Integrated Evaluation Method-Based Technical and Economic Factors for International Oil Exploration Projects

Rui Guo, Dongkun Luo, Xu Zhao and Jianliang Wang
Additional contact information
Rui Guo: School of Business Administration, China University of Petroleum (Beijing), No. 18, Fuxue Road, Changping District, Beijing 102249, China
Dongkun Luo: School of Business Administration, China University of Petroleum (Beijing), No. 18, Fuxue Road, Changping District, Beijing 102249, China
Xu Zhao: School of Business Administration, China University of Petroleum (Beijing), No. 18, Fuxue Road, Changping District, Beijing 102249, China
Jianliang Wang: School of Business Administration, China University of Petroleum (Beijing), No. 18, Fuxue Road, Changping District, Beijing 102249, China

Sustainability, 2016, vol. 8, issue 2, 1-19

Abstract: Optimizing international oil exploration projects is one of the main challenges for oil companies in obtaining investment benefits. This paper establishes an integrated evaluation model to maximize investment benefits within the constraints of technical and economic factors, including geological factors, resource quality, geographic conditions, the investment environment, and oil contracts. The paper also proposes a dynamic calculation method of indicators’ weight associated with oil prices. The analysis describes the effects of contract terms and the investment environment on project value and quantifies the contractor income ratio for different types of contracts and the investment environment of the host country. Oil exploration projects in Africa are illustrated as examples in which the evaluation indicator Adjusted Concept Reserves (ACR) is calculated for each project. The results show that remaining recoverable reserves and contract terms exert tremendous influences on ACR, and remaining recoverable reserves is the essential factor. Simultaneously, changes in oil prices lead to various rates of change in the contractor income ratio, which is determined by different fiscal terms. This study is important in helping oil companies optimize international oil projects and design reasonable investment strategies.

Keywords: international oil exploration projects; technical and economic factors; oil contract; evaluation model; investment benefit (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://www.mdpi.com/2071-1050/8/2/188/pdf (application/pdf)
https://www.mdpi.com/2071-1050/8/2/188/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:8:y:2016:i:2:p:188-:d:64217

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().