HOW TO EVALUATE EXPLORATION PROSPECTS

Geophysics ◽  
1964 ◽  
Vol 29 (3) ◽  
pp. 434-444 ◽  
Author(s):  
Ben F. Rummerfield ◽  
Norman S. Morrisey
Keyword(s):  
Oil And Gas ◽  
Dominant Role ◽  
The United States ◽  
Oil Field ◽  
Petroleum Exploration ◽  
Oil Companies ◽  
The Status ◽  
Modern Business ◽  
Quantitative Analyses ◽  
Risk Cost

Analytical evaluations raise petroleum exploration from the realm of educated guessing to a quantitative decision level that is compatible with modern business techniques. Management and explorationists can thus appraise the merits of an area and/or exploration program and expect to derive optimum results with a minimum risk. All petroleum exploration programs have one common goal: To find and exploit reserves of oil and gas at a profit. Today the economic factors are playing a dominant role in the highly competitive world petroleum situation. In order to justify his existence in the forecast 70‐billion‐dollar exploration effort during the next ten years, the scientist must translate his thoughts into terms the nontechnical business man or executive can readily grasp. The obvious common language is dollars and cents in terms of anticipated profits. These economic terms transcend the semantics barrier that normally exists between the executive and the oil finder. Various methods are discussed to show how geophysicists and geologist can convert exploration factors into anticipated profit‐to‐risk ratios. The authors include examples. Significant factors contributing to a successful exploration program are: (1) The exploration and economic analysis must be compatible with, and integrated into, modern business techniques. That is, the analysis must enhance the executive’s ability to make decisions. (2) The explorationist must recognize and avoid “marginal ventures,” because 60 percent of the wells completed in the United States are submarginal economically. (3) The laws of probability must be taken into consideration when establishing an exploration program. (4) To insure success, a company must hold risks to a minimum. This can be accomplished, in part, by participating in a large number of potentially profitable ventures, and/or by taking only a part of each drilling venture rather than the entire deal. (5) Anticipated profit‐to‐risk cost ratios can be estimated for many areas. Oil companies can use this information in evaluating and accepting wildcat prospects that have at least double the normal odds of developing into a profitable oil field. The scientist who applies quantitative analyses skillfully will quickly achieve both recognition within his company and the status of a key decision‐maker in his company’s exploration program.

scholarly journals New Challenges to Transboundary Unitization in the Gulf of Mexico

2020 ◽  
Vol 6 (4) ◽  
Author(s):  
Isaac Olson
Keyword(s):  
United States ◽  
Oil And Gas ◽  
New Technology ◽  
The United States ◽  
Oil Field ◽  
Joint Commission ◽  
Boundary Line ◽  
Oil Companies ◽  
Oil Reserves ◽  
The Joint Commission

In the last two decades, the search for untapped oil reserves led to many innovations in oil and gas exploration. As new technology continues to open new horizons, oil companies are increasingly able to drill at deeper ocean depths to tap offshore reserves. Offshore drilling poses problems where oil reserves hundreds of miles from shore cross an international boundary line. While American courts typically apply the rule of capture to determine who owns the subsoil resources, international law requires countries to work together to maximize the efficient, safe extraction of the resources. In 2012, the United States and Mexico drafted a treaty that would govern the unitization of an offshore transboundary oil field. Today, Mexico’s energy laws are very different. A new administration threatens to unravel recent liberal reforms, and the United States has become more hostile to Chinese investment in the region. With these political challenges in mind, the treaty is very vague on critical issues, particularly its dispute resolution clause, which the United States and Mexico must strengthen if the treaty is to be effective and shared transboundary resources develop efficiently to the benefit of both nations. The treaty creates a body called the Joint Commission to create much of the treaty’s policy and procedure. In order to maintain good relations and a healthy energy sector, the Joint Commission needs to create subsidiary committees subject to its control and comprised of various experts to ensure the treaty is implemented impartially.

