An Estimation of Profitability of Investment Projects in The Oil and Gas Industry Using Real Options Theory / Ocena Opłacalności Projektów Inwestycyjnych W Przemyśle Naftowym Z Wykorzystaniem Teorii Opcji Realnych

2012 ◽  
Vol 57 (2) ◽  
pp. 391-401 ◽  
Author(s):  
Piotr Kosowski ◽  
Jerzy Stopa
Keyword(s):  
Real Options ◽  
Oil And Gas ◽  
Petroleum Industry ◽  
Investment Project ◽  
Oil And Gas Industry ◽  
Gas Industry ◽  
Real Options Theory ◽  
Investment Projects ◽  
New Information ◽  
Options Theory

Abstract Paper discusses issues relating to the valuation of investment efficiency in the oil and gas industry using a real options theory. The example of investment pricing using real options was depicted and it was confronted with the analysis executed with the use of traditional methods. Indicators commonly used to evaluate profitability of investment projects, based on a discounted cash flow method, have a few significant drawbacks, the most meaningful of which is staticity which means that any changes resulting from a decision process during the time of investment cannot be taken into consideration. In accordance with a methodology that is currently used, investment projects are analysed in a way that all the key decisions are made at the beginning and are irreversible. This approach assumes, that all the cash flows are specified and does not let the fact that during the time of investment there may appear new information, which could change its original form. What is also not analysed is the possibility of readjustment, due to staff managment’s decisions, to the current market conditions, by expanding, speeding up/slowing down, abandoning or changing an outline of the undertaking. In result, traditional methods of investment projects valuation may lead to taking wrong decisions, e.g. giving up an owned exploitation licence or untimely liquidation of boreholes, which seem to be unprofitable. Due to all the above-mentioned there appears the necessity of finding some other methods which would let one make real and adequate estimations about investments in a petroleum industry especially when it comes to unconventional resources extraction. One of the methods which has been recently getting more and more approval in a world petroleum economics, is a real options pricing method. A real option is a right (but not an obligation) to make a decision connected with an investment in a specified time or time interval. According to the method a static model of pricing using DCF is no longer used; an investment project is divided into a series of steps and after each one there is a range of possible investment decisions, technical and organizational issues and all the others called ‘real options’. This lets one take many different varieties of modyfiying a strategy while pricing the project. This also makes it possible to react to the changing inner and outer situation and introducing new information while accomplishing the investment project. Owing to those, the decision process is a continuous operation, what is an actual vision of a real investment project management in the petroleum industry.

One Method to Identify the Real Options in the Investment Project

2019 ◽  
Vol 8 (3) ◽  
pp. 35-44
Author(s):  
Inas Nadrus ◽  
Valery Anshin ◽  
Igor Demkin
Keyword(s):  
Real Options ◽  
Present Article ◽  
Oil And Gas ◽  
Investment Project ◽  
Oil And Gas Industry ◽  
Specific Nature ◽  
Gas Industry ◽  
Investment Projects ◽  
Multiple Case ◽  
Multiple Case Studies

The present article describes a research that examines the sources of flexibility in the investment projects in the oil and gas industry using multiple case studies of several oil and gas projects. More precisely, the study is concerned with revealing uncertainties that give rise to real options. Ultimately, the methodology for real options identification in the exploration & development type of investment projects of the oil and gas industry is proposed. It is anticipated that the results might help to bring certain improvements into the existing managerial conception of using real options for investment project evaluation considering the specific nature of investment projects in the oil and gas industry.

scholarly journals Applying Simulation for Oil and Gas Industry Case Albpetrol Company

2018 ◽  
Vol 7 (3) ◽  
pp. 195-198
Author(s):  
Blerta Mjeda
Keyword(s):  
Human Resources ◽  
Oil And Gas ◽  
Investment Project ◽  
Oil And Gas Industry ◽  
International Market ◽  
Good Chance ◽  
Gas Industry ◽  
Investment Projects ◽  
Production Company ◽  
Good Research

Abstract The overall subject for this paper is to enlarge our understanding of simulation behavior while working in investment projects, taking as example the Albpetrol oil production company. An understanding of simulation behavior is essential, since human resources should be regarded as competitive strengths for organizations competing in an international market. The objective of this evaluation is to understand if this investment project has a good chance to be implemented, and to be undertaken as a project, or if the chances are lower. Taking into accountant the importance of oil and gas industry today we should offer the better conditions and better services in order to survive the competition and this is possible if we are doing a good research. For years the company has taken into consideration the possibility of drilling new wells, serving in the existing deposits where it is carrying out its activity. for this purpose, all the data on these deposits have been analyzed and studied, and it has already been concluded that Albpetrol could launch new wells in the fields such as Cakran-Mollaj, Amonice and Patos-Marinze.

