Current Oil Prices Research Articles

Oil price effects over individual Portuguese stock returns

During the last decades, the world energy dependence increased significantly. Understanding how companies depend on oil prices is essential, especially for countries highly dependent or importers. The work intends to investigate the relationship between oil price changes and Portuguese listed companies’ returns. Using the generalized autoregressive conditional heteroskedasticity model, we conclude that nearly 20 % of the companies are significantly affected by oil prices, finding also evidence that these effects are asymmetric, depending on the company’s current situation in the market (result attributed to the lack of liquidity and the small number of firms included within the sample). There exists some differences among economic sectors in the way they are impacted by oil price changes, although not so much significant. The results show that the bigger the company, the higher the probability of being significantly affected by oil price changes. Results suggest that lagged oil price positive shocks increase Portuguese companies’ returns, by opposition to the current oil price change. Findings highlight the key role played by aggregate demand-side oil price shocks over the financial economic activity, showing sector and individual companies’ differences, thus inducing the possibility of results being highly dependent over the economic context faced by the country under analysis, that firms are more sensitive to oil prices when the equity market is busiest and that oil price increases affect companies returns in a negative way, but price decreases cause more positive than negative effects over company returns.

Dynamic Relationships Between Dubai Oil Price, Shanghai and KOSPI Stock Markets

Recognizing the importance of the relationship between stock market and oil prices, this paper examines the long-term price relationships between the Dubai oil price and stock market returns for two large oil-consuming countries in Asia, namely China and Korea, by estimating the Shanghai Stock Exchange (SSE) Composite Index and the Korea Composite Stock Price Index (KOSPI) from April 16, 2010, to August 31, 2011. The Granger Causality model based on the Vector Autoregression (VAR) model and the Johansen cointegration test are employed. According to the empirical results, the cointegration analysis shows a long-term relationship between the Dubai oil price and the stock market price for the whole sample period for both KOSPI and the SSE Composite Index. In addition, the results of the Granger Causality test indicate that the knowledge of recent Dubai oil price data influences the short-term forecast of KOSPI but not vice versa and that the short-term forecast of returns on current or future Dubai oil prices is affected by the movement of the SSE Composite Index but not vice versa.

Evaluation of PDC bit ROP models and the effect of rock strength on model coefficients

Current low oil price conditions have renewed the emphasis on drilling optimization, in order to save time drilling oil and gas wells and reduce operational costs. Rate of penetration (ROP) modeling is a key tool in optimizing drilling parameters, namely bit weight and rotary speed, for faster drilling processes. With a novel, all-automated data visualization and ROP modeling tool developed in Excel VBA, ROPPlotter, this work investigates model performance and the impact of rock strength on model coefficients of two different PDC bit ROP models: Hareland and Rampersad (1994) and Motahhari et al. (2010). These two PDC bit models are compared against a base case, general ROP relation developed by Bingham (1964) in three different sandstone formations in the vertical section of a Bakken shale horizontal well. For the first time, an attempt has been made to isolate the effect of varying rock strength on ROP model coefficients by investigating lithologies with otherwise similar drilling parameters. Additionally, a comprehensive discussion on the importance of selecting appropriate model coefficients bounds is conducted. Rock strength, accounted for in Hareland's and Motahhari's models but not in Bingham's, results in higher values of constant multiplier model coefficients for the former models, in addition to an increased RPM term exponent for Motahhari's model. Hareland and Rampersad's model is shown to perform best out of the three models with this particular dataset. The effectiveness and applicability of traditional ROP modeling is brought to question, as such models rely on a set of empirical coefficients that incorporate the effect of many drilling factors not accounted for in the model's formulation and are unique to a particular lithology.

