Expert-based development of a standard in CO2 sequestration monitoring technology

Bureau of Economic Geolog

Deliverable 3.3 applicability of framework part VI : 1st run application of Strait of Sicily case study

This deliverable D2.2 comprises a manual containing the protocol for the application of the generic framework to the MESMA case studies. The generic framework (deliverable D2.1) is the central document for the subsequent work packages of MESMA. It provides a best practice guide for monitoring and evaluation of Spatially Managed Areas (SMA) in seven distinctive and clearly outlined steps which comprise 1) setting the context, 2) collation of existing information and mapping, 3) setting of targets, 4) risk analysis and state assessment, 5) assessment of findings against operational objectives, 6) evaluation of the effectiveness of management measures and 7) adaptation of the current management regime based on the outcome of the assessments (for details see D2.1). Although the framework has been developed as a generic tool for use by a range of people involved in evaluating SMAs, the first version of the manual was specifically tailored (in certain areas) for use by the case studies (WP3 of MESMA). It was designed to be an aid to the case studies applying the framework. Thus, feedback on the performance of the framework and manual is guiding the production of a revised framework and manual (D2.3) to be delivered in November 2012. The revised versions will be made available to the wider scientific community and management bodies. This document is the third version of the original document D2.2. As outlined in more detail in D2.1, we have identified several links between the WP2 framework on the one hand and a structured governance analysis (WP6) on the other. These links are indicated in the respective framework steps. The MESMA generic framework and manual does not accommodate for a comprehensivec governance analysis. Therefore the MESMA case study research has two streams – the MESMA framework and the governance research analysis. Governance issues in all MESMA case studies will be analysed through the WP6 Governance Analytical Structure. Further guidance on governance research has been developed and is available in a separate document entitled ‘Guidelines for MESMA WP6 Governance Research’. The WP6 governance research essentially aims to address the following questions: 1) What are the governance approaches and incentives being adopted in a given existing initiative with spatial elements, and how effective are the incentives and governance approaches in that particular context in achieving a particular priority objective? 2) What are the potential incentives and governance approaches that could be implemented to improve effectiveness in achieving the specific objective of an existing initiative and addressing related conflicts? 3) How do wider issues, such as top-down/bottom-up balance, inter-sectoral integration and power, cross-border issues, justice and different levels of knowledge, affect the effectiveness of existing initiatives? This ‘two stream’ approach will provide a clear way forward for combining the MESMA framework and governance research to the case studies in an integrated and coherent manner. As a result, in depth governance analysis covered by the governance work package is outlined briefly in the introduction of each framework step together with specific actions which will be largely carried out under the governance research. Further details on the WP6 governance analysis and on how the two streams of work will be linked from a WP6 governance perspective can be found in the document ‘Guidelines for MESMA WP6 Governance Research’, and Appendix 1 of this document shows a visualisation of the linkages between the two streams of work. It should be noted that in order to be able to link and integrate WP2 and WP6 research, both of the following conditions should be met: 1) Both WP2 and WP6 research are about analysing an existing initiative. Such an initiative may be an integrated marine spatial plan or part of the integrated plan; or if there is no integrated marine spatial plan in place, an existing initiative with spatial elements (e.g. sectoral management plan with spatial restrictions) which may be linked or offer valuable lessons to the future development of an integrated marine spatial plan. 2) WP2 and WP6 research should focus on the same priority objective for at least one run of the WP2 framework. The practical implementation of the framework is also linked to specific tools which will be identified and developed in WP4 and the data handling standards specified in WP5. A revised version of the manual should then interlink the actions underneath each framework step with a set of practical tools comprising technical and conceptual tools.peer-reviewe

Reservoir management optimization: case study of an oil rim located in the Gulf of Guinea comparing dynamic simulation of low cost smart wells with conventional wells

Imperial Users onl

Offshore Exploratory Drilling Campaigns During Low Oil Price Period: Maximizing Value Creation from Flexibility

