Big Oil Companies Research Articles

Why the oil companies lost solar

Solar energy is a growing source of electricity supply. Oil companies including BP and Shell recognized this early on and entered the solar industry when it was still in its relative infancy. These companies invested heavily in vertically integrated solar companies that were at one point among the largest in the world. But neither BP nor Shell was successful, and they both decided to exit the solar market. This stands as a paradox since such companies have the funds, the long-term perspectives, the management systems, the multinational presence and the lobbying clout to potentially succeed in this new energy industry. Why were they not successful, and why did they ultimately exit? This paper uses innovation theory to explore the reasons why large incumbent corporations typically fail to succeed in commercializing disruptive innovations at scale. Evidence from semi-structured interviews and discussions with former employees of BP Solar and Shell Solar confirm the explanatory power of key constructs from innovation theory in accounting for the big oil companies' experience with solar technology. Ultimately, the findings suggest that oil companies would have done better to treat their solar businesses as separate stand-alone entities.

Keeping the Pipeline Full

Large infusions of money and new technology will be needed to fill the oil gathering systems in the West Siberian oil fields. The owner of this field, Salym Petroleum Development, hopes to increase the output of its fields using chemically enhanced oil recovery and by producing oil from the Bazhenov formation. Russia Considers Its Unconventional Options To search online for the story of how Russia became one of the world’s top oil producers, try the keywords “West Siberia.” For the future, try “Bazhenov.” The Bazhenov is the source rock for the prolific West Siberian fields that still yield about two-thirds of Russia’s crude oil production nearly 50 years after the oldest of those fields went into production. The formation covers an enormous area—conservative estimates put it at more than 1 million km2, which is 1.5 times as large as the US state of Texas. The low-end estimate of the total reserves in the Bazhenov by a national agency that estimates Russian resources in the ground, Rosnedra, is 182 billion bbl, according to Platts, an oil industry trade publication. The high end is double that total. Now, some of the biggest oil companies in Russia, and the world, are trying to figure out how to convert that resource into reserves. Bazhenov wells have been drilled for decades, and have earned the formation a reputation for unpredictability. The drive to take what has been learned about unconventional oil production in the US and use it in West Siberia was a key theme at the recent SPE Russian Oil & Gas Exploration and Production Technical Conference and Exhibition in Moscow. Another theme was the growing list of techniques being employed to extract more oil out of conventional formations: from using advanced seismic analysis, to new drilling and completion methods to tap unproductive formations, to enhanced oil recovery (EOR) using chemicals. An example of all of the above is Salym Petroleum Development (SPD). The 50/50 joint venture between Shell and Gazpromneft, a Gazprom subsidiary, has been investigating the Bazhenov in its fields in West Siberia, where it has also been drilling hundreds of wells based on advanced seismic studies to reach unproduced zones. And it is testing chemical EOR. Based on lab work and a single-well field test, using alkaline surfactant polymer (ASP) treatments could significantly increase its ultimate production, Simon Durkin, chief executive officer of SPD, said in an interview during the Russian conference. Using chemicals to free more of the oil from the formation and improve the sweep of a waterflood could add more than 100 million bbl of incremental production over 30 years, according to company estimates.

Evaluation of influential factors on market values of five major international oil companies, using the method of panel data with two-way error components and its application in oil and gas industries of Iran

Market value is one of the important indices for evaluating a company's financial operation. Profit from, and volume of oil and gas reserves of companies are the most important factors that influence the market value of large international oil companies. In this study, two-way error component regression with fixed effects is used to estimate influential factors on market value of five major oil companies. Accordingly, the effect of oil and gas reserves volume on the financial value of big oil companies is about 1.73 times more than the effect of companies’ profit. With more profitability from buy-back contracts of Iran, big oil companies have enough reason to be selective with production contracts in which to participate. To solve this, it is proposed that smaller international contractors be used to help the national oil company develop the country's oil and gas fields but that project management be handled by oil and gas industry managers within the country.

Climate change, carbon trading and civil society: negative returns on South African investments

Can global warming be mitigated by carbon trading? With climate change posing perhaps the gravest threat to humanity in coming decades, and with free market economics still dominated by a few wealthy nations, it is little wonder so much effort has gone into creating a carbon market, no matter how much evidence has recently emerged about its flaws. South Africa, a revealing pilot site, has initiated carbon trading projects with adverse economic, environmental and social impacts. This country pollutes at a rate twenty times higher than even the United States of America, measured by CO2 emissions generated by each GDP dollar per person, so the idea of trading for carbon reductions is seductive - and potentially lucrative. Current state policy is supportive and a former environment minister is a market promoter, alongside the World Bank, the Dutch government and big oil companies.