An economic analysis of sustainability of a potential GCC economic and monetary union during 2005-2014

Purpose – Gulf Cooperation Council (GCC) was set up in 1981 between Bahrain, Oman, Qatar, Saudi Arabia, United Arab Emirates and Kuwait for strengthening cooperation and economic development in the region. The GCC has made strides towards economic consolidation by forming a customs union and a common market. The long-term vision is to create an Economic and Monetary Union (EMU) with a single currency. Progress towards the EMU has been slow and the recent oil price plunge has led to concerns regarding sustainable growth of member countries due to their significant dependence on oil and lack of diversification. The purpose of this paper is to analyse the scope of an EMU in the GCC against the backdrop of current oil crisis and examine sustainability of such a union. The paper studies convergence criteria similar to the ones followed by the accession countries of the European EMU in the 1990s preceding the introduction of the single currency Euro. Design/methodology/approach – The paper draws its practical approach from the experience of the European Monetary Union, though the original idea of the single currency in Optimum Currency Areas was conceived by Mundell (1961). The present paper analyses macroeconomic time-series variables (e.g. GDP, budget deficits, debt, growth rates, inflation rates, exchange rates) for GCC during the period 2005-2014. Data has been sourced from United Nations Conference on Trade and Development (UNCTAD), The World Bank and International Monetary Fund (IMF) databases to study the convergence criteria adopted by the EMU countries for the introduction of the Euro. Findings – The paper concludes that GCC economies are similar in terms of their structural and economic fundamentals. Most elements of the convergence criteria that were followed by the accession countries in Europe are fulfilled by the GCC member states, particularly during 2011-2014. The GCC states look similar in terms of sustainable growth, price stability and exchange rate stability – three aspects of convergence met by the European Union states. However, heavy dependence on oil and lack of diversification from oil and hydrocarbon-related products in the gross domestic product (GDP) composition of GCC states pose severe risks to the potential union. Fiscal vulnerabilities of these economies to oil price shocks, such as the current oil price crisis, create concerns for such a union during oil price lows. Widely divergent fiscal deficit-to-GDP ratios and rising debt-to-GDP ratios during periods of low oil prices imply the lack of sound and unsustainable public finances for some of the GCC states. The divergence has stemmed from widely different break-even oil prices for government budgets within the GCC and also due to varying degrees of oil dependencies between the member states. The scope of a successful and more sustainable EMU can be further explored once the GCC economics have achieved adequate diversity from oil. Originality/value – The study is useful to policy makers, central banks, businesses and researchers since it highlights the EMU as a feasible option for the GCC states. The sustainability of the EMU is contingent on diversification of these economies in the future from oil and oil-related products. The study can be utilized by policy makers as a strategy to further restructure GCC economies towards greater resilience and integration prior to accession to the GCC EMU.

CO2 Accounting and Risk Analysis for CO2 Sequestration at Enhanced Oil Recovery Sites.

Using CO2 in enhanced oil recovery (CO2-EOR) is a promising technology for emissions management because CO2-EOR can dramatically reduce sequestration costs in the absence of emissions policies that include incentives for carbon capture and storage. This study develops a multiscale statistical framework to perform CO2 accounting and risk analysis in an EOR environment at the Farnsworth Unit (FWU), Texas. A set of geostatistical-based Monte Carlo simulations of CO2-oil/gas-water flow and transport in the Morrow formation are conducted for global sensitivity and statistical analysis of the major risk metrics: CO2/water injection/production rates, cumulative net CO2 storage, cumulative oil/gas productions, and CO2 breakthrough time. The median and confidence intervals are estimated for quantifying uncertainty ranges of the risk metrics. A response-surface-based economic model has been derived to calculate the CO2-EOR profitability for the FWU site with a current oil price, which suggests that approximately 31% of the 1000 realizations can be profitable. If government carbon-tax credits are available, or the oil price goes up or CO2 capture and operating expenses reduce, more realizations would be profitable. The results from this study provide valuable insights for understanding CO2 storage potential and the corresponding environmental and economic risks of commercial-scale CO2-sequestration in depleted reservoirs.

The dark side of the black gold shock onto Europe: One stock's joy is another stock's sorrow

This paper examines the impact of the current oil prices fall on Europe. We estimate a Bayesian shrinkage VAR model and analyse the impulse response functions to investigate the reaction of European stock markets to the current oil prices collapse. Using data covering the March 2002 to May 2014 period, our main result is that European stock markets are negatively and significantly affected by the crude oil shock. We prove that this result is robust to reasonable changes in the Bayesian shrinkage VAR model of the variables order and inclusion of additional variables. The findings shed light that common features exist among the European stock markets. Furthermore, the results highlight that the most exposed stock market is the French one, and that the least affected market is the Austrian one.

