joint ventures. Transparency of costs and asset performance. Improved joint venture governance (not more or over-governance) between participants to attract investment. Effective resourcing, noting the right transition of capabilities between deal-makers and joint venture operators. With this extended abstract the authors aim to provide ideas for consideration. Each of these ideas will impact JVOAs. The authors’ proposition is that now is the right time to complete a comprehensive review of JVOAs to enable organisations to move fast as new and innovative opportunities arise.

Advances from Arctic Oil Spill Response Research

2017 ◽  
Vol 2017 (1) ◽  
pp. 1487-1506 ◽  
Author(s):  
Joseph V. Mullin
Keyword(s):  
Oil Spill ◽  
Large Scale ◽  
Oil And Gas ◽  
Field Tests ◽  
Field Research ◽  
Oil And Gas Industry ◽  
The Arctic ◽  
Research Projects ◽  
Effective Response ◽  
Oil Spill Response

Abstract 2017-161 Over the past four decades, the oil and gas industry has made significant advances in being able to detect, contain and clean up spills and mitigate the residual consequences in Arctic environments. Many of these advances were achieved through collaborative research programs involving industry, academic and government partners. The Arctic Oil Spill Response Technology - Joint Industry Programme (JIP), was launched in 2012 and completed in early 2017 with the objectives of building on an already extensive knowledge base to further improve Arctic spill response capabilities and better understand the environmental issues involved in selecting and implementing the most effective response strategies. The JIP was a collaboration of nine oil and gas companies (BP, Chevron, ConocoPhillips, Eni, ExxonMobil, North Caspian Operating Company, Shell, Statoil, and Total) and focused on six key areas of oil spill response: dispersants; environmental effects; trajectory modeling; remote sensing; mechanical recovery and in-situ burning. The JIP provided a vehicle for sharing knowledge among the participants and international research institutions and disseminating information to regulators, the public and stakeholders. The network of engaged scientists and government agencies increased opportunities to develop and test oil spill response technologies while raising awareness of industry efforts to advance the existing capabilities in Arctic oil spill response. The JIP consisted of two phases, the first included technical assessments and state of knowledge reviews resulting in a library of sixteen documents available on the JIP website. The majority of the JIP efforts focused on Phase 2, actual experiments, and included laboratory, small and medium scale tank tests, and field research experiments. Three large-scale field tests were conducted in the winter and spring months of 2014–2016 including recent participation of the JIP in the 2016 NOFO oil on water exercise off Norway. The JIP was the largest pan-industry programme dedicated to oil spill response in the Arctic, ever carried out. Twenty seven research projects were successfully and safely conducted by the world’s foremost experts on oil spill response from across industry, academia, and independent scientific institutions in ten countries. The overarching goal of the research was to address the differing aspects involved in oil spill response, including the methods used, and their applicability to the Arctic’s unique conditions. All research projects were conducted using established protocols and proven scientific technologies, some of which were especially adjusted for ice conditions. This paper describes the scope of the research conducted, results, and key findings. The JIP is committed to full transparency in disseminating the results through peer reviewed journal articles, and all JIP research reports are available free of charge at www.arcticresponsetechnology.org.

Knowledge Learning of Insurance Risks Using Dependence Models

2020 ◽  
Author(s):  
Zifeng Zhao ◽  
Peng Shi ◽  
Xiaoping Feng
Keyword(s):  
Large Scale ◽  
Predictive Analytics ◽  
Insurance Industry ◽  
Spatial Association ◽  
Capital Allocation ◽  
Risk Profile ◽  
Composite Likelihood ◽  
Multiple Sources ◽  
Property Insurance ◽  
Dependence Models

Learning the customers’ experience and behavior creates competitive advantages for any company over its rivals. The insurance industry is an essential sector in any developed economy and a better understanding of customers’ risk profile is critical to decision making in all aspects of insurance operations. In this paper, we explore the idea of using copula-based dependence models to learn the hidden risk of policyholders in property insurance. Specifically, we build a novel copula model to accommodate the dependence over time and over space among spatially clustered property risks. To tackle the computational challenge caused by the discreteness feature of large-scale insurance data, we propose an efficient multilevel composite likelihood approach for parameter estimation. Provided that latent risk induces correlation, the proposed customer learning method offers improved predictive analytics by allowing insurers to borrow strength from related risks in predicting new risks and also helps reveal the relative importance of the multiple sources of unobserved heterogeneity in updating policyholders’ risk profile. In the empirical study, we examine the loss cost of a portfolio of entities insured by a government property insurance program in Wisconsin. We find both significant temporal and spatial association among property risks. However, their effects on the predictive distribution of loss cost are different for the new and renewal policyholders. The two sources of dependence are complements for the former and substitutes for the latter. These findings are shown to have substantial managerial implications in key insurance operations such as experience rating, capital allocation, and reinsurance arrangement.