Varied Responses to Human-Induced Seismicity in the City of Azle, Texas

2019 ◽  
Vol 3 (1) ◽  
pp. 1-8
Author(s):  
Sarmistha R. Majumdar
Keyword(s):  
State Government ◽  
Induced Seismicity ◽  
Oil And Gas ◽  
The United States ◽  
The State ◽  
Prior History ◽  
Small Community ◽  
Regulatory Policies ◽  
The Status

Fracking has helped to usher in an era of energy abundance in the United States. This advanced drilling procedure has helped the nation to attain the status of the largest producer of crude oil and natural gas in the world, but some of its negative externalities, such as human-induced seismicity, can no longer be ignored. The occurrence of earthquakes in communities located at proximity to disposal wells with no prior history of seismicity has shocked residents and have caused damages to properties. It has evoked individuals’ resentment against the practice of injection of fracking’s wastewater under pressure into underground disposal wells. Though the oil and gas companies have denied the existence of a link between such a practice and earthquakes and the local and state governments have delayed their responses to the unforeseen seismic events, the issue has gained in prominence among researchers, affected community residents, and the media. This case study has offered a glimpse into the varied responses of stakeholders to human-induced seismicity in a small city in the state of Texas. It is evident from this case study that although individuals’ complaints and protests from a small community may not be successful in bringing about statewide changes in regulatory policies on disposal of fracking’s wastewater, they can add to the public pressure on the state government to do something to address the problem in a state that supports fracking.

Significant Differences in Proved Reserves Estimates Using SPE/WPC Definitions Compared to United States Securities and Exchange Commission (SEC) Definitions

2005 ◽  
Vol 8 (06) ◽  
pp. 520-527 ◽  
Author(s):  
D.R. Harrell ◽  
Thomas L. Gardner
Keyword(s):  
United States ◽  
Oil And Gas ◽  
The United States ◽  
Securities And Exchange Commission ◽  
Classification Systems ◽  
Direct Function ◽  
Oil Companies ◽  
Publicly Owned ◽  
Hydrocarbon Reserves ◽  
The U.S

Summary A casual reading of the SPE/WPC (World Petroleum Congresses) Petroleum Reserves Definitions (1997) and the U.S. Securities and Exchange Commission(SEC) definitions (1978) would suggest very little, if any, difference in the quantities of proved hydrocarbon reserves estimated under those two classification systems. The differences in many circumstances for both volumetric and performance-based estimates may be small. In 1999, the SEC began to increase its review process, seeking greater understanding and compliance with its oil and gas reserves reporting requirements. The agency's definitions had been promulgated in 1978 in connection with the Energy Policy and Conservation Act of 1975 and at a time when most publicly owned oil and gas companies and their reserves were located in the United States. Oil and gas prices were relatively stable, and virtually all natural gas was marketed through long-term contracts at fixed or determinable prices. Development drilling was subject to well-spacing regulations as established through field rules set by state agencies. Reservoir-evaluation technology has advanced far beyond that used in 1978;production-sharing contracts were uncommon then, and probabilistic reserves assessment was not widely recognized or appreciated in the U.S. These changes in industry practice plus many other considerations have created problems in adapting the 1978 vintage definitions to the technical and commercial realities of the 21st century. This paper presents several real-world examples of how the SEC engineering staff has updated its approach to reserves assessment as well as numerous remaining unresolved areas of concern. These remaining issues are important, can lead to significant differences in reported quantities and values, and may result in questions about the "full disclosure" obligations to the SEC. Introduction For virtually all oil and gas producers, their company assets are the hydrocarbon reserves that they own through various forms of mineral interests, licensing agreements, or other contracts and that produce revenues from production and sale. Reserves are almost always reported as static quantities as of a specific date and classified into one or more categories to describe the uncertainty and production status associated with each category. The economic value of these reserves is a direct function of how the quantities are to be produced and sold over the physical or contract lives of the properties. Reserves owned by private and publicly owned companies are always assumed to be those quantities of oil and gas that can be produced and sold at a profit under assumed future prices and costs. Reserves under the control of state-owned or national oil companies may reflect quantities that exceed those deemed profitable under the commercial terms typically imposed on private or publicly owned companies.