Targeting oil and gas in the Perth Basin using an airborne gravity gradiometer

In recent years there has been renewed interest in the hydrocarbon potential of the Perth Basin in Western Australia. It is close to the regional capital city and the gas pipeline that runs between Dampier in the north and Bunbury in the south. Recent discoveries of gas by AWE have shown that there is a working hydrocarbon system within at least the northern and central parts of the basin. In most parts of the basin, modern seismic data is relatively scarce. In the current low oil price environment, explorers are looking for cost-effective ways of exploring and targeting seismic acquisition. Airborne gravity gradiometry is such a technique. It has been widely used in frontier basins to understand the basin architecture (Bain et al., 2013, Roberts et al., 2015), sedimentary structure (Feijth et al., 2015 and Kovac et al. 2013) and planning of seismic acquisition (Moore et al., 2012). The Black Swan geophysical survey was conducted by CGG to assist oil and gas producer, Empire Oil and Gas, in identifying target areas for hydrocarbon exploration. The main tools employed were the Falcon Airborne Gravity Gradiometer (AGG), magnetic and digital terrain data. The survey was flown east-west with a nominal flying height of 100 m with 1 000-m line spacing, using a flight line to tie line ratio of 10:1. Structural interpretation has been carried out in two phases. Regional interpretation provided an overview of major regional structures and aimed to analyse the linkage between segments within the exploration blocks. It was derived from regional, publicly available gravity and magnetic data. Detailed structural interpretation was derived from the AGG (Airborne Gravity Gradiometer) data in order to improve current understanding of the tectonic pattern within Empire Oil’s exploration blocks. Depth to magnetic basement was calculated using publicly available government data. The survey identified areas containing large structural leads and trends for targeting future gas exploration activities, including infill 2D seismic acquisition.

Downturn Represents Stress Test for Unconventional Hydraulic Fracture Modeling

Developers of the latest generation of unconventional hydraulic fracturing models are hoping that current weak oil and gas prices will generate newfound interest in their software technology. After years of rewriting old programs and coming up with new ones, the modelers say they have advanced the industry’s ability to digitally simulate how shale reservoirs react to hydraulic fracturing. If the technology works, they may have overcome the major limitations that have stymied the adoption of fracture modeling since the onset of the North American shale revolution. Those working on this new front include service company giants such as Schlumberger, which in recent years has built and acquired a number of modeling, simulation, and 3D seismic technologies to capture this budding market. Smaller and much younger startups are also in the hunt, such as Sigma3 and FracGeo, who teamed up in the summer of 2014 to introduce and market new unconventional reservoir models. Several other players are pushing their own approaches but the concept they all share is that if shale producers can predict what subsurface properties dictate a quality completion, they can land wells in geologically and geomechanically favorable sweet spots and spend their capital on initiating fracture stages only in the most likely-to-produce sections of a well. The technology could also reduce the financial pain incurred through time-consuming, trial-and-error pilot programs used to determine a particular field’s best completion practices. Ultimately, the technological goal is to lower break-even costs and deliver sustainability to the flagging shale business by engineering wells that produce more oil and gas from fewer wells, with fewer fracturing stages. “People are struggling to make a profit with the current oil price just by drilling every location,” on a geometric grid, said Colin Sayers, an adviser with Schlumberger who works on the company’s unconventional modeling and seismic technologies. The approach he is pitching is to “put the wells in the right place with the right orientation, and choose where you should complete based on data rather than just guesswork.”

Advanced cuttings analysis provides improved completion design, efficiency and well production

R ecent case studies of lateral well completions have highlighted the apparent ineffectiveness of geometric stage performance with regards to fracture initiation and stimulated reservoir volume (Far et al., 2015; Ashton et al., 2013; Ganguly and Cipolla, 2012). It has been observed that poor stage performance can be attributed to varying rock type compositions along the borehole, due to lateral facies changes and/or wellbore porpoising. The inefficiencies linked to non or poor performing stages can result in higher costs, associated with equipment and materials, and limit the production potential of wells. This case study highlights how the application of an optimized hydraulic fracture stimulation plan, by honouring lateral well geological heterogeneities, improved completion efficiency and well production within the Cleveland Sandstone formation, Oklahoma, USA. Optimized completions Designing optimized hydraulic fracture stimulation in a lateral well requires an understanding of the near-well bore geomechanical properties and the near-well bore and farfield stresses along the entire lateral. Such reservoir characterization is normally developed from geomechanical and petrophysical analyses using wireline or logging-while-drilling (LWD) services that include acoustic and borehole- image logs. Unfortunately, economic considerations can often inhibit or prohibit the use of logging techniques and hence the complete characterization of the reservoir, especially in the current low oil and gas price environment. A practical and convenient alternative for reservoir characterization is to use the commonly available cuttings samples to provide gross characterization of a vertical or lateral well. Utilizing Automated Mineralogy (AM) techniques, such as CGG’s RoqSCANTM, (Ashton et al., 2013) provides comprehensive data from these cuttings which includes mineralogy, texture and rock properties throughout the entire length of the well. RoqSCAN analysis can be performed either in the laboratory or at the well site to provide near-real-time reservoir navigation and data to optimize the design of completions that will be performed soon after the well reaches total depth (TD).

