Oil Investment Research Articles

الصراع على الامتيازات والبترول الإيراني (1862-1944م)

أصبحت إيران بعد سلسلة من الإمتيازات والإتفاقيات التي حصلت عليها الدول الرأسمالية تشکل محورا أساسيا من محاور الصراع الدولي الذي اقتصر في البداية على روسيا وبريطانيا، وبعد ذلک اتسعت حلقاته بسرعة لتشمل دولا أخرى صغيرة حصلت على تلک الإمتيازات لاستغلال ثروات البلاد الطبيعية مما أدى إلى تکالب الدول وتنافسها للحصول عليها. وکانت إيران قد دخلت نطاق المصالح البريطانية الحيوية بشکل واسع خلال النصف الثاني من القرن التاسع عشر بعد أن حصلت الأخيرة على مجموعة امتيازات لاستغلال ثروات البلاد لإحساسها بأهمية إيران في حماية مصالحها وضمانها في المنطقة. وقد تمکنت بريطانيا من الحصول على عدة امتيازات في البداية تفوق ما حصلت عليه روسيا وکان ذلک في مجال التحديث وإقامة المشروعات العملاقة، وکان لذلک ما يبرره اقتصاديا وسياسيا حيث أنها کانت أسبق في التقدم الاقتصادي، مما جذب أنظار الدول إليها، کما أن تجارب الماضي قد ولدت حساسية مفرطة لدى الساسة الإيرانيين تجاه روسيا بعد أن تفاقم خطرها على إيران. وفي مجال النفط حققت بريطانيا نجاحا کبيرا في هذا المجال حيث حصل البريطانيون على امتيازات في معظم أنحاء إيران ماعدا المناطق الشمالية المتاخمة للحدود مع روسيا فقد حصلت على امتياز باستغلالها, لکنها لم تحقق الهدف المرجو منه فتم إلغاؤه وخاصة بعد قيام ثورة 1917م التي لم تعترف بذلک الامتياز, فاشترته إنجلترا التي انفردت بالمجال الإيراني بعد أن اشترت الامتياز الروسي والعمل على عرقلة أي محاولة أمريکية للاستثمار في إيران. Abstract Iran became one of the crucial fields of international struggle after the capitalist countries obtained a series of privileges and agreements there. The international struggle was first limited to Russia and Britain, but it later expanded to include other small countries that obtained these privileges to exploit the country’s natural wealth which was competed for by many countries. Britain became widely interested in Iran during the second half of the nineteenth century when Britain obtained a number of privileges to exploit the country’s resources due to Britain’s awareness of the importance of Iran in terms of guarding and guaranteeing the British interests in the region. In the beginning, Britain succeeded in getting more privileges than Russia in the field of starting and upgrading big projects. This was economically and politically justified as Iran was more economically advanced and that is why it attracted the attention of other countries. Additionally, past experiences made Iranian politicians highly sensitive towards Russia whose danger was increasing. In the field of oil investment, Britain made a big success. The British got privileges in most parts of Iran, except the northern ones which were adjacent to the borders with Russia. Russia got the privilege of working there but did not succeed on its mission. Therefore, the privilege of exploitation was cancelled after the1917 Revolution that did not recognize this privilege which was later bought by Britain. In this manner, Britain became the sole agent in the Iranian field after buying the Russian privilege and trying to stop any American attempt to invest in Iran.

SANKSİYALAR DÖVRÜNDƏ İRANIN NEFT-QAZ SƏNAYESİ

Followed by the victory of the Islamic Revolution in Iran the aggravated conflict between Tehran and USA has been observed. These interrelations have resulted in USA imposing sanctions on Iran. Sanctions have lasted since 1979 and have decelerated Iran's economic growth. With the accession of the United Nations, Resolution 461 was adopted, comprising economic sanctions against Iran. The sanctions principally targeted investments in oil, gas and petrochemicals, exports of refined petroleum products, and business collaborations with Iranian Revolutionary Guard companies.Afterwards, banking and insurance operations, shipping, and Internet services have become to be included, especially the Central Bank of Iran. Key words: Islamic Revolution in Iran, Central Bank of Iran, Tehran, USA, Iran

Modern China in the Arctic Economic Space

The article presents an exposition of Arctic cooperation between Russia and China in the context of the Eurasian Economic Union development. China is viewed as a subject of the generally accepted segment of the Arctic economy. The author analyses Russian-Chinese strategic cooperation in the Arctic through the prism of the conjugation of the Russian Northern Sea Route and the Chinese Maritime Silk Road of the 21st century (Ice Silk Road). The key factors of the two countries’ interest in the joint development of the Northern Sea Route are identified. The researcher Kuklina E. A. determines promising cooperation areas in the Arctic macroregion (expert and analytical activities in the form of creating Russian-Chinese “think tanks”; investment activities in the form of direct investments in offshore oil and gas projects).

