The Economics of Petroleum Exploration and Development West of Scotland

Research output: Contribution to journalArticle

Abstract

This gaper examines the economics of oil and gas exploration and development in the West of Scotland region. A considerable exploration effort has resulted in some discoveries but the overall success rate has been quite low. The region is comprised of several distinct geological basins. To date the Judd Basin has experienced the best discovery rate. Expected returns as measured by expected monetary values are generally low, confirming the high-risk nature of the region. The most economical field development concept depends to a large extent on a combination of field size and water depth which vary markedly from basin to basin. In typical cost conditions at an $18 price returns to investors in medium and large-sized fields at the development phase are positive, but at $14 only when costs are relatively low are positive returns in prospect. Stand-alone gas developments are very unlikely to be viable in current market conditions. The fuller exploitation of the whole region requires higher oil and gas prices and /or significant innovation and technological progress. (C) 2001 Published by Elsevier Science Ltd.

Original languageEnglish
Pages (from-to)1095-1120
Number of pages25
JournalContinental Shelf Research
Volume21
Issue number8-10
DOIs
Publication statusPublished - 2001

Keywords

  • geological basins
  • West of Scotland
  • exploration risk
  • expected monetary values
  • net present values
  • oil and gas developments

Cite this

The Economics of Petroleum Exploration and Development West of Scotland. / Kemp, Alexander George; Stephen, Linda.

In: Continental Shelf Research, Vol. 21, No. 8-10, 2001, p. 1095-1120.

Research output: Contribution to journalArticle

@article{9f8b4e14843e47c5a06a0fe8e74f5f72,
title = "The Economics of Petroleum Exploration and Development West of Scotland",
abstract = "This gaper examines the economics of oil and gas exploration and development in the West of Scotland region. A considerable exploration effort has resulted in some discoveries but the overall success rate has been quite low. The region is comprised of several distinct geological basins. To date the Judd Basin has experienced the best discovery rate. Expected returns as measured by expected monetary values are generally low, confirming the high-risk nature of the region. The most economical field development concept depends to a large extent on a combination of field size and water depth which vary markedly from basin to basin. In typical cost conditions at an $18 price returns to investors in medium and large-sized fields at the development phase are positive, but at $14 only when costs are relatively low are positive returns in prospect. Stand-alone gas developments are very unlikely to be viable in current market conditions. The fuller exploitation of the whole region requires higher oil and gas prices and /or significant innovation and technological progress. (C) 2001 Published by Elsevier Science Ltd.",
keywords = "geological basins, West of Scotland, exploration risk, expected monetary values, net present values, oil and gas developments",
author = "Kemp, {Alexander George} and Linda Stephen",
year = "2001",
doi = "10.1016/S0278-4343(00)00126-6",
language = "English",
volume = "21",
pages = "1095--1120",
journal = "Continental Shelf Research",
issn = "0278-4343",
publisher = "PERGAMON-ELSEVIER SCIENCE LTD",
number = "8-10",

}

TY - JOUR

T1 - The Economics of Petroleum Exploration and Development West of Scotland

AU - Kemp, Alexander George

AU - Stephen, Linda

PY - 2001

Y1 - 2001

N2 - This gaper examines the economics of oil and gas exploration and development in the West of Scotland region. A considerable exploration effort has resulted in some discoveries but the overall success rate has been quite low. The region is comprised of several distinct geological basins. To date the Judd Basin has experienced the best discovery rate. Expected returns as measured by expected monetary values are generally low, confirming the high-risk nature of the region. The most economical field development concept depends to a large extent on a combination of field size and water depth which vary markedly from basin to basin. In typical cost conditions at an $18 price returns to investors in medium and large-sized fields at the development phase are positive, but at $14 only when costs are relatively low are positive returns in prospect. Stand-alone gas developments are very unlikely to be viable in current market conditions. The fuller exploitation of the whole region requires higher oil and gas prices and /or significant innovation and technological progress. (C) 2001 Published by Elsevier Science Ltd.

AB - This gaper examines the economics of oil and gas exploration and development in the West of Scotland region. A considerable exploration effort has resulted in some discoveries but the overall success rate has been quite low. The region is comprised of several distinct geological basins. To date the Judd Basin has experienced the best discovery rate. Expected returns as measured by expected monetary values are generally low, confirming the high-risk nature of the region. The most economical field development concept depends to a large extent on a combination of field size and water depth which vary markedly from basin to basin. In typical cost conditions at an $18 price returns to investors in medium and large-sized fields at the development phase are positive, but at $14 only when costs are relatively low are positive returns in prospect. Stand-alone gas developments are very unlikely to be viable in current market conditions. The fuller exploitation of the whole region requires higher oil and gas prices and /or significant innovation and technological progress. (C) 2001 Published by Elsevier Science Ltd.

KW - geological basins

KW - West of Scotland

KW - exploration risk

KW - expected monetary values

KW - net present values

KW - oil and gas developments

U2 - 10.1016/S0278-4343(00)00126-6

DO - 10.1016/S0278-4343(00)00126-6

M3 - Article

VL - 21

SP - 1095

EP - 1120

JO - Continental Shelf Research

JF - Continental Shelf Research

SN - 0278-4343

IS - 8-10

ER -