Solar generated steam injection in heavy oil reservoirs: A case study

Combination of solar generated steam technology and enhanced oil recovery (EOR) techniques have attracted a great deal of attention due to its positive impact on economics and on the environment. Solar steam project has already proven itself as it can reduce both gas consumption and CO2 emissions by up to 80%. However, operational issues as well as geographical factors (i.e. terrain suitability, drill sites and future field development plans) may affect solar EOR operations. In this study, a heavy oil field in Southeast Turkey was evaluated to find whether solar EOR is technically and economically feasible. Operational data such as injection rate, steam temperature and steam quality were determined by using a numerical model. A solar collector system was designed and combined with the steam injection method. Results indicated that direct normal insolation (DNI) of the oil field location was not high enough to maintain continuous steam injection. In order to sustain continuous steam injection natural gas burner back-up system must be used when DNI is intermittent to maintain required steam especially during winter nights. Economic analysis of combined system showed that fuel saving cannot compensate the initial cost of solar project with current oil price.

Assessing the impact of two recessions on the oil and gas industry: severity of declines and future outlook

Six years after the Great Recession of 2008/2009, the oil and gas industry is afflicted by a new crisis: OPEC’s global oil price war. Many see the 2014/2015 oil price plunge as a test of financial endurance between OPEC and US shale producers. Shale producers have added 4 million barrels of crude per day to global oil supply since 2010, and reduced the US need for Saudi imports. Canadian tar sand producers added nearly another 4 million barrels per day in less than a decade. Rising output of US shale oil and Canadian tar sand producers threatened to erode the OPEC market share. All growth in global oil demand has over the past decade led to a rise in market share only for non-OPEC producers. That is what Saudi Arabia and its OPEC associates wanted to stop. In an effort to put the new entrants (unconventional oil producers) out of business, the 2014/2015 oil price plunge has been deliberately prolonged by OPEC, which continues to oversupply the market by more than 1.5 million barrels per day. Unlike today, OPEC helped in 2008/2009 to restore oil prices rapidly by steep production cuts in response to lagging oil demand owing to the global recession. In this article, we compare the severity of the impact brought on by the two most recent oil price crises on the various types of oil companies. Tracking timely market capitalization and P/E ratios (share price per earnings) of the oil majors covering the 2008 epoch of oil price decline confirmed that oil company KPIs recovered rapidly during the second quarter of 2009 (Weijermars, 2010; 2011). An update of the analysis of key performance indicators (KPI) over the past decade provides insight into how companies are affected by poor market conditions. We examine the periods before the two recessions, and include post-2014 data after the beginning of the current oil price war. This study tracks the impact of economic downturns on 26 upstream oil and gas companies. In order to facilitate the analysis of the data for the 26 companies tracked on this study, they were split into peer groups based on shareholder structure, size of the corporation, degree of vertical integration and the types of oil/gas production most commonly performed by the company. The five different peer groups studied are majors, independents, US shale producers, Canadian oil sand producers and public private partnerships (PPP). The five peer groups and their respective companies are presented in Table 1. The KPIs chosen for our study are share prices, market capitalization and return on capital employed (ROCE). These were tracked annually, quarterly and daily between 2005 and 2014, and for the first half of 2015 with information available until completion of our study (July 2015).