Technology Focus: HP/HT Challenges (April 2009)

Technology Focus Once again, recent SPE papers reflect technical advances made in high-pressure/high-temperature (HP/HT) drilling and production. Over the years there has been, not just an increased number of papers, but an increase in subject areas. This activity demonstrates steady expansion in developing HP/HT reservoirs and the increasing importance to hydrocarbon supply. This diversity of technical areas and geographical distribution makes it impossible to provide examples of all technical and operational matters with just three highlighted papers. However, the advances in the industry's technical capabilities are overshadowed by the world's financial system. Fundamentally, SPE is a technical society, but we cannot ignore the seizure of the banking system, which was supposed to provide the vital "lubricant" of finance to enable our industry, and others, to expand and develop. How does this financial disturbance affect SPE? We do not work in isolation and are very much a part of society's economic activities. SPE's membership is vital to society. The direct link is in the reduction of research and development budgets, which many feel are already inadequate to address the industry's needs to meet future demand for our product. The development of HP/HT hydrocarbon reserves requires moderately long-term financing to enable development of materials and equipment to enable replacing current production. As a "learned society," we must add our collective voice to other commentators who advise the industry not to reduce the head count in an industry that is already suffering from dangerously skewed personnel demographics and facing a serious loss of core competence and experience as a significant proportion of the workforce retires. Recruitment is already reduced: "In response to what?" one may ask—certainly not the future needs of this industry. Is this the sensible collective response of an industry planning for the future and working to ensure the growth of the underlying value of our industry? Or is it another short-term knee-jerk reaction of management that "knows the price of everything and the value of nothing"? But all is not doom and gloom. While North American budgets are being severely reigned in, budget reduction in the rest of the world is significantly lower. The potential saviors appear to the big national oil companies (NOCs) and the super large international oil companies (SLIOCs) that are relatively cash-rich. Being less dependent on the banking system for financing, the NOCs and SLIOCs appear to be in a stable position. So, provided that the NOCs’ governments maintain financing levels, at least steady, we may see the NOCs and the small band of SLIOCs carry-ing the industry forward, maintaining the momentum in developing hydrocarbon resources that are technically challenging to develop. HP/HT Challenges additional reading available at the SPE eLibrary: www.spe.org SPE 114518 • "Natural-Gas Z-Factors at HP/HT Reservoir Conditions: Comparing Laboratory Measurements With Industry-Standard Correlations for a Dry Gas" by J.A. Rushing, SPE, Anadarko Petroleum, et al. SPE 115708 • "Titanium-Alloy Tubing for HP/HT Applications" by Manuel Gonzalez, SPE, Chevron, et al. Additional reading available at OnePetro: www.onepetro.org OTC 19502 • "Fracture-Mechanics-Based Fatigue Predictions for HP/HT Equipment" by R.D. Cordes, Stress Engineering Services, et al.

Can the North Sea still save Europe?

AbstractIn the 1980s and 1990s the North Sea emerged as a key non‐Organization of the Petroleum Exporting Countries oil‐producing province. Yet today overall production is declining, in both the British and Norwegian sectors, and the big oil companies and investors are losing interest in what they now see as a mature province. But apparent maturity is not a bar to new prospects and new possibilities. This paper analyses not merely the still significant potential of the North Sea, but also the wider and increasingly attractive prospects offered by the opening up of the High North, the Barents Sea and part of the Arctic region—all areas of rapidly growing interest that are on Europe's doorstep. Success will depend heavily on key questions such as the world oil price trend, technological advance and the structure of fiscal regimes for oil and gas extraction. But the opportunities are there and they could be to Europe's great advantage.

Staying the Course

For proponents of exceptionalism thesis, so-called October Revolution of 1945, led by R6mulo Betancourt and Acci6n Democritica (AD) party, and ouster of General Marcos Perez Jimenez in 1958 are traditionally presented as important watersheds, producing changes that U.S. oil interests purportedly opposed (Alexander, 1964: 22). According to Edwin Lieuwen, events of October 1945 were the most fundamental in Venezuelan history (1963: 64). Robert Alexander likewise argued that 1945 had produced profound revolutionary change in country (1982: 195). For his part, John Martz contended that 1945 Trienio marked a structural transformation that... provided basis for future national development (1966: 62). A handful of Venezuelan leftist critics, including Salvador de la Plaza, Juan Bautista Fuenmayor, and members of group Ruptura disagreed with these assessments, asserting that AD policy amounted to a capitulation to U.S. interests. They maintained that middle-class nationalist rhetoric served to obscure fact that AD did not fundamentally challenge power relations that existed between state and foreign corporations. Within mainstream academy, these critical voices were largely dismissed as partisan polemics and silenced by prevailing triumphalism that greeted return of AD and Betancourt presidency (de la Plaza, 1999; Bautista Fuenmayor, 1981: Marquez and Bravo, 1977). While earlier critics focused on AD and its leadership, this work draws special attention to adaptive role of oil companies during this period. It underscores how three big oil companies that operated in Venezuela,