Applied Mechanics Problems in the Oil and Gas Industry

1986 ◽  
Vol 39 (11) ◽  
pp. 1687-1696 ◽  
Author(s):  
Jean-Claude Roegiers
Keyword(s):  
Oil And Gas ◽  
Petroleum Industry ◽  
Oil Industry ◽  
Oil And Gas Industry ◽  
Production Equipment ◽  
Paper Briefly ◽  
Research Activity ◽  
Gas Industry ◽  
Well Production ◽  
Current Research Activity

The petroleum industry offers a broad spectrum of problems that falls within the domain of expertise of mechanical engineers. These problems range from the design of well production equipment to the evaluation of formation responses to production and stimulation. This paper briefly describes various aspects and related difficulties with which the oil industry has to deal, from the time the well is spudded until the field is abandoned. It attempts to delineate the problems, to outline the approaches presently used, and to discuss areas where additional research is needed. Areas of current research activity also are described; whenever appropriate, typical or pertinent case histories are used to illustrate a point.

scholarly journals О ФАКТОРАХ ЭФФЕКТИВНОЙ РЕАЛИЗАЦИИ ИНВЕСТИЦИОННЫХ ПРОЕКТОВ

World Science ◽  
2019 ◽  
Vol 3 (5(45)) ◽  
pp. 16-21
Author(s):  
Мирхамидова Д. Н. ◽  
Атаханова Ш. С. ◽  
Соатов Ф. Й.
Keyword(s):  
Oil And Gas ◽  
Oil And Gas Industry ◽  
Successful Implementation ◽  
Gas Industry ◽  
Investment Projects

In article researches on establishment of influence of geological and technology factors on efficiency of investment projects, determination of risks at implementation of investment projects in the oil and gas industry and feature and factors for successful implementation of investment projects are considered.

Navigating the Great Australian Bight using system models

2018 ◽  
Vol 58 (2) ◽  
pp. 553
Author(s):  
Elizabeth A. Fulton ◽  
Cathy M. Bulman ◽  
Simon Goldsworthy
Keyword(s):  
Social Interactions ◽  
Oil And Gas ◽  
Oil And Gas Industry ◽  
Gas Industry ◽  
System Models ◽  
New Information ◽  
New Knowledge ◽  
System Components ◽  
Great Australian Bight ◽  
Future Management

The expanding blue economy means the oil and gas industry is just one of many activities in marine and coastal ecosystems. The future management of ecosystems such as the Great Australian Bight (GAB) should be based on a sound knowledge of the physical, ecological, economic and social interactions among the human and natural system components. The Great Australian Bight Research Program (GABRP) has generated extensive new knowledge about the GAB system, making it one of the most well understood deep-water Australian ecosystems. It is a complicated system, with novel and newly recognised ecosystem pathways. A set of system models have been developed to help navigate this complexity, to integrate the new information and establish improved understanding of system processes and the implications of any activities in the region – including monitoring and management.

A Comprehensive Review of the Fourth Industrial Revolution IR 4.0 in Oil and Gas Industry

2021 ◽  
Author(s):  
Cenk Temizel ◽  
Celal Hakan Canbaz ◽  
Hakki Aydin ◽  
Bahar F. Hosgor ◽  
Deniz Yagmur Kayhan ◽  
...  
Keyword(s):  
Industry 4.0 ◽  
Industrial Revolution ◽  
Oil And Gas ◽  
Petroleum Industry ◽  
Oil And Gas Industry ◽  
Learning Technologies ◽  
Real Field ◽  
Gas Industry ◽  
History Of ◽  
History Of Use

