The economics of petroleum exploration and development west of Scotland

Citation
Ag. Kemp et L. Stephen, The economics of petroleum exploration and development west of Scotland, CONT SHELF, 21(8-10), 2001, pp. 1095-1120
Citations number
1
Categorie Soggetti
Aquatic Sciences
Journal title
CONTINENTAL SHELF RESEARCH
ISSN journal
02784343 → ACNP
Volume
21
Issue
8-10
Year of publication
2001
Pages
1095 - 1120
Database
ISI
SICI code
0278-4343(200105/06)21:8-10<1095:TEOPEA>2.0.ZU;2-D
Abstract
This gaper examines the economics of oil and gas exploration and developmen t in the West of Scotland region. A considerable exploration effort has res ulted 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 mea sured by expected monetary values are generally low, confirming the high-ri sk nature of the region. The most economical field development concept depe nds 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 pri ce 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 posi tive returns in prospect. Stand-alone gas developments are very unlikely to be viable in current market conditions. The fuller exploitation of the who le region requires higher oil and gas prices and /or significant innovation and technological progress. (C) 2001 Published by Elsevier Science Ltd.