Estimating the expected value of multiple prospects in bidding blocks
In recent years, China has accelerated the reform of its oil and gas management system, especially in competitive transfer of mining rights. Evaluating the expected value (EV) of lease blocks is crucial for the bidding decision of oil companies. When bidding for a block with several individual prosp...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
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KeAi Communications Co., Ltd.
2022-07-01
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| Series: | Energy Geoscience |
| Subjects: | |
| Online Access: | http://www.sciencedirect.com/science/article/pii/S2666759222000233 |
| _version_ | 1811242826534486016 |
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| author | Jun Li Xuebin Huang |
| author_facet | Jun Li Xuebin Huang |
| author_sort | Jun Li |
| collection | DOAJ |
| description | In recent years, China has accelerated the reform of its oil and gas management system, especially in competitive transfer of mining rights. Evaluating the expected value (EV) of lease blocks is crucial for the bidding decision of oil companies. When bidding for a block with several individual prospects, the simple addition of each prospect EV usually leads to overly high and optimistic resource volume and value estimates. For the assessment of the EV of a multi-prospect block, two factors should be considered. Firstly, the geological setting of the prospects, including their relative spatial relationship, their chance of geological success, their resources and their geological dependency, etc. The second factor is the exploration strategy of oil companies, concerned with the dry hole tolerance, the committed wells and the drilling priorities for the prospects, etc. A probabilistic method to assess the EV of a multi-prospect block is proposed, which proves to be favorable for formulating a bidding strategy for oil companies. In addition, a case study on two specific blocks with several prospects is presented to illustrate the effect of the above mentioned factors on the EV. |
| first_indexed | 2024-04-12T13:57:45Z |
| format | Article |
| id | doaj.art-4530fcb1360c4b0d9b1e1b4e7dc1c53b |
| institution | Directory Open Access Journal |
| issn | 2666-7592 |
| language | English |
| last_indexed | 2024-04-12T13:57:45Z |
| publishDate | 2022-07-01 |
| publisher | KeAi Communications Co., Ltd. |
| record_format | Article |
| series | Energy Geoscience |
| spelling | doaj.art-4530fcb1360c4b0d9b1e1b4e7dc1c53b2022-12-22T03:30:19ZengKeAi Communications Co., Ltd.Energy Geoscience2666-75922022-07-0133263269Estimating the expected value of multiple prospects in bidding blocksJun Li0Xuebin Huang1Corresponding author.; Petroleum Exploration and Production Research Institute, SINOPEC, Beijing, 100083, ChinaPetroleum Exploration and Production Research Institute, SINOPEC, Beijing, 100083, ChinaIn recent years, China has accelerated the reform of its oil and gas management system, especially in competitive transfer of mining rights. Evaluating the expected value (EV) of lease blocks is crucial for the bidding decision of oil companies. When bidding for a block with several individual prospects, the simple addition of each prospect EV usually leads to overly high and optimistic resource volume and value estimates. For the assessment of the EV of a multi-prospect block, two factors should be considered. Firstly, the geological setting of the prospects, including their relative spatial relationship, their chance of geological success, their resources and their geological dependency, etc. The second factor is the exploration strategy of oil companies, concerned with the dry hole tolerance, the committed wells and the drilling priorities for the prospects, etc. A probabilistic method to assess the EV of a multi-prospect block is proposed, which proves to be favorable for formulating a bidding strategy for oil companies. In addition, a case study on two specific blocks with several prospects is presented to illustrate the effect of the above mentioned factors on the EV.http://www.sciencedirect.com/science/article/pii/S2666759222000233Expected value (EV)Multiple prospectsBidding blockProbabilistic method |
| spellingShingle | Jun Li Xuebin Huang Estimating the expected value of multiple prospects in bidding blocks Energy Geoscience Expected value (EV) Multiple prospects Bidding block Probabilistic method |
| title | Estimating the expected value of multiple prospects in bidding blocks |
| title_full | Estimating the expected value of multiple prospects in bidding blocks |
| title_fullStr | Estimating the expected value of multiple prospects in bidding blocks |
| title_full_unstemmed | Estimating the expected value of multiple prospects in bidding blocks |
| title_short | Estimating the expected value of multiple prospects in bidding blocks |
| title_sort | estimating the expected value of multiple prospects in bidding blocks |
| topic | Expected value (EV) Multiple prospects Bidding block Probabilistic method |
| url | http://www.sciencedirect.com/science/article/pii/S2666759222000233 |
| work_keys_str_mv | AT junli estimatingtheexpectedvalueofmultipleprospectsinbiddingblocks AT xuebinhuang estimatingtheexpectedvalueofmultipleprospectsinbiddingblocks |