Norwegian Oil Experience and The Possibility of Benefiting From it in Iraq

It is obvious that the oil sector in Iraq is suffering from major problems related to oil infrastructure, in terms of extraction, production, transport, storage and export outlets. Generally, it is often said that the economic policy including the oil policy, have been failed in setting the short- and long-term plans to manage and best use the oil wealth. Although there are a number of official institutions to manage oil industry in Iraq, there is no competent authority in the area of investment and management of surplus reserves which is deposited in a development fund of Iraq (DFI). It is emphasized that Iraq’s need to invest these reserves, despite the existence of some intersections between the monetary policy and the fiscal policy. Yet, oil revenues, constitute more than 90% of the public budget of the country. On the other hand, the Norway experience has become a successful model in the oil industry among oil export countries, includes the level of extraction, manufacture and export of oil derivatives. it is possible to benefit from its experience in this sector through attempting to apply its oil investment policy and to be guided in all phases of the oil industry. As a result of its remarkable success is achieved in the oil sector, the researcher will study all development stages and the reasons for the success regarding the oil industry in Norway, particularly in term of establishing sovereign wealth funds (SWFs) and its role in economic and financial stability

BHPSO combined with statistical net hydrocarbon thickness map for well placement optimization under uncertainty

Investments in oil and gas projects are driven by critical field development decisions including well placement, which often significantly affect the projects’ economics. Due to their typically high cost and inherently insufficient data (especially in greenfields, or fields in their early stage of development), managing uncertainty is critical when optimizing a field development plan. The use of a single deterministic base case for hydrocarbon, both in place assessment and production forecasting is often misleading and leads to sub-optimal decisions. Consequently, robust field development plans require multiple geological realizations covering the range of uncertainty in reservoir properties and encompassing both multiple geological concepts and geostatistical properties distribution. Typically, an objective function such as the average net present value (NPV) or the average cumulative oil production (COP) is optimized in order to select an optimal development scenario. Nevertheless, such an assessment can be computationally prohibitive, especially when using optimization methods require hundreds, often thousands of costly simulations over a single realization, a number that significantly increases when multiple realizations are involved. This study proposes a new method for well placement optimization under uncertainty, building on map-based evolutionary optimization technique: the black hole particle swarm optimization (BHPSO). The statistical net hydrocarbon thickness (SNHCT) map is introduced to guide the BHPSO algorithm; and hence, pragmatically account for uncertainty in the process of well placement optimization. We optimize well placement on the realization corresponding to the minimum difference between its NHCT map and the SNHCT map. The SNHCT combines the average and the P90 NHCT maps; hence, assuring that the selected sweet spots for well placement are statistically the best with regard to the multiple subsurface realizations. The method is applied on the Olympus benchmark case and results are compared to two scenario reduction methods: RMfinder and k-means-k-medoids Clustering. Results show superior performance over the two methods in terms of optimality of the result and the required computational load.

North sea oil: a tale of two countries [Oil & Gas Industry

BACK IN THE 1980s, for a whole golden decade it seemed that the sun would never set on the prosperity North Sea exploration brought to the United Kingdom and Norway. Both nations gratefully cashed in on a new gold rush ushered in by the alignment of two factors. First, the price of oil had rocketed since the global political shocks of the ArabIsraeli War of 1973-4 and the Iranian Revolution of 1978-9. Second, while consumers sought an alternative to dealing with the inflated markets of the Middle East, rapid exploration of the North Sea's continental shelf meant that economically viable oilfields were coming on stream at considerable pace. With the energy crisis of the 1970s a thing of the past, Time magazine reported that “the world temporarily floats in a glut of oil”. The Institute of Fiscal Studies stated that “the growth of North Sea oil revenues is the most important fiscal development in the British economy in the 1980s”. In fact, during the 1980s, taxation on oil from the North Sea delivered to the UK's Treasury (when adjusted for inflation) an average of £18bn per annum, or 10 per cent of its entire income. As a direct result of tax revenues and state investment in oil generated from the North Sea, Norway was able to consolidate its economic independence and resist joining the EU.