The Fall of Oil Prices and the Effects on Biofuels

This analysis is focused on the effect of the abrupt decline of oil prices on biofuels, particularly second-generation ethanol. The efforts to decrease the production costs of biofuels, especially cellulosic ethanol (CE), will be greatly threatened if current oil prices remain low, especially since production is not slowing. Only huge state subsidies could alleviate this threat, but the challenge is to persuade citizens that this sacrifice is worthwhile.

What Is All This Talk About Emissions?

Beyond the Headlines Emissions are in the air and in the headlines every day. Whether the discussion is on human health impacts of pollution, greenhouse gas (GHG) emissions and their impact on climate change, or the misleading performance of a diesel engine, the bottom line is there is a global focus on emissions. Emission discussions are also in the forefront of the oil and gas industry. In 2012, the US Environmental Protection Agency (EPA) mandated new emission rules for our industry dealing with volatile organic hydrocarbons (VOCs), hazardous air pollutants (HAPs), and, most recently, methane. On 18 August, the agency proposed additional measures (EPA 2015) that supplement the earlier regulations and that “together will help combat climate change, reduce air pollution that harms public health, and provide greater certainty about Clean Air Act permitting requirements for the oil and natural gas industry.” The rules have set limits on emissions. If they cannot be captured, the emissions must be combusted at a 95% destruction efficiency at a minimum. Destruction efficiency is not as extensive a measure of performance as combustion efficiency; however, the move to performance-based legislation is a positive one and will most certainly lead to improved air quality and a healthier relationship with communities in close proximity to oil and gas development. Within the US, various states have or are in the process of enacting legislation specific to their local situation, on the proviso that their requirements are not weaker than the federal rules. In Colorado, for example, much of the industry activity occurs in the vicinity of communities. The state regulator is moving toward mandating de vices that not only combust efficiently, but also fully enclose the combustion to eliminate the visibility of the flare. It is also spot inspecting facilities with special cameras that detect uncombusted hydrocarbons, which are a clear indicator of poor performance. Companies that are emitting uncombusted hydrocarbons will be subject to considerable fines. North Dakota has put a rule in place that the industry must find an acceptable method of using a significant, measurable portion of a well’s associated gas, or oil production from that well will be capped. There are other situations in which the new EPA requirements, combined with state rules, will result in improved operations. The existing 2012 EPA legislation covered natural gas wellsites, production gathering and boosting stations, natural gas processing plants, and natural gas compressor stations. The proposed EPA legislation requires the reductions of methane and VOC emissions from hydraulically fractured oil wells and extends the emission reduction targets downstream covering equipment in the natural gas transmission segment. In view of this regulation, two questions are central to the emissions issue. 1. Is there a technology that can deliver results cost-effectively and address the community concerns about emissions? 2. Is it possible to comply with the new rules in the current low oil and natural gas price environment?

Gulf Cooperation Council (GCC)—Energy Price Reforms in the GCC—What Can Be Learned From International Experiences?

Energy prices in the GCC countries are low by international standards. These low prices have co-existed with rapid economic development in the region over the past 50 years, but the costs of this policy have also risen in terms of very high energy usage per capita. Providing energy at low prices has also effectively absorbed resources that could otherwise have been invested in human and physical capital or saved for future generations. The implicit cost of low energy prices in the GCC, in terms of foregone revenue, is estimated to be around 5 percent of GDP (about 8 percent of non-oil GDP) this year. GCC countries have been embarking on energy price reform in recent years. The recent decision of the UAE to remove fuel subsidies is an important initiative. Nevertheless, energy prices are generally still below international levels and differ substantially across the GCC countries. In most countries, further steps are needed to raise energy prices to reduce the growth in energy consumption and to support the fiscal adjustment that is necessary in the current lower oil price environment. Evidence in this paper suggests the inflationary impact of higher energy prices in the GCC is likely to be small, and while there may be some adverse effect on growth in the near-term, over the longer-term the growth benefits should be positive. Given the low weight of energy products in the CPI, first round effects of higher energy prices should be limited, while well anchored inflation expectations should help prevent second-round effects. On growth, a gradual increase in energy prices should have a manageable impact on industrial activity, although energy intensive industries will be adversely affected and will need to adjust. In the longer-term energy price reforms could generate significant permanent real income gains for the economy as a whole. More broadly, international experiences suggest that the likelihood of success with energy price reforms increases if the reforms are:

Microbially Enhanced Oil Recovery by Sequential Injection of Light Hydrocarbon and Nitrate in Low- And High-Pressure Bioreactors.

