Business Insights

Being ready to operate is one of the most critical steps in the development of an oil field. For complex projects characterized by technical risks and challenges, a structured approach is mandatory to ensure operational excellence and readiness.

The oil and gas industry has always been a competitive arena, in which handling risks effectively has now become critical for business efficiency. The effect of risks on project costs should be carefully quantified in order to implement efficient measures to mitigate these risks.

Charles Osborne of BP diseases the role that real options can play in managing risk.

Oil trading is a broad term, incorporating the exchange of physical oil cargoes and trading of paper instruments, which does not necessarily result in physical delivery of oil. It is a complex mechanism composed of several markets—spot, over-the-counter, and futures markets.

Historically robust demand and hydrocarbon prices in the past have conditioned the industry to regard operating expenditure (opex) as a minor element compared with capital expenditure (capex). There are important lessons about opex that can be learned from our downstream cousins.

University of Houston professor Michael Economides weighs in on the debate over peak oil.

Peter Jackson of Cambridge Energy Research Associates presents a macroeconomic perspective on the peak oil theory introducing the concept of an undulating plateau.

Dennis Smith, Chief Economist of IHS Energy, gives an introduction to commercial analysis of upstream projects, stressing the importance of various inputs, fiscal system interpretation, and presentation of economic indicators.

Sustained rapid economic growth has made China and India increasingly important in the world economy. The accompanying surge in energy demand from these two countries has been a factor in recent oil price increases.

Monte Carlo simulation is the principal analytical tool of risk analysis. Its direct objective is always to estimate the range of something [e.g., reserves, project cost, business unit annual production, net present value (NPV), rate of return].