Organizational climate in large-scale projects in the oil and gas industry: A competing values perspective

2014 ◽  
Vol 32 (4) ◽  
pp. 687-697 ◽  
Author(s):  
Martine B. Hannevik ◽  
Jon Anders Lone ◽  
Roald Bjørklund ◽  
Cato Alexander Bjørkli ◽  
Thomas Hoff
Keyword(s):  
Organizational Climate ◽  
Large Scale ◽  
Oil And Gas ◽  
Oil And Gas Industry ◽  
Competing Values ◽  
Gas Industry

Small-Scale FE Modelling for the Analysis of Flexible Risers

2015 ◽  
Author(s):  
M. T. Rahmati ◽  
G. Alfano ◽  
H. Bahai
Keyword(s):  
Boundary Conditions ◽  
Large Scale ◽  
Oil And Gas ◽  
Oil And Gas Industry ◽  
Small Scale ◽  
Fe Model ◽  
Fe Modelling ◽  
Sequential Approach ◽  
Multi Scale ◽  
Flexible Risers

Flexible risers which are used for transporting oil and gas between the seabed and surface in ultra-deep waters have a very complex internal structure. Therefore, accurate modeling of their behaviour is a great challenge for the oil and gas industry. Constitutive laws based on beam models which allow the large-scale dynamics of pipes to be related to the behaviour of its internal components can be used for multi-scale analysis of flexible risers. An integral part of these models is the small-scale FE model chosen and the detailed implementation of the boundary conditions. The small scale FE analyses are typically carried out on models of up to a few meters length. The computational requirements of these methods limit their applications for only multi-scale structural analysis based on a sequential approach. For nested multi-scale approaches (i.e. the so called FE2 method) and for multi-scale multi-physic analyses, e.g. fluid structure interaction modeling of flexible risers, more efficient methods are required. The emphasis of the present work is on a highly efficient small-scale modelling method for flexible risers. By applying periodic boundary conditions, only a small fraction of a flexible pipe is used for detailed analysis. The computational model is firstly described. Then, the capability of the method in capturing the detailed nonlinear effects and the great advantage in terms of significant CPU time saving entailed by this method are demonstrated. For proof of concept the approach is applied on a simplified 3-layer pipe made of inner and outer polymer layers and an intermediate armour layer made of 40 steel tendons.

scholarly journals Characterization and Treatment Technologies Applied for Produced Water in Qatar

Water ◽  
2021 ◽  
Vol 13 (24) ◽  
pp. 3573
Author(s):  
Hana D. Dawoud ◽  
Haleema Saleem ◽  
Nasser Abdullah Alnuaimi ◽  
Syed Javaid Zaidi
Keyword(s):  
Natural Gas ◽  
Oil And Gas ◽  
Produced Water ◽  
Cost Effective ◽  
Oil And Gas Industry ◽  
Gas Industry ◽  
Treatment Techniques ◽  
Treatment Technologies ◽  
Oil Gas

Qatar is one of the major natural gas (NG) producing countries, which has the world’s third-largest NG reserves besides the largest supplier of liquefied natural gas (LNG). Since the produced water (PW) generated in the oil and gas industry is considered as the largest waste stream, cost-effective PW management becomes fundamentally essential. The oil/gas industries in Qatar produce large amounts of PW daily, hence the key challenges facing these industries reducing the volume of PW injected in disposal wells by a level of 50% for ensuring the long-term sustainability of the reservoir. Moreover, it is important to study the characteristics of PW to determine the appropriate method to treat it and then use it for various applications such as irrigation, or dispose of it without harming the environment. This review paper targets to highlight the generation of PW in Qatar, as well as discuss the characteristics of chemical, physical, and biological treatment techniques in detail. These processes and methods discussed are not only applied by Qatari companies, but also by other companies associated or in collaboration with those in Qatar. Finally, case studies from different companies in Qatar and the challenges of treating the PW are discussed. From the different studies analyzed, various techniques as well as sequencing of different techniques were noted to be employed for the effective treatment of PW.

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