Browsing by Subject "Oil and gas industry"

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Counterfactual analysis of compulsory unitization as a solution to the common pool externality in the oil and gas industry
(2017-05) Herrera, Carlos, Ph. D.; Miravete, E. J. (Eugenio J.); Ryan, Stephen; Town, Robert; Xu, Haiqing
The exploitation of a single oil field by several firms is a typical example of the common pool externality (CPE). As a possible solution to it, regulators have innovated policies that allow such firms to coordinate by selecting a single operator to exploit the whole field. Moreover, every state, but Texas, can even force firms to join a coalition. In this dissertation I analyze the dynamic strategic interaction of firms competing for common resources. By modeling such dynamic interactions, I will be able to counterfactually assess what would happen under different regulatory scenarios. I use the model, along with other techniques, to quantify the loss in production and profits due to the common pool externality; then I explore how implementing different policies that promote or enforce coalition formation would change productivity and welfare. This research is has three main parts. In Chapter 2, I explore the most important institutional details, and simulate how the characteristics of a reservoir, the composition of the hydrocarbons, and the distribution of firms in a field affect the outcome of coordination. In Chapter 3, I use different reduced form techniques to estimate how implementing compulsory unitization in New Mexico has improved welfare. In Chapter 4, I develop a random stopping model and estimate the parameters using the methodology developed by Bajari and Levin, 2007. Once the parameters of the model are estimated, I will be able to explore my different research questions. The results suggest that relaxing the restrictions in voluntary unitization would increase welfare at a lesser scale than implementing compulsory unitization. Nevertheless, none of these policies will nullify the entire negative effect caused by the common pool externality.
Developing an optimization model for a cap and trade system to control methane emissions in the oil and natural gas industry : application to the Permian Basin
(2016-12) Correa Vivar, Luciano Livio; Fisher, W. L. (William Lawrence), 1932-; Dyer, James S; Scanlon, Bridget R
Development of unconventional oil and natural gas in the U.S., particularly the exploitation of shale gas, has been highly controversial with significant geopolitical implications. It is unquestionable that this so-called “golden era” of natural gas has brought not only significant new technologies and economic growth but has also raised important environmental concerns, including air pollution from methane emissions. Methane (CH₄) emissions from the oil and natural gas industry have been of critical and increasing concern for public policy. New evidence (Zeebe, et al. 2016) has confirmed record high levels of carbon dioxide (CO₂) in 66 million years, with CH₄ emissions considered a significant risk for global warming and climate change. For this reason, the U.S. Environmental Protection Agency (EPA) issued in 2016 a new “methane rule” to control emissions from the oil and gas industry by obligating the use of specific abatement measures to reduce pollution. This study analyzes the application of an optimization model to represent a market-based strategy of a cap and trade system as an alternative approach to regulating emissions. This option is more efficient than traditional command and control regulations at achieving the same levels of methane reduction in the oil and gas sector, and this hypothesis is verified by applying the optimization model to a sample of oil and gas production facilities operating in the Permian Basin. In spite of all the political-scientific efforts and discussions, we are still far from the knowledge needed to achieve a public policy strategy that balances sustainability with economic development, and I hope this research helps to reduce that gap.
Eagle Ford shale : evaluation of companies and well productivity
(2016-08) Chavez Urbina, Grecia Alexandra; King, Carey Wayne, 1974-; Lake, Larry W.
Unconventional resources, particularly shale reservoirs, are a significant component in oil and gas production in the United States as they represent (as of May 2015) 48 and 58 percent, respectively, of the total oil and gas produced. However, there has been a deceleration on oil and gas production in general because of low market prices. The drastic decline in oil and gas prices that started in 2014 has companies struggling to continue their operations, resulting in negative financial outcomes for 2015 for most companies. The present work examines the financial results of three companies, EOG Resources, Pioneer Natural Resources, and Chesapeake Energy, along with their particular well productivity using the Logistic Growth model to forecast production in one of the most prolific shale plays in the United States, the Eagle Ford. This work also examines the economic feasibility of drilling new wells when oil prices are low using a discounted cash flow model for each company. The financial analysis shows that from the three companies, Pioneer Natural Resources has the best financial results; its high cash-flow-to-debt ratio, and low debt and debt-to-equity ratios make it an attractive company to invest in. In contrast, Chesapeake has the worst results which represents high risk for investors, and EOG has moderate results that still make it a good company to invest in. The discounted cash flow model demonstrate that under the cost assumptions and estimated production used in this work, EOG gets the best results from their wells located in the Eagle Ford with break-even prices bordering the 40 $/bbl compared to the other companies with break-even prices above 87 $/bbl for Pioneer and 89 $/bbl for Chesapeake. From the discounted cash flow model, it can also be concluded that none of the companies in the analysis is expected to gain revenue from drilling new wells if oil prices are under 40 $/bbl, and that companies that are quick to respond to the low prices by reducing their drilling and completion costs can significantly improve their well economics.
Econometric analysis of the impact of market concentration on prices in the offshore drilling rig market
(2010-12) Onwuka, Amanda Chiderah; Jablonowski, Christopher J.; Groat, Charles G.
This thesis presents an econometric methodology for analyzing the impact of market concentration (HHI) on the day rate prices paid by E&P operators for the lease of drilling rigs. It is an extension of the work of Lee (2008), ‘Measuring the Impact of Concentration in the Drilling Rig Market’. Specifically, the work entailed using a more detailed time series data than was initially used (quarterly), analyzing impact of concentration on day rate prices by water depth specification of drilling rigs, and accounting for the impact of autocorrelation on the analysis. The results for jack-ups, without adjustment for autocorrelation, supported the results of the prior study i.e. showing that increase in HHI causes rig day rate price increase. However, the results for semi-submersibles was inconclusive as it varied from region to region and also was contrary to the assumptions of positive relationships between HHI and day rate prices made in this study. These results imply that market concentration caused both price increase and decrease within the industry depending on whether it increased market power or increased cost efficiency and technological ability.
Modeling of horizontal drilling
(2016-05) Varala, Vinod Kumar; Chen, Dongmei, Ph. D.; Longoria, Raul G
While majority of today’s oil wells employ directional drilling technology (deviated, extended reach and horizontal wells), a thorough understanding of the drill string dynamics is necessary to increase the drilling efficiency. Wellbore in such wells spans long horizontal distances through the shale to extract oil and natural gas effectively. Very long slender drill pipes transmit the required torque and cutting force through miles of distance from the earth’s surface to the drill bit. Drill string is subjected to different loads and torques which can cause coupled random excitations and failure of its components (drill pipes, bit, sensor tools and wellbore) eventually. If left unnoticed, these vibrations can cause stuck pipe and reduced rate of penetration, both of which are heavily cost dependent. Identifying the conditions causing harmful vibrations hence would significantly reduce cost and time. Controlling the drill string and bottom hole assembly is one way of mitigating the dynamic instability, which is currently done by means of controlling the rotational speed, torque applied and axial force applied to the drill string. This article presents modeling of horizontal drilling and the comparison of horizontal and vertical drill string dynamics. Drill string components are discretized into lumped elements based on their curvature. A vertical wellbore structure with same drill string components is considered for comparison. The computations are performed in MATLAB. Results and discussions are presented in the later part of the report.
Modeling of NORM dosimetry in onshore oilfields using Monte Carlo methods
(2016-12) Wang, Siqiu; Landsberger, Sheldon
NORM wastes generated in the oil and gas industry create a radioactive environment for the workers in the field. Modeling and understanding the radiation doses contributed by NORM is important in regard to radiation safety. Utilizing the Monte Carlo N-Particle code