Terrorist attacks and oil prices: Hypothesis and empirical evidence

Using a unique dataset that merges terrorism activity with oil prices, this paper develops and tests the hypothesis that terrorist attacks predict oil prices. We develop three insights. First, we show that terrorist attacks have a positive effect on oil prices, but it is attacks originating from oil producer countries that most influence oil prices. Second, we devise trading strategies based on terrorist attacks and show that attacks, by signaling buying and selling in the market, beat a buy-and-hold strategy. We also show that a mean–variance investor who utilizes our terrorism-based forecasting model makes economically meaningful profits. Our analysis also shows that the effect of terrorism on oil prices operates via both the oil production and oil investment channels.

The energy transition, Trump energy agenda and COVID-19

Market participants and public policy makers around the world are working hard, attempting to move the world away from the use of carbon-intensive fossil fuels and towards the adoption of viable renewable energy sources. The Trump energy plan supports the production of fossil fuels by reversing this progress. The COVID-19 and the resulting lockdown measures come to worsen the situation by causing a noticeable disruption across the fossil fuel and renewable energy industries. Given these developments, this study seeks to address how and to what extent the Trump energy agenda is rolling back the plans for advancing renewable energy, and how the pandemic is changing the pace of energy transition. For this purpose, we compare the performances of renewable energy and fossil fuels in terms of volatility, efficiency and diversifications benefits for three different periods with varying-uncertainty levels, namely the pre- and the post- Trump’s inauguration periods and the period of rising anxiety over COVID-19. Our results reveal that in the period after the Trump inauguration, coal and oil (renewable energy) have become less (more) volatile but are relatively more (less) responsive to good news. The conditions however became worse with the onslaught of the coronavirus pandemic. COVID-19 adversely affects investment in oil, coal and renewable energy stock markets, though with varying levels. This virus persists to strongly hit fossil fuels demand because of the stringent containment measures. It also poses a huge threat to the timely deployment of renewables and their contributions to the renewable energy progress. These findings have relevant implications for risk management and policy designs.

Study of Caspian energy markets via a hybrid index for energy demand security in Caspian countries in years 2020 and 2030

Establishment of demand security is a key incentive to boosting oil and gas investments in countries, thus, making the study of demand security also critical. In the present research, the primary aim is to explore the capacity of Caspian Markets in establishing energy demand security in the Caspian region and investigate its impact on oil and gas exports from the region. Therefore, additional factors such as political issues, international support and geographical limitations should also be considered for the determination of energy demand security. To address this need, a hybrid index is proposed that characterizes energy demand security in the Caspian region. In this research, we have looked at the countries of the Caspian region as a collective identity and we have avoided looking at the particular country of the Caspian region. In this study, we have used analytic hierarchy process (AHP method) to make hybrid index (Caspian energy demand security index). Results produced by the hybrid index demonstrate the superior state of Iran and Russia’s swap markets in establishing demand security in the Caspian region in the years 2020 and 2030 when compared to the markets of China, European Union (EU) and India that follow, respectively. The exception to this trend is that in 2030, the European Union will demand more Caspian gas than China.

Survive, Revive, Thrive: Chapter 4: Opening the Sails

Only put off until tomorrow what you are willing to die having left undone. - Pablo Picasso, Spanish painter/sculptor, 1881-1973 It’s Time To Look at the Horizon “Opening our sails” is a metaphor that the worst of the storm has passed or is passing, and it is time to get our-selves shipshape, making necessary repairs and preparations, and get back on course. As individuals, and certainly as SPE, we must be ready to cautiously open our sails. The pandemic may be at or near its peak, and despite relatively strong economic performance in most sec-tors, we know that the global economy remains fragile. As an industry, we don’t have the luxury of waiting. We must provide energy and feedstock in advance of global needs, so it is time to get busy and plan not for what was but for what will be. The energy map, meaning the needs, resources, economies, and priorities of the world, is changing. The oil and gas industry will continue to adapt, but as I have mentioned many times, the need for the service we provide is greater now than ever before. We need to be prepared for both increasing demand and public apathy for what we do. This is nothing new, and capital investments in oil and gas should begin to increase as we enter the new year. Perhaps not at the rates we saw during the “shale revolution,” but investors know how essential we are to a strong global economy and will act accordingly. I believe Picasso was right. We must develop the discipline to sacrifice for our passions completely, for what we are doing is too important to wait and too important to sleep. Person-ally, I have a compulsive need to serve and to create. The service part probably came from having older parents who came from, let’s say, very modest circumstances, and the creative part perhaps from the desire to take things apart and put them back together with the fewest possible parts left over. I mention this because each of us has an artist, a writer, an engineer, a doctor, and maybe even a mad scientist inside them. And each of us has our own compulsions. In the post-pandemic, we need to channel that same discipline that Picasso implies. Our passions are our compass, and our energy derives from our compulsion to fulfill those passions. My challenge to you, as an industry, is to align your passions. Someone recently told me that the pandemic had provided us the opportunity of a generation to realign our priorities. I believe it is the opportunity of a lifetime. We can choose to fear the future, or we can create it. It is that simple.

