Value assessment for reservoir recovery optimization

Resumo

This paper analyzes the managerial flexibility embedded in oil and gas exploration and production. The analysis includes the economic impact of using different production techniques on the valuation of oil reserves. Two methodologies are used to evaluate the simulation of engineering techniques: (i) the real option approach; and (ii) the discounted cash flow (DCF) method. Given the external variables (e.g., oil price, interest rate), this paper evaluates the best engineering technique for oil recovery by using a valuation approach. We conclude that by appropriately combining different production techniques, the value of oil reserves can increase under the real option approach and can be higher than the value assessed under the DCF method. Since oil recovery includes many managerial choices, we argue that the real option approach is more appropriate than the DCF method. The paper concludes that concession time and dividend yield are the most sensitive parameters for the valuation of oil reserves. (C) 2001 Elsevier Science B.V. All rights reserved.

Ficha do documento

Tipo

Artigo científico

Ano

2001

Instituição

Elsevier Science Bv

Fonte

Repositório da FGV

Idioma

Inglês

Acesso

Acesso restrito

DOI

10.1016/S0920-4105(01)00157-7

Identificador

oai:repositorio.fgv.br:10438/23020

Temas

Economia

Palavras-chave

PetroleumReservoir engineeringSimulationOptimizationReal optionsEconomiaPetróleoEngenhariaReservatórios