Microbially enhanced oil recovery (MEOR) often involves injection of aqueous molasses and nitrate to stimulate resident or introduced bacteria. Use of light oil components like toluene, as electron donor for nitrate-reducing bacteria (NRB), offers advantages but at 1-2 mM toluene is limiting in many heavy oils. Because addition of toluene to the oil increased reduction of nitrate by NRB, we propose an MEOR technology, in which water amended with light hydrocarbon below the solubility limit (5.6 mM for toluene) is injected to improve the nitrate reduction capacity of the oil along the water flow path, followed by injection of nitrate, other nutrients (e.g., phosphate) and a consortium of NRB, if necessary. Hydrocarbon- and nitrate-mediated MEOR was tested in low- and high-pressure, water-wet sandpack bioreactors with 0.5 pore volumes of residual oil in place (ROIP). Compared to control bioreactors, those with 11-12 mM of toluene in the oil (gained by direct addition or by aqueous injection) and 80 mM of nitrate in the aqueous phase produced 16.5 ± 4.4% of additional ROIP (N = 10). Because toluene is a cheap commodity chemical, HN-MEOR has the potential to be a cost-effective method for additional oil production even in the current low oil price environment.

Bargain hunting in the low oil price environment: key issues for investors when bidding for hydrocarbons in new frontiers

New hydrocarbon frontiers open for various reasons, including technological advances and beneficial economic conditions. In this article, the authors focus on countries opening for business because of political changes and how foreign entrants can best manage investment risk in these countries. Investing in frontier markets may be challenging for a number of reasons, however, the prize for overcoming these challenges can be significant. In the current low oil price environment, risk tolerant investors may see a perfect buying opportunity in promising frontiers. The authors provide an overview of ten key issues (such as political risk and local law risk) that, regardless of the oil price, investors should consider before bidding for oil and gas assets in frontier markets and advise on effective mitigation strategies.

Evaluation of the Levelized Cost of Energy Method for Analyzing Renewable Energy Systems: A Case Study of System Equivalency Crossover Points Under Varying Analysis Assumptions

A modified levelized cost of energy (LCOE) model was created to determine the economic crossover point (measured in ${{\hskip1pt}{\ssr C} {\hskip-7pt} \raise2.4pt \hbox{$\buildrel{\vrule depth0.5pt width5.5pt} \over{\vrule depth0.5pt width5pt}$}{\hskip2pt}}/\hbox{barrel} $ of oil) between a traditional diesel power-generating facility and a hybrid closed-loop wind–hydro energy system on the island of El Hierro. This island represents the first system-of-systems coupled wind and pumped-storage hydroelectric facility in the world aimed at achieving energy independence for an island. LCOE models were developed using fixed baseline oil prices of 30, 40, and 50 ${{\hskip1pt}{\ssr C} {\hskip-7pt} \raise2.4pt \hbox{$\buildrel{\vrule depth0.5pt width5.5pt} \over{\vrule depth0.5pt width5pt}$}{\hskip2pt}}/\hbox{barrel} $ , which is the price range when the construction project was undertaken. The percentage change of the Spanish consumer price index and industrial price index were used to assess the effect of changing oil prices on the LCOE. This paper involved on-site investigation of the technical and financial elements of the project and resulted in an LCOE model that includes investment, operation and maintenance, emissions, and land costs. Sensitivity analyses were carried out at varying inflation and discount rates. Results indicate that the economic crossover point between the energy production systems to be below the current world oil price and within the range of prices when the project was initiated. Increasing inflation rates reduces the crossover point by increasing future costs associated with the diesel system, and increasing discount rates raises the crossover point by discounting future costs associated with diesel fuel expense. Under constant dollar analysis, the LCEO model robustly highlights system equivalency points; however, the inclusion of discount rate challenges this robustness by introducing the potential for gaming the analysis in favor of one technology over another.