Structural modelling of internal risk factors for oil and gas construction projects

2020 ◽  
Vol 14 (5) ◽  
pp. 975-1000
Author(s):  
Mukhtar A. Kassem ◽  
Muhamad Azry Khoiry ◽  
Noraini Hamzah
Keyword(s):  
Risk Factors ◽  
Construction Projects ◽  
Oil And Gas ◽  
Project Success ◽  
Partial Least Square ◽  
Oil Field ◽  
Path Coefficient ◽  
Content Type ◽  
Oil Companies ◽  
The Relationship

Purpose Project failure is the result of one or a combination of several causes of risk factors that are very important to identify for effective performance. This study aims to focus on studying the fundamental relationship between internal risk factors and the negative effect on oil and gas project success in Yemen using the partial least square structural equation modelling (PLS-SEM) method. Design/methodology/approach Data collection was carried out using a formal questionnaire survey of the oil field sector in Yemen by companies involved in mega-oil and gas construction projects. A hierarchical model for determining causative internal risk factors and their effects was developed and evaluated using SEM method by SmartPLS3 software technology. Findings The findings of analyzing model indicate that all categories have a significant effect on project success, while the most significant affected categories in the internal risk factors are project management factors, feasibility study-design and resources-material supply with a path coefficient value of 0.213, 0.197 and 0.186, respectively. Moreover, for the hypotheses test, the positive relationship means that all experimental hypotheses are accepted according to path coefficient value analysis. In addition, the internal risk factors research model shows the ranking of effects on project success starting with project stoppage (loading factor 0.841), cost overruns (loading factor 0.818), time overruns (loading factor 0.726) and project target failure with loading factor 0.539. Research limitations/implications The research was limited to the oil and gas construction projects in Yemen. Practical implications Interpreting the relationship between internal risk factors and their impact on the success of construction projects in the oil and gas sector will assist project team and oil companies in developing risk response strategies and developing appropriate plans to mitigate the effects of risks, which is presented in this paper. Originality/value The paper explains the relationship between cause and effect of internal risk factors in oil and gas projects in Yemen, and is expected to be a guideline for the oil companies and future academic research in the risk management area.

scholarly journals The Total S.A. Case: Meaning of “Investment” under the ILSA

1998 ◽  
Vol 92 (3) ◽  
pp. 539-548 ◽  
Author(s):  
Rex J. Zedalis
Keyword(s):  
United States ◽  
Clinton Administration ◽  
The United States ◽  
Oil Field ◽  
Executive Order ◽  
Oil Companies ◽  
Petroleum Resources ◽  
Petroleum Development ◽  
Oil Company ◽  
The U.S

On March 7, 1995, Conoco oil company of Houston, Texas, announced that it had entered into a contract with Iran to have a Netherlands-based affiliate assist in the development of the Sirri Island oil field. In response, the Clinton administration issued Executive Order No. 12,957, prohibiting participation by U.S. entities in the development of Iranian petroleum resources. Eventually, Conoco withdrew from its contract, but in early May of 1995 the administration stepped up its pressure on Iran by issuing Executive Order No. 12,959, prohibiting U.S. entities from using foreign entities they owned or controlled to make investments in or conduct trade transactions with Iran. On July 13 of that year, the French oil company Total S.A. entered into an agreement with Iran to replace Conoco in developing the Sirri Island field, and over the next several months Iran struck nearly a dozen petroleum development agreements worth in excess of $50 million each with other foreign oil companies. Within a couple of months, both Houses of the U.S. Congress took up consideration of proposals to complicate Iran’s ability to develop its hydrocarbon resources. By the end of 1995, the proposals, which even extended to wholly foreign entities organized and operating outside the United States, had come to include Libya as well. Final passage of one of the proposals, specifically, H.R. 3107, took place in the Senate and the House in July 1996. It was signed into law as the Iran and Libya Sanctions Act (ILSA) on August 5.

