Petroleum agreements take many forms, are in-creasingly complex, and are often a combination of elements from the different types.. Postscript The development of new exploration techniqu
Trang 1In a production-sharing agreement, the
com-pany carries the exploration risk and funds all the
development and operating costs These costs are
then recovered from part of the production, known
as ‘cost oil’ The remaining ‘profit oil’ is then split in
a pre-determined manner between the state and the
company
A further type of agreement is the service contract, in
which the state contracts for a service from the
com-pany for which the comcom-pany receives a fee; this can be,
for example, a set fee per barrel produced or a
percent-age of the hydrocarbons produced while providing the
service
Petroleum agreements take many forms, are
in-creasingly complex, and are often a combination of
elements from the different types The main
consider-ations for the company are the investment at risk, its
ability to manage the operations, access to oil in the
event of success, and the economic return on the
investment
Postscript The development of new exploration techniques con-tinues to improve geologists’ and geophysicists’ understanding of petroleum geology and to increase the efficiency of exploration by allowing wells to be sited more accurately and with a greater chance of success However, even if the geological conditions for the presence of hydrocarbons are promising, ex-ploration remains a high-risk business and invest-ments are made in exploration many years before there is any prospect of producing the oil: those ven-tures that are successful must generate sufficient profit to pay for the unsuccessful ventures, both past and future Thus, the fiscal framework established by states is vital to the commercial success of any explor-ation venture The interests of governments wishing
to develop their petroleum resources and the interests
of companies as risk takers have much in common; petroleum-exploration strategies must take these mutual interests into account
See Also Analytical Methods: Gravity Petroleum Geology: Overview; Chemical and Physical Properties; The Petrol-eum System; Production; Reserves.Seismic Surveys
Further Reading Deffeyes KS (2001) Hubbert’s Peak: the Impending World Oil Shortage Princeton: Princeton University Press Gluyas JG and Swarbrick RE (2004) Petroleum Geoscience Oxford: Blackwell
Johnson HD and Fisher MJ (1998) North Sea plays: geo logical controls on hydrocarbon distribution In: Glennie
KW (ed.) Petroleum Geology of the North Sea: Basic Concepts and Recent Advances, pp 463 547 Oxford: Blackwell
Poelchau HS, Baker DR, Hantschel Th, Horsfield B, and Wygrala B (1997) Basin simulation and the design of the conceptual basin model In: Welte DH, Horsfield B, and Baker DR (eds.) Petroleum and Basin Evolution,
pp 5 70 Berlin: Springer Verlag
Selley RC (1996) Elements of Petroleum Geology, 2nd edn San Diego: Academic Press
Shell Briefing Service (1994) Upstream Essentials London: Shell International Petroleum Company Limited Steinmetz R (ed.) (1992) The Business of Petroleum Ex ploration Treatise of Petroleum Geology Handbook
of Petroleum Geology Tulsa: American Association of Petroleum Geologists
Table 1 Indicative costs of exploration (for the year 2003) (all
values are in US dollars)
Onshore jungle terrain
Seismic cost per two
dimensional kilometre
7 000 Seismic cost per three
dimensional square
kilometre
12 000 (but can be significantly higher)
Well cost (to 3500 m) 3 5 million
Onshore desert terrain
Seismic cost per two
dimensional kilometre
2 000 Seismic cost per three
dimensional square
kilometre
4 000
Well cost (to 3500 m) 1.5 2 million
Onshore urban or
agricultural environment
Seismic cost per three
dimensional square
kilometre
12 000
Offshore
Seismic cost per two
dimensional kilometre
600 Seismic cost per three
dimensional square
kilometre
5 000
Well cost (to 3500 m) 6 8 million (but can be
significantly higher for deep wells encountering high pressure and high temperature, or in remote locations; up to 25 million)
PETROLEUM GEOLOGY/Exploration 307