Master's thesis in Petroleum engineeringDuring severe oil price downturns, many operating companies reduce or eliminate large investments with long time horizons such as exploratory drilling campaigns. This reduction in investments forces rig and drilling services providers to reduce their bids to be competitive. The result of this is lower initial investment in the oil and gas projects. In this research, a valuation approach is implemented to study the impact of this investment reduction on the decision-making process for executing exploratory drilling campaigns during low oil price periods. It is demonstrated that postponing exploration campaigns during low oil price periods does not necessary maximize value creation. Value creation from investment in low price periods results from the combination of uncertainty and flexibility. The analysis of the value of flexibility (optionality) is usually referred to as Real Options Valuation (ROV). In this work, one of the most versatile approach for valuing options is applied: The Least-Square Monte Carlo Method (LSM). Two uncertainties were considered: oil price and drilling cost. Among the different oil price models, the two-factor stochastic price process developed by Schwartz and Smith (2000) was chosen because of its balance between realism and ease of communication to the managers. Drilling cost is modeled as a Geometric Brownian Motion process. By implementing a delayed correlation between the drilling cost and the oil price, the cost reduction observed in the market is accounted for. In this research, it is shown how real option valuation can be used to determine the optimal time to start the exploratory drilling campaign. Furthermore, it is demonstrated that by including the correlation between the drilling cost and the oil price, the optimal time to execute the investment is during the year with the lowest expected oil price. The impact of this correlation is studied through the use of sensitivity analyses of the project value with respect to the correlation factor and the parameters in the stochastic price model. It is concluded that considering this correlation leads to more realistic project value estimations, resulting in portfolio decisions that maximize stakeholder value. The key contribution of this thesis is the use of option valuating methods to demonstrate that value will be created by initiating the exploratory drilling campaigns during low oil price periods. The real option model developed in this research is applicable to all types of exploration projects in the petroleum industry

Application of the MESMA framework. Case study : Strait of Sicily

This deliverable D2.2 comprises a manual containing the protocol for the application of the generic framework to the MESMA case studies. The generic framework (deliverable D2.1) is the central document for the subsequent work packages of MESMA. It provides a best practice guide for monitoring and evaluation of Spatially Managed Areas (SMA) in seven distinctive and clearly outlined steps which comprise 1) setting the context, 2) collation of existing information and mapping, 3) setting of targets, 4) risk analysis and state assessment, 5) assessment of findings against operational objectives, 6) evaluation of the effectiveness of management measures and 7) adaptation of the current management regime based on the outcome of the assessments (for details see D2.1). Although the framework has been developed as a generic tool for use by a range of people involved in evaluating SMAs, the first version of the manual was specifically tailored (in certain areas) for use by the case studies (WP3 of MESMA). It was designed to be an aid to the case studies applying the framework. Thus, feedback on the performance of the framework and manual is guiding the production of a revised framework and manual (D2.3) to be delivered in November 2012. The revised versions will be made available to the wider scientific community and management bodies. This document is the third version of the original document D2.2. As outlined in more detail in D2.1, we have identified several links between the WP2 framework on the one hand and a structured governance analysis (WP6) on the other. These links are indicated in the respective framework steps. The MESMA generic framework and manual does not accommodate for a comprehensivec governance analysis. Therefore the MESMA case study research has two streams – the MESMA framework and the governance research analysis. Governance issues in all MESMA case studies will be analysed through the WP6 Governance Analytical Structure. Further guidance on governance research has been developed and is available in a separate document entitled ‘Guidelines for MESMA WP6 Governance Research’. The WP6 governance research essentially aims to address the following questions: 1) What are the governance approaches and incentives being adopted in a given existing initiative with spatial elements, and how effective are the incentives and governance approaches in that particular context in achieving a particular priority objective? 2) What are the potential incentives and governance approaches that could be implemented to improve effectiveness in achieving the specific objective of an existing initiative and addressing related conflicts? 3) How do wider issues, such as top-down/bottom-up balance, inter-sectoral integration and power, cross-border issues, justice and different levels of knowledge, affect the effectiveness of existing initiatives? This ‘two stream’ approach will provide a clear way forward for combining the MESMA framework and governance research to the case studies in an integrated and coherent manner. As a result, in depth governance analysis covered by the governance work package is outlined briefly in the introduction of each framework step together with specific actions which will be largely carried out under the governance research. Further details on the WP6 governance analysis and on how the two streams of work will be linked from a WP6 governance perspective can be found in the document ‘Guidelines for MESMA WP6 Governance Research’, and Appendix 1 of this document shows a visualisation of the linkages between the two streams of work. It should be noted that in order to be able to link and integrate WP2 and WP6 research, both of the following conditions should be met: 1) Both WP2 and WP6 research are about analysing an existing initiative. Such an initiative may be an integrated marine spatial plan or part of the integrated plan; or if there is no integrated marine spatial plan in place, an existing initiative with spatial elements (e.g. sectoral management plan with spatial restrictions) which may be linked or offer valuable lessons to the future development of an integrated marine spatial plan. 2) WP2 and WP6 research should focus on the same priority objective for at least one run of the WP2 framework. The practical implementation of the framework is also linked to specific tools which will be identified and developed in WP4 and the data handling standards specified in WP5. A revised version of the manual should then interlink the actions underneath each framework step with a set of practical tools comprising technical and conceptual tools.peer-reviewe