BUSINESS AND TAX ISSUES FOR PETROLEUM EXPLORATION AND DEVELOPMENT COMPANIES INVESTING IN THE UNITED STATES OF AMERICA

1991 ◽  
Vol 31 (1) ◽  
pp. 494
Author(s):  
Catherine A. Hayne
Keyword(s):  
United States ◽  
Oil And Gas ◽  
Oil And Gas Industry ◽  
The United States ◽  
Detailed Examination ◽  
Petroleum Exploration ◽  
Gas Industry ◽  
Oil And Gas Exploration ◽  
Corporate Executives ◽  
Exploration And Production

Oil and gas exploration and production opportunities in the United States represent possibilities for investment by Australian petroleum companies in the 1990s. This paper focuses on the unique characteristics of the oil and gas industry, and is intended as an entrepreneurial guide to some of the practical business and tax issues which corporate executives will confront when proposing to do business in the United States. It provides a detailed examination of the key issues, but, due to the complexity of United States and Australian laws, this paper should not be used as a substitute for detailed advice.

scholarly journals American Tax Considerations in the Drafting of Canadian Joint Operating Agreements

1970 ◽  
Vol 8 (2) ◽  
pp. 187
Author(s):  
John F. Curran
Keyword(s):  
United States ◽  
Income Tax ◽  
Oil And Gas ◽  
Oil And Gas Industry ◽  
The United States ◽  
Gas Industry ◽  
Internal Revenue ◽  
Tax Laws ◽  
The Status ◽  
Tax Benefits

Many operators in Canada's oil and gas industry are subject to taxation under the United States Internal Revenue Code. In their Canadian activities, operations and agreements, these operators seek to preserve any tax benefits that they may have under the income tax laws of the United States. This article outlines the tax advantages which the United States operator wishes to preserve, such as avoidance of the status of an on Canadian operators not subject to United States tax laws, and suggests draft clauses that may be included in Canadian joint operating agreements to preserve United States tax benefits for the American operator.

scholarly journals Development of an imperialist competitive algorithm (ICA)-based committee machine to predict bit penetration rate in oil wells of Iran

2015 ◽  
Vol 37 ◽  
pp. 173 ◽  
Author(s):  
Ayub Abbasi Garavand ◽  
Gholamreza Esmaeilian
Keyword(s):  
Oil And Gas ◽  
Real Data ◽  
Cost Effective ◽  
Imperialist Competitive Algorithm ◽  
Oil Field ◽  
Engineering Project ◽  
Committee Machine ◽  
Oil Companies ◽  
Competitive Algorithm ◽  
Intelligent Models

Drilling operation of a well is one the most expensive and time consuming procedures of oil and gas exploitation. Oil companies are always seeking for safe and cost-effective techniques for drilling. The main goal and motivation of drilling optimization is achieving the highest efficiency of work. Optimization and minimization of operational costs is one of the most important prerequisites of any engineering project. Rate of penetration is a crucial factor n drilling controlling cost and time of drilling. In the current research, capabilities of single independent intelligent models are employed for developing a hybrid committee machine that can predict bit penetration bit with high accuracy. To get this goal, three single intelligent models, including neural network, fuzzy logic and neuro-fuzzy, are trained. In the second step, the outputs of these models are integrated by imperialist competitive algorithm (ICA). Finally, a linear equation is achieved which gets outputs of single models as inputs and integrate them somehow the final results is closer to the actual value. The developed ICA-based committee machine is tested by 145 real data points gathered from the drilled wells in an oil field. Correlation of actual and predicted value of ROP obtained from committee machine shows that the model predicts ROP with accuracy of 88 percent. Such model can be used for optimization of drilling parameters in future drilling operations.

scholarly journals Deep oil. Offshore deposits of the Gulf of Mexico

2021 ◽  
Vol 3 (1) ◽  
pp. 3-21
Author(s):  
K. O. Iskaziev ◽  
P. E. Syngaevsky ◽  
S. F. Khafizov
Keyword(s):  
United States ◽  
Gulf Of Mexico ◽  
Oil And Gas ◽  
New Technologies ◽  
The United States ◽  
Upper Jurassic ◽  
Seismic Facies ◽  
Oil Companies ◽  
History Of ◽  
Hydrocarbon Deposits

