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
Cite this
Price, cost and exploration sensitivities of prospective activity levels in the UKCS: an application of the Monte Carlo technique. / Kemp, A G ; Stephen, L .
In: Energy Policy, Vol. 27, 1999, p. 801-810.Research output: Contribution to journal › Article
}
TY - JOUR
T1 - Price, cost and exploration sensitivities of prospective activity levels in the UKCS: an application of the Monte Carlo technique
AU - Kemp, A G
AU - Stephen, L
PY - 1999
Y1 - 1999
N2 - 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.
AB - 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.
KW - North Sea prospects
KW - Monte Carlo analysis
KW - economic framework
KW - declining prospectivity
KW - price and cost sensitivity
M3 - Article
VL - 27
SP - 801
EP - 810
JO - Energy Policy
JF - Energy Policy
SN - 0301-4215
ER -