The Challenges of Oil Investing: Contango and the Financialization of Commodities

The ability of oil investment vehicles to perfectly track spot oil has always been challenging, however recently many vehicles have underperformed spot oil. We study the behavior of oil futures and exchange-traded products that invest in oil futures to document and understand the source of this tracking error. The primary reason that oil investment vehicles have underperformed spot oil is due to an increase in contango in oil futures markets that we find might be related to investment crowding and the financialization of commodity markets. We show that from 2006 to 2017 oil futures investing underperformed spot oil and the market was in contango most of the time. Proxies for crowding, such as the concentration of major oil investors and changes in assets under management and fund flows of major oil exchange-traded products are associated with contango in the futures markets and the divergence between futures and spot returns. We also provide evidence of an impact of the financialization on oil futures prices.

The share of investments in gold and oil using the example of selected European stock exchanges– A comparative analysis

In this article, optimal investment portfolios with minimal risk and maximum efficiency were calculated. The portfolios were designated for ten selected European stock exchanges, based on the listi...

China’s Oil Security in the Context of Energy Revolution: Changes in Risks and the Hedging Mechanism

Does China’s energy revolution strengthen or weaken its oil security? This study analyzes how the energy revolution influences China’s oil security by exploring the changes in risks and the hedging mechanism. China proposed the energy revolution in 2014, committed to carbon peak by 2030 and carbon neutrality by 2060, aiming to accelerate its energy transition. Meanwhile, China has a high oil import dependency due to its rapid economic development and lack of domestic oil resources, which challenges its oil security. The government and the national oil companies (NOCs) are the main actors to ensure China’s oil supply. Based on the interactions between the government and the NOCs, the overseas oil investments and the domestic oil production and strategic petroleum reserves, together with the maritime oil transportation and continental pipelines, provide alternatives for China’s oil supply in general and in wartime in particular, thus forming the hedging mechanism for China’s oil security. Notably, the energy revolution alters the way energy and geopolitics interact, and the development of renewables in China and other states in the world mitigates geopolitical risks by making China and the world less dependent on unstable oil production regions. Lastly, the energy revolution triggers changes in the hedging mechanism for China’s oil security due to the buildup of oil reserves including the commercial oil reserves, the arduous development of domestic oil output, and the drop in overseas oil investments but increase in foreign renewables investments. And thus, China’s oil security and its capabilities to respond to potential oil supply interruptions have changed accordingly. This paper not only contributes to understanding China’s oil security in the context of the energy revolution by analyzing the changes in the hedging mechanism, but also stimulates thinking about the impacts of the energy transition on fossil energy security.

Open acreage concession process: new Brazilian mecanism to attract oil and gas upstream investments

Open acreage concession process: new Brazilian mecanism to attract oil and gas upstream investments

A multi-objective optimization approach for the selection of overseas oil projects

Most good quality overseas oil projects, high in investment returns and abundant in resources, are located in politically unstable regions, where competing objectives present great challenges for investors to make informed decisions. Moreover, most of the existing models are single objective and do not adequately incorporate the unique characteristics of overseas oil investment. To bridge these gaps, this study develops a Non-linear Multi-objective Binary Program (NMBP) to optimize the investment portfolios under three competing objectives. A solution algorithm is developed to solve this multiple objective program by integrating Non-dominated Sorting Genetic Algorithm II (NSGA-II) with Technique for Order Preference by Similarity to Ideal Solution (TOPSIS). NSGA-II searches for the pareto set of optimal investment portfolios and TOPSIS determines the best compromise solution based on the investors’ preferences. Finally, China’s oil investment in the Belt and Road Initiative countries is taken as a case study to demonstrate the feasibility and effectiveness of the proposed approach.