Estimation of the Oil Reserves Requirement to Meet a Given Production Level—Mathematical Modeling

The problem of estimating annual oil reserves demand needed to maintain some given production level may be of real importance for big oil companies. The existing mathematical models of oil production permit the calculationor estimation of the daily or annual production from the reservoir of given dimensions with given properties. Nevertheless, the existing models do not answer many questions important for reservoir management, and, first of all, estimating the requirements in annual and total reserves increase. The authors developed an analytical model for predicting the reserves requirement to ensure a given production rate from a specific formation or region. The model is based on the data of annual rate of oil production measured in fractions of the field reserves. In modeling, we assumed as given the productive quality of reserves, that is, production rate from the unit of the proved reserves. As input function the so-called production deficit is considered, namely, a function describing the difference between the total annual planned production level and annual planned production from the already discovered fields. The model uses approximate continuous analytical description of discrete input data. Governing intergral equations of material balance relating the reserves requirement, production deficit, and productive quality of reserves are solved by application of the Laplace transformation. The solution permits calculation of the annual reserves increase to meet a given production rate specified by an analytical expression (polynomial or exponential) with 3–5 free parameters. The parameters are to be appraised from a prescribed production curve by a best-fit technique. Prediction horizon may be about 10 to 20 years.

Corporate restructuring of the global energy industry: an overview of events and issues

Before 1980, outside of the world's few major integrated oil companies, only a handful of energy companies could be considered multinational. In 1999, in addition to the scores of petroleum companies that can be classified as multinational, the scope of many electricity companies and natural gas transmission companies has become increasingly global. Through mergers, acquisitions, joint ventures, and strategic alliances, many of the world's energy companies have also become more integrated – and most recently, much larger. Natural gas pipeline companies have become electricity companies; regional domestic electric utilities have become multinational electricity companies; electricity distribution and transmission companies have become generation companies; generation companies have become distribution and transmission companies; and big oil companies have become even bigger oil companies. What have been the driving forces behind these transformations? It is in part due to a number of policy and market related developments such as deregulation, rising environmental concerns, privatisation, technological advances, and an evolution in global finance.

ARCO Chairman forecasts end of oil dominance

The head of one of the world's biggest oil companies said in February that the era of oil dominating the global energy market is creaking to a close. Future energy needs will be met by a mix of fuels that are less harmful to the environment, he said, and he called for the energy and automobile industries to collaborate on solutions to reduce emissions.“We've embarked on the beginning of the last days of the age of oil,” ARCO Chairman Mike Bowlin said at a Cambridge Energy Research Associates conference in Houston, Texas, where he also described how ARCO is moving toward a new energy model. “Our challenge is not merely to survive today's low prices, but to plan for a future in which hydrocarbons are just one of a wide variety of clean fuels that will build the global economy of the 21st century”.

BP pledges to cut emissions

British Petroleum (BP), one of the world's biggest oil companies that could become even bigger if a merger with Amoco is approved, announced on September 18 that it will cut its emissions of greenhouse gases by 10% from a 1990 baseline of 40 million tons of carbon dioxide between now and the year 2010.The target, which is double the amount of emissions reductions that industrialized nations agreed to under the Kyoto protocol on climate change, will now stand next to BP's financial targets, said John Browne, group chief executive of BP.