Economics Analysis on the Development of Nigerian Offshore Marginal Fields Using Probabilistic Approach

Marginal Field Development in the prolific Niger Delta environment is of strategic importance to the Federal Government of Nigeria’s drive towards aggressive Reserve and Production Capacity enhancement. The objective of this study is to provide a perspective on portfolio diversification, investment and resource development on offshore marginal field in Nigeria. The economic analysis was carried out deterministically using economic indices like Net Present Value, Internal Rate of Return, Present Value Rate and others. Probabilistic model was also incorporated to assess the impact of the uncertainties in the input parameters using Monte Carlo simulation through the use of Crystal ball software. The key uncertainties were represented and their respective impacts on economic viability defined. The deterministic model results obtained from the studies were very impressive with Net Present Value of $526,749,924.84 at a discount value of 15% and Internal Rate of Return at 60%. Probabilistically, certainty of having a positive net present value (NPV) and good internal rate of return (IRR) values far above the hurdle rate for investment in Nigeria was obtained. The sensitivity analysis outlined oil price and tax rate as key sensitive parameters in maximizing profit. These clearly showed that the development of offshore marginal fields in Niger Delta of Nigeria is economically viable. Key words: Offshore marginal field; Probabilistic approach; Sensitivity analysis; Economic yardstic

Unconventional gas: potential energy market impacts in the European Union

In the interest of effective policymaking, this report seeks to clarify certain controversies and identify key gaps in the evidence-base relating to unconventional gas. The scope of this report is restricted to the economic impact of unconventional gas on energy markets. As such, it principally addresses such issues as the energy mix, energy prices, supplies, consumption, and trade flows. Whilst this study touches on coal bed methane and tight gas, its predominant focus is on shale gas, which the evidence at this time suggests will be the form of unconventional gas with the most growth potential in the short- to medium-term. This report considers the prospects for the indigenous production of shale gas within the EU-27 Member States. It evaluates the available evidence on resource size, extractive technology, resource access and market access. This report also considers the implications for the EU of large-scale unconventional gas production in other parts of the world. This acknowledges the fact that many changes in the dynamics of energy supply can only be understood in the broader global context. It also acknowledges that the EU is a major importer of energy, and that it is therefore heavily affected by developments in global energy markets that are largely out of its control.JRC.F.3-Energy securit