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Chapter 4
Reading Title:
Reading Author(s):
 
 
Book Title:
Book Author(s):
Chapter:
4
Page Range:
Total Pages:
56
 
 
Publisher:
Publication Year:
2007
Language:
English
 
 
 
 
FRM Paid Candidate Price:         US$16.00
Reading Price:
GARP Member (Non-Affiliate):   US$16.00
 
Affiliate & Non-Member:             US$20.00
 
* Order print copy for an additional US$3.92 + shipping & handling (select at checkout)
 
 
 
 
Quantitative Level:
Basic
 
 
Keywords:
 
 
Topics Covered:
Baker Hughes, contract, cost, Halliburton, installations, LNG Cycle, Norsk Hydro, Schlumberger, Statoil, Western Geco
 
 
Reading Abstract:
***From the book*** Economic evaluations of petroleum projects include, in addition to assumptions about the value of hydrocarbons, three types of data: - Production profiles, constructed by reservoir engineers from analysis of the drainage mechanisms; - Capital and operating costs, evaluated by cost estimators and managed by the project manager and the field manager respectively; - Contractual and fiscal conditions, which can have a decisive role (they can prevent an excellent project from ever seeing the light of day, for example). In the evaluation process these three types of data have to be analysed independently of one another, but also subject to an overall optimization cycle such as to maximize value added.
 
 
Reading Contents:
4.1 Introduction
4.1.1 Types of costs
4.1.2 Examples of cost breakdowns
4.2 Exploration Costs
4.2.1 Geophysics
4.2.2 Exploration drilling
4.3 Development Costs
4.3.1 The key stage prior to project authorization
4.3.2 Development drilling
4.3.3 Production and transport installation
4.3.4 Methodology for estimating development costs
4.3.5 Examples of developments
4.4 Operating Costs
4.4.1 Classification of operating costs
4.4.2 Controlling operating costs
4.5 Reducing Costs
4.5.1 Impact of technological progress
4.5.2 Impact of the economic cycle and the contractual strategy on project costs
4.6. The Petroleum Services Sector
4.6.1 Historical background
4.6.2 Investment in exploration and production: the market for petroleum services
4.6.3 The global petroleum services industry
4.6.4 Growth through acquisition
 
 
 
 
Book Review:
** From Publisher
The steps that lead to the production of oil and gas are diverse, complex and costly. They are diverse because the detection of oil and gas involves input from many specialties, ranging from geology to reservoir engineering. They are complex, as shown by the development of the job of the petroleum architect, who coordinates all the operations. They are costly, as the investments for exploration and production represent more than half of all investments in the oil and gas sector. Moreover, exploration is a risky activity, both from the technical and financial viewpoint: only one well in five produces marketable oil. Meanwhile, the areas for exploration and production are spread throughout the world.
This book provides a complete overview of the stakes and challenges involved in oil and gas exploration and production. Following a historical review and a survey of the markets, the technical phases are covered, as are the evaluation of reserves, the estimation of investments and costs, the decision-making and control processes, and the accounting, legal and contractual environment for these activities. The book concludes with a discussion of the role of safety, and of environmental and ethical issues.
 



 
   
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