The economic impacts of foreign direct investment in oil and gas sector: A CGE analysis for iranian economy

Abstracts FDI not only increases capital supply in the host country, but can also improve the productivity of domestic firms through knowledge transfer. Dutch diseases and technology spillover can be some of the important effects of FDI in the oil and gas (OIG) sector. The Dutch disease refers to the problems associated with negative consequences of large increases in a country's raw materials such as oil and gas. However, affecting productivity depends on the absorptive capacity or the ability to adapt foreign technology by domestic firms. If Foreign direct investment (FDI) inflow is without productivity spillover, it may have negative effects on economy, especially if the destination of FDI is sectors such as Oil and gas sector(OIG). FDI not only plays a vital role in the development of this sector, but also significantly affects the macro and micro levels. Identifying the type and extent of these effects on economy requires quantitative and empirical evaluations. Therefore, the current research has tried to study the effects of FDI in the OIG sector on Iran's economy using a regional CGE model. The results showed that if FDI does not lead to productivity spillover, it causes Dutch disease in the economy of Iran. Production and employment have decreased in tradable and increased in non-tradable sectors. If FDI improves productivity of the firms, the impacts of Dutch disease will be reduced or eliminated. Therefore, production will be improved in all sectors, and consumer price index will decrease. In this regard, the absorptive capacity of domestic firms plays an important role in the extent of technology spillover and finally reducing the impact of Dutch disease.

Oil volatility forecasting and risk allocation: evidence from an extended mixed-frequency volatility model

ABSTRACT This paper proposes a novel GARCH-MIDAS-SK (G-M-SK) model that improves the basic GARCH-MIDAS (G-M) model by incorporating time-varying skewness and kurtosis. We employ our model with data concerning macroeconomic fundamentals to investigate in-sample fit and out-of-sample prediction of volatility in crude oil prices. Empirical results suggest that G-M-SK models produce the better in-sample fit than basic G-M models do. This result is also robust for the subsample of the oil market. It is equally noteworthy that modelling low-frequency macroeconomic variables better reveals the long-term volatility from time-varying skewness and kurtosis. More importantly, G-M-SK model significantly and robustly improves accuracy in predicting oil volatility. In particular, we find that data regarding macroeconomic fundamentals contribute more to forecasting volatility in oil prices than their variance does. Finally, our G-M-SK model more precisely calculates the utility incident to minimizing risk and allocating portfolios. Its results are consistent with out-of-sample forecasting results. These results are beneficial to the decision-making of the crude oil investors and policymakers alike.

Oil shocks and subnational public investment: The role of institutions in regional resource curse

Theoretical and empirical studies on oil price shocks have mainly focused on measuring its relationship with national macroeconomic performance in developing countries. Nevertheless, research is scarce on the effects of natural resource booms on local governments and even more on public investment. Using a difference-in-differences strategy, this paper contributes to identifying the causal effects of the recent oil boom in Colombia (2008–2016) on subnational public investment. Our results suggest that the rise in international oil prices had mostly positive and disproportionate effects on public investment in oil producing departments and municipalities. Although municipalities and departments prioritized different sectors, both increased their investments in sectors with high social returns suggesting a lower likelihood of a resource curse. We also found that an institutional reform in 2012 was a source of heterogeneity and the main driver of the causal effects on subnational public investments.

Calculating the Training Return on Investment (ROI) In Pars Oil & Gas Company (P.O.G.C)

Calculating the Training Return on Investment (ROI) In Pars Oil & Gas Company (P.O.G.C)

Risk assessment of transnational oil investment in Central Asia using a fuzzy comprehensive evaluation method

Central Asia (including five countries: Kazakhstan, Kyrgyzstan, Turkmenistan, Uzbekistan, and Tajikistan) is rich in oil reserves and has become one of the most important target regions for global oil investment. The construction of the Silk Road Economic Belt has prompted Central Asia to look outwards for more collaborations in the oil industry. China's need for oil investment in Central Asia has also increased significantly. This research established a comprehensive index system for assessing the risks of transnational oil investment in Central Asia. The system incorporated political, regulatory, economic, social, and infrastructural indices. Based on the Delphi method and fuzzy comprehension evaluation method, we qualitatively and quantitatively assessed and analyzed the risks of transnational oil investment in Central Asia. The results indicate that the risk score for regulatory risk was highest with the value of 6.1670, indicating a high risk level in transnational oil investment, followed by economic, social, political, and infrastructural risk indices. Of the 18 secondary risk indices calculated, there were seven indices with the probability of high risk occurrence exceeded 30.0% and the descending order was as follows: establishment of mining rights; host country intervention in operations; taxing system; stability of regulations; war and turmoil; labor capital; and ethnic, cultural, and religious differences. These seven critical risks should be watched closely and avoided during transnational oil investment in Central Asia. This study provides a comprehensive understanding of the potential risks of investing oil in Central Asia. The findings demonstrate the causes of these risks and provide a scientific basis for reasonably avoiding oil investment risk and improving investment benefits for both host and investing countries.