Abstract
In this study, we propose an evaluation model of the recoverable reserves for exploration and development projects of international petroleum. Due to the greater of the Exploration and Development Projects of International Petroleum (EDPIP) and defects of traditional methods, the study introduced the ideas of at risk into the evaluated methods of recoverable reserves of oil and gas and explored the Recoverable Reserves Risk (RRsaR) of petroleum for the EDPIP. The model can effectively deal with the dilemma of traditional methods and make the evaluated results combined with the risk. And it can present the petroleum recoverable reserves under the conditions of different (namely different probabilities) for the investors.
Highlights
Compared with the projects in the domestic, the Exploration and Development Projects of International Petroleum (EDPIP) have greater risks, such as political risks of host countries, the international oil price risk and geological risks and so on
The petroleum recoverable reserves of project are influenced by many risk factors, such as the geological structure, the reservoir and so on, so that the recoverable reserves take on greater uncertainty
The risk of recoverable reserves was not considered into the evaluated results when they used the traditional methods, which making the results be unable to be combined with the risk
Summary
Compared with the projects in the domestic, the Exploration and Development Projects of International Petroleum (EDPIP) have greater risks, such as political risks of host countries, the international oil price risk and geological risks and so on. The (remaining) recoverable reserves of petroleum are a significant risk of international investment projects. When investors of projects use these methods to get the evaluated value of recoverable reserves, the results are helpful for them in the decision-making of project. Its result should not be a certain value when the recoverable reserves was assessed and should take on different values under the conditions of different risks. It usually gets an evaluated result if using the traditional methods. The risk of recoverable reserves was not considered into the evaluated results when they used the traditional methods, which making the results be unable to be combined with the risk. We analyze and find that the idea of “at risk” in the theory of "Value at Risk" could dealt with the problems effectively, the idea can get related assessed results under the conditions of different risks
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