Abstract
Building on previous work this paper develops a probabilistic economic model using the Monte Carlo technique to project activity levels in the UK Continental Shelf. The modelling emphasises the importance of oil and gas prices, the investor's hurdle rate of return, changing prospectivity, and the exploration effort. Activity in the medium term is found to be highly sensitive to oil and gas prices, development costs and exploration effort. Field investment may fall very substantially and the oil production decline rate could be fast from 2000. To sustain higher activity levels further technological advances and their widespread adoption are essential. (C) 2000 Elsevier Science Ltd. All rights reserved.
| Original language | English |
|---|---|
| Pages (from-to) | 801-810 |
| Number of pages | 10 |
| Journal | Energy Policy |
| Volume | 27 |
| Publication status | Published - 1999 |
Keywords
- North Sea prospects
- Monte Carlo analysis
- economic framework
- declining prospectivity
- price and cost sensitivity