"They're out to Get Us": Another Look at Our Paranoid Tradition

you lie awake at night worrying about Illuminati designs on America? Do you find the single gunman theory of John Kennedy's assassination to be preposterous? Do you believe Franklin Delano Roosevelt blithely ignored early warnings of Pearl Harbor' s danger in order to pull America into World War Two? Have you long felt that Zachary Taylor was done in with arsenic by Southern extremists in 1850? Are you convinced it was the mysterious Raoul and not James Earl Ray who was behind the killing of Martin Luther King? Do you suspect that our country will soon be governed by the United Nations? Do you believe the evidence to be thin for a purposeful plot to exterminate European Jews during World War Two? Do you imagine an international Jewish cabal lies behind such fabrications in an attempt to further world Zionism? Do you think that the United States government has systematically underfunded AIDS research to allow the plague to ravage undesirable populations? Are you certain that carburetors producing unbelievable gas mileage exist, but whose designs are locked away in the vaults of big oil companies? If you answered yes to all of the above you are long overdue for a reality check. But if only one, or two, or three of these questions touched your hot button then you are simply part of America's fascination with conspiracies.

OIL EXPLORATION STRATEGIES FOR DEVELOPING COUNTRIES

This paper focuses on the roles of governments of developing countries in the oil exploration area; roles ranging from passive tax collectors to production sharers to full State ownership and control. The historical failure of governments to take full control of this key area is seen as partially due to myths: that only the big international oil companies have the necessary technology and capital and can afford the risk of oil exploration and development. Three case studies showing the large benefits to a developing country from full State control are examined: Mexico, India and Vietnam. It is concluded that only full State control can ensure that the riches of oil can be harnessed for a developing country, and governments are urged to develop greater knowledge both about the international oil industry and their country's potential resources.

Studies in Secret Diplomacy during the First World War

Originally published in 1957, the original blurb reads: ‘From these studies of the secret diplomacy surrounding the entry of Turkey and Italy into the First World War, emerges a picture of the complex machinery behind the obvious wheels of international politics. The activities of statesmen and diplomats are related to the ramifications of big business, banks, oil and armament companies. The story of each move and counter-move, told mostly in the actors’ own words and with many quotations from actual memoranda and dispatches, is based on sources which are quite new. The Russian collections of confidential correspondence, which include foreign diplomatic dispatches intercepted and deciphered in Russia, and the latest Documenti Diplomatici Italiani are practically unknown to the British public. This material has been integrated with that taken from all the available collections of British, French, German, Austro-Hungarian and American diplomatic documents, official publications, contemporary periodicals and economic and financial data, and such mines of information as the diaries, recollections and private letters of those involved. This unusual combination of source material allows some general conclusions to be drawn as to the laws and logic of the diplomacy of power politics. The most striking fact, perhaps, is the diplomatic war among allies. The book brings out the deep-seated conflicts of interests in the German-Austro-Hungarian coalition, and those dividing Britain, France, Russia and Italy in the Near East, the Balkans and the Mediterranean. Another point of special interest is the inter-group and party struggle inside the countries for or against war; and another is the genesis of some of the fateful Secret Treaties which bedevilled the peace settlements of 1919-20.’ Today it can be read and enjoyed in its historical context.

Crude Oil Prices--A Comment

THE paper on 'Crude Oil Prices in the United States at the Gulf Coast' by Professor Wayne A. Leeman is a most welcome contribution towards the clarification of problems which are approached, if at all, mostly for their political and legal implications rather than for their significance in terms of economics. Professor Leeman's conclusion that the price of crude oil at the U.S. Gulf Coast is determined by an oligopolistic system qualified by strong competitive forces within the system is to my mind correct; his analysis, however, does not appear to cover all the underlying factors and some of his conclusions are therefore perhaps less generally applicable than they might be. Professor Leeman sums up his paper by saying: 'Under present circumstances ... the consumer of petroleum products need not worry about the control over price which the producing states or the importing majors might exercise.' The main reasons why he is not afraid of the oligopolistic power of the Oil States with their opportunities of control of domestic output existing alongside the control of a few international oil companies over imports are: firstly ease of entry of newcomers, and secondly competition among the three main oil-bearing States and of the big oil companies who also handle the import of foreign crudes. Whereas it is correct to say that in theory it is easy to set up shop in drilling in the U.S.A. and new production is in certain cases privileged compared with old fields, the fact remains that during the last decade or so there have been no new discoveries of sufficient magnitude to affect materially the supply position; also new production is now inevitably more costly in terms of money than fields found and developed earlier on when the progressive erosion of monetary values had not yet reached the present extent. It is therefore less likely to result in a lowering of crude oil prices. The rivalry of the three main oil states to which Professor Leeman refers is very real but, there being so few of them, can it be expected to express itself in moves which would affect the price level? Are they not virtually compelled to remain in step lest they fall together? The further element on which Professor Leeman relies for turning oligopoly into working competition, the impact of foreign crude, has now proved to be hemmed in altogether by presidential encouragement of 'voluntary' self-denial by the im-