Abstract Digital transformation is one of the most discussed themes across the globe. The disruptive potential arising from the joint deployment of IoT, robotics, AI and other advanced technologies is projected to be over $300 trillion over the next decade. With the advances and implementation of these technologies, they have become more widely-used in all aspects of oil and gas industry in several processes. Yet, as it is a relatively new area in petroleum industry with promising features, the industry overall is still trying to adapt to IR 4.0. This paper examines the value that Industry 4.0 brings to the oil and gas upstream industry. It delineates key Industry 4.0 solutions and analyzes their impact within this segment. A comprehensive literature review has been carried out to investigate the IR 4.0 concept's development from the beginning, the technologies it utilizes, types of technologies transferred from other industries with a longer history of use, robustness and applicability of these methods in oil and gas industry under current conditions and the incremental benefits they provide depending on the type of the field are addressed. Real field applications are illustrated with applications indifferent parts of the world with challenges, advantages and drawbacks discussed and summarized that lead to conclusions on the criteria of application of machine learning technologies.

BIOCHEMICAL AND CHEMICAL PARAMETERS FOR AQUATIC ECOSYSTEM HEALTH ASSESSMENTS ADAPTED TO THE AUSTRALIAN OIL AND GAS INDUSTRY

1999 ◽  
Vol 39 (1) ◽  
pp. 584 ◽  
Author(s):  
M.M. Gagnon ◽  
K. Grice ◽  
R.I. Kagi
Keyword(s):  
Environmental Health ◽  
Biochemical Markers ◽  
Oil And Gas ◽  
Petroleum Industry ◽  
Oil And Gas Industry ◽  
Marine Organisms ◽  
Chemical Markers ◽  
Gas Industry ◽  
Chemical Measurements ◽  
The Impact

Field assessments using biochemical and chemical markers in marine organisms will be necessary to provide the Australian Petroleum Industry with a realistic evaluation of the impact of their activities on the marine environment. In field investigations, wild or caged animals are sacrificed and their organs are collected in order to assess if industrial activities do have a significant adverse impact on the organisms' health. Biochemical markers of chronic exposure to contamination may include reversible effects such as induction of a detoxification system, or permanent effects such as damage to nuclear DN A. Studies of sentinel species using biochemical markers of exposure, complemented by chemical analyses provide a realistic holistic method for assessment of environmental health. This multidisciplinary approach has proven valuable in Europe and North America.This paper outlines the need for biochemical and chemical markers to assess environmental health in a dynamic milieu such as the North West Shelf of Australia. Selected biochemical markers for use by the oil and gas industry in field monitoring of ecological health, and the complementary chemical measurements focussed on persistent contaminants such as poly eye lie aromatic hydrocarbons (PAHs), are described. The biological and ecotoxicological significance of the biochemical markers applied in sentinel marine organisms is reviewed, and some limitations regarding their interpretation are stated. It is suggested that biochemical monitoring of the environment complemented with sophisticated chemical measurements can provide environmental managers working within the oil and gas industry with a system for ecotoxicological monitoring programs in offshore Australia.

Revisiting the FPSO São Mateus Accident From a Human Reliability Perspective Using Phoenix HRA Methodology

2020 ◽  
Author(s):  
Marilia A. Ramos ◽  
Alex Almeida ◽  
Marcelo R. Martins
Keyword(s):  
Human Error ◽  
Oil And Gas ◽  
Risk Estimation ◽  
Petroleum Industry ◽  
Oil And Gas Industry ◽  
Qualitative Assessment ◽  
Human Reliability ◽  
Human Reliability Analysis ◽  
Human Errors ◽  
Gas Industry

Abstract Several incidents in the offshore oil and gas industry have human errors among core events in incident sequence. Nonetheless, human error probabilities are frequently neglected by offshore risk estimation. Human Reliability Analysis (HRA) allows human failures to be assessed both qualitatively and quantitatively. In the petroleum industry, HRA is usually applied using generic methods developed for other types of operation. Yet, those may not sufficiently represent the particularities of the oil and gas industry. Phoenix is a model-based HRA method, designed to address limitations of other HRA methods. Its qualitative framework consists of three layers of analysis composed by a Crew Response Tree, a human response model, and a causal model. This paper applies a version of Phoenix, the Phoenix for Petroleum Refining Operations (Phoenix-PRO), to perform a qualitative assessment of human errors in the CDSM explosion. The CDSM was a FPSO designed to produce natural gas and oil to Petrobras in Brazil. On 2015 an explosion occurred leading to nine fatalities. Analyses of this accident have indicated a strong contribution of human errors. In addition to the application of the method, this paper discusses its suitability for offshore operations HRA analyses.