This article continues a series of reviews of the worlds oil and gas basins, where active exploration and development of hydrocarbon deposits in superdeep (6 km +) horizons are taking place, as probable analogues of projects in the Caspian megabasin, primarily the Eurasia project. In this regard the Gulf of Mexico is of great interest, since this region is very well studies over such a long history of its development and thus makes it possible to analyze a huge amount of data collected during this time. The Gulf of Mexico includes the deep-water, offshore and coastal parts of three countries the United States, Mexico and Cuba, and is one of the most important oil and gas provinces in the world. Its deposits are represented by various complexes from the Middle Jurassic to modern sediments, with a total thickness of 14,000 m and more. Exploration for hydrocarbons has been going on here for almost 100 years. During this time, various new technologies have been developed and successfully applied, such as forecasting abnormally high reservoir pressure, cyclostratigraphy and seismic facies analysis, characterization of low-resistivity productive reservoirs and the search for ultra-deep hydrocarbon deposits. Of all the variety of objects developed in the Gulf, in the context of the study of deep deposits, the main interest and possible associations with the Caspian megabasin are the deposits of the Norflet Formation of the Upper Jurassic, which are discussed in the main part of this article. Of course, we are not talking about a direct comparison; in particular, the aeolian origin of part of the section makes this object significantly different. Nevertheless, according to the authors, studying it, as well as understanding how a successful project for its development is being implemented right before our eyes, can provide a lot of important information for working in the deep horizons of the Caspian region. The article is divided into two parts. The first examines the geological history of the formation of the Gulf of Mexico Basin, the features of the deep-lying productive complex of the Norflet Formation. The second part provides information about the history of exploration of the Norflet productive complex, characteristics of the main discoveries, as well as the prospects for discoveries of new superdeep deposits in the Norflet Formation within the Gulf of Mexico (sectors of the United States and Mexico). Analysis of the history of the development of this complex by the global player Shell, is very important, as one of the scenarios for the development of deep horizons in other oil and gas basins, incl. Caspian. International Oil Companies are able to mobilize the necessary resources and technology to effectively address this challenge.

Alaska's North Slope Borough: oil, money and Eskimo self-government

Polar Record ◽  
1980 ◽  
Vol 20 (124) ◽  
pp. 19-29 ◽  
Author(s):  
Thomas A. Morehouse ◽  
Linda Leask
Keyword(s):  
Local Economic Development ◽  
The United States ◽  
The State ◽  
Oil Field ◽  
North Slope ◽  
Oil Pipeline ◽  
Oil Companies ◽  
The North ◽  
Federal Department ◽  
Prudhoe Bay

When oil was discovered at Prudhoe Bay on Alaska's North Slope in 1968, the Eskimo villages of the region scattered around the ten-billion-barrel oil field were similar to most other rural native villages in the state: poor and isolated, with high unemployment, little or no prospect for local economic development, and dependent on federal and state programmes for minimum levels of education, medical care, and other services. Soon after the Prudhoe Bay discovery, however, Eskimo leaders on the North Slope began taking steps toward creation of a borough—a form of local or regional government in Alaska somewhat like a county elsewhere in the United States, but potentially having more extensive powers of taxation and regulation, and greater independence from the state government, than county governments typically possess. Incorporated in 1972, the North Slope Borough covers an area of 228 800 km2 and makes up about 15 per cent of the land area of Alaska. Within its boundaries lie the 93 435 km2 National Petroleum Reserve and most of the 35 560 km2 Arctic National Wildlife Range; both of these areas are under the jurisdiction of the federal Department of Interior. Located between these two federal land areas is the Prudhoe Bay oil field complex, which occupies state lands leased to the oil companies. Extending south from the oil field and crossing the borough's southern border is 270 km of the 1 270 km trans-Alaska oil pipeline.

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