Getty Oil Company Research Articles

Hydrocarbon potential of the mesozoic carbonates of the Bahamas

In the early 1980’s, the Getty Oil Company developed petroleum play concepts for several lease areas that it controlled in the Bahamas. Interest in these areas was based upon the facts that both Cuba and Florida had producing oil fields, oil shows were reported in test wells that had been drilled in the Bahamas and the well logs from these test wells indicated that the amount of evaporites in the Bahamas Platform carbonate-evaporite complex increased with depth. Evaporites indicate arid and often anoxic and reducing depositional environments which is favorable to the preservation of organic material.

Implementing Effective Risk Analysis at Getty Oil Company

Risk analysis is having a major influence on management decisions involving investments totaling billions of dollars at the Getty Oil Company. It is now used for all major decisions on investments in exploration and production and in refinery additions. In addition, it is used for decisions on major divestments and acquisitions, where some of the most significant risk analysis work has been done. Making risk analysis a practical management tool has involved development of simple but effective techniques, development of management understanding and support, and implementation of an income uncertainty analysis system which has helped build risk analysis skills and concepts.

A Tool for More Effective Financial Analysis

Investments totaling billions of dollars annually are now required of the nation's energy companies in order to keep up with the nation's needs. Getty Oil Company itself is now investing $200 to $300 million annually. This requires many significant investment decisions each year, and the fortunes of the corporation are tied to the wisdom of the choices. The incentive to excel is a strong one—avoiding even a few bad investments can save millions of dollars. This incentive has fostered a dynamic evolution in our financial analysis. Decisions once necessarily based on limited information and short-cut discounted cash flow calculations are now supported by much more thorough and rapid analysis. Financial analysts who seldom never used computers are now directly and effectively exploiting this resource to extend their capabilities. A key factor in this progress is PAMS, the Plan Analysis and Modeling System. PAMS is designed for a more complete approach to financial investigation than most other systems. It is a computer system that does all phases of analysis work. It has features for: extensive data management, complete yet flexible calculations, and tabular and graphic management reports. The PAMS approach is used today for hundreds of applications in Getty, from project analysis to a corporate model, from price forecasting to acquisition and divestment analysis. PAMS has had a major impact by helping to achieve: Better investment decisions, Improved long-range planning, New more effective approaches to financial analysis, Company-wide introduction of new concepts such as risk analysis.