scholarly journals Multiphase Flow Effects in a Horizontal Oil and Gas Separator

Energies ◽  
2019 ◽  
Vol 12 (11) ◽  
pp. 2116 ◽  
Author(s):  
Michael Frank ◽  
Robin Kamenicky ◽  
Dimitris Drikakis ◽  
Lee Thomas ◽  
Hans Ledin ◽  
...  
Keyword(s):  
Oil And Gas ◽  
Petroleum Industry ◽  
Oil And Gas Industry ◽  
Fluid Mixture ◽  
Gas Industry ◽  
Liquid Phases ◽  
Industry Applications ◽  
Computational Fluid Dynamics Cfd ◽  
Gas Separator ◽  
Flow Effects

An oil and gas separator is a device used in the petroleum industry to separate a fluid mixture into its gaseous and liquid phases. A computational fluid dynamics (CFD) study aiming to identify key design features for optimising the performance of the device, is presented. A multiphase turbulent model is employed to simulate the flow through the separator and identify flow patterns that can impinge on or improve its performance. To verify our assumptions, we consider three different geometries. Recommendations for the design of more cost- and energy-effective separators, are provided. The results are also relevant to broader oil and gas industry applications, as well as applications involving stratified flows through channels.

scholarly journals Accelerating geothermal development with a play-based portfolio approach

2020 ◽  
Vol 99 ◽  
Author(s):  
Jan Diederik van Wees ◽  
Hans Veldkamp ◽  
Logan Brunner ◽  
Mark Vrijlandt ◽  
Sander de Jong ◽  
...  
Keyword(s):  
The Netherlands ◽  
Oil And Gas ◽  
Oil And Gas Industry ◽  
Added Value ◽  
Gas Industry ◽  
New Information ◽  
Geothermal Potential ◽  
Heat Demand ◽  
Exploration Risk ◽  
Portfolio Approach

Abstract Over the past decade in the Netherlands, most operators have only developed a single doublet. The learning effect from these single events is suboptimal, and operators have only been capable of developing doublets in areas with relatively low exploration risk. This ‘stand-alone’ approach can be significantly improved by a collective approach to derisk regions with similar subsurface characteristics. Such a play-based portfolio approach, which is common in the oil and gas industry, can help to accelerate the development of the geothermal industry through unlocking resource potential in areas marked by high upfront geological risk, effectively helping reduce costs for the development. The basis of the methodology is to deploy new information to the play portfolio by trading off with the risk of the first wells, resulting in a strong geological risk reduction. The added value of the portfolio approach is demonstrated for the Netherlands in this paper through a comparison with a ‘stand-alone’ development. In the stand-alone approach, each new project will be equally risky, and therefore relatively unprofitable. In the case of a portfolio approach, all experience about the play is used optimally for derisking. In case of success, subsequent projects will have a higher chance of being successful, due to the experience gained in previous projects. Even if a project fails, this may help in increasing the probability of success for subsequent projects. For plays that are initially considered too risky for the market to start developing, the value of information (VoI) of a play-based portfolio approach will help by derisking the play to such an extent that it becomes attractive for the market to develop, even at high initial risk. It can be demonstrated for several geothermal plays in the Netherlands that by adopting the portfolio approach, the probability of a play being developed becomes higher, the number of successfully developed projects increases and the average profitability of the project will also be higher. Five more advantages are: (1) continuous improvement by integrated project development, (2) cost reduction through synergy, efficiency and standardisation, (3) optimisation of the surface heat demand and infrastructure, (4) the possibility of structural research and development (R&D) and innovation, and (5) financing advantages. The advantages reinforce each other. A preliminary estimate of the geothermal potential of the Netherlands adopting the portfolio approach is between 90 and 275 Petajoules (PJ). For about 350 doublets being developed, producing about 70 PJ, the value of the advantage of the play-based portfolio approach is €2 billion for the three main plays: Rotliegend, Triassic and Jurassic/Cretaceous. The learning effects of synergy, efficiency and standardisation are expected to be significant.

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