High efficient-low emission power production from low BTU gas extracted from heavy fuel oil gasification, introduction of IGCC-SOFC process

Today heavy fuel oil is still produced and plays an important role in providing required energy worldwide. However, there could be environmental problems associated with burning these used fuel oils. Because of physical characteristics of heavy fuel oil (high viscosity and density), it is not possible to utilize directly in high efficient power plants same as combined cycle (Gas turbine-steam cycle). Partial oxidation (Gasification) process is introduced as a solution to reduce the emission production in the power generation cycle from heavy fuel oil. In this process, the heavy fuel oil is converted into syngas (mainly consist of CO and H2). The chemical energy content of syngas can be converted into the electrical energy with high efficiency and low emission production through high efficient cycle like combined cycle or Solid oxide fuel cell-gas turbine. Thermodynamic simulations, environmental and economic assessments of Solid oxide fuel cell-Gas turbine power cycle are performed to investigate the feasibility of introduced system. Results show that the suggested system is not feasible in the current heavy oil price (900 US$ per Ton). The increment in cost of electrical energy in the market (more than 0.2 US$ per kWh) can improve the system feasibility. The change in governmental subsidy trend from raw fuel and electrical energy into emission decrement and high efficient technology can improve such system feasibility.

Economic Fundamentals and Changes in Stock Prices: A Comparative Analysis of Nigerian and South African Stock Exchange

This study addressed the question of whether economic variables have explanatory power over changes in stock prices in the Nigerian Stock Exchange (NSE) and Johannesburg Stock Exchange (JSE) on the reasoning that the two country’s stock markets are the biggest in Africa in terms of basic market indicators. The research assessed the impacts of economic fundamentals and terrorism incidents on changes in stock prices between both NSE and JSE using quarterly time series data spanning from January 1984:1 to December 2010:4 periods and applying recent econometric technique called Vector Auto-Regressions (VAR) model. We found that there is a significant relationship between changes in stock prices and economic fundamentals in both economies under review. The empirical evidence unveiled that in both economies at previous quarters, changes in interest rate differential, inflation, money supply and exchange rate do not really affect the movement of stock prices. Stock prices in current quarters and oil prices at previous quarters respond positively and in a very significant way to changes in current stock prices in Nigeria and South Africa. Oil prices are significant determinants of changes in current stock prices in South African, whereas in Nigerian stock market, only oil prices at previous quarters matter so much in determining changes in current stock prices. Our results also indicated that index of industrial production matters very much in Nigerian stock market, whereas it does not matter that much in South Africa. Stock price at previous quarters is not a major determinant of the current value of any of the economic fundamentals in South African economy. In Nigeria, stock price at previous quarters is a major determinant of the current value of all the economic fundamentals except interest rate differential and money supply. Our findings further showed that the presence of terrorism increases the possibility of increase in stock prices at current quarter in South Africa with insignificant effect but this is not so with Nigeria. It was only in Nigeria that the presence of terrorism at second past quarter significantly affects changes in stock price at current quarter.

Comparative cost evaluation of heating oil and small-scale wood chips produced from Euro-Mediterranean forests

This work performs a cost evaluation of small-scale produced wood chips from forests in the Euro-Mediterranean region to be used for heating purposes. The study is focused on forests located in the Argençola municipality (Catalonia, northeastern Spain). The use of such easy-to-produce biofuel is appealing since it may be used as a valid substitute of heating oil to produce thermal energy in the same area where it is produced, thus minimizing transportation requirements and reducing dependence on the rising prices of heating oil. Additionally, it allows facing environmental and social concerns related to the current lack of management in the forests under analysis, which has led to an important increase in the biomass stock and wildfires risk. As wildfires in the Euro-Mediterranean region generate important impacts, an average economic cost of wildfires has been evaluated in this paper. The economic assessment of small-scale production and consumption of wood chips as proposed in this study has shown interesting economic benefits when compared with current heating oil prices. Results indicate that it is a realistic option since production costs range from 12.2 €/GJ to 18.5 €/GJ depending on the applied forestry practices, whereas current cost of heating oil is about 23.9 €/GJ. A sensitivity analysis has also been conducted to assess the impact of the data with higher uncertainty on the final results. It has been shown that the key factors that determine the viability of the proposed model are heating oil price, biomass stock growth rate, transportation requirements and applied forest management practices. Results presented prove that wood chips cost is quite independent of fossil fuel prices, thus higher fossil fuel prices greatly favors the use of wood chips when produced and consumed in the same area, thus minimizing transportation requirements. In addition, higher biomass growth rates than those considered in this work may reduce the final cost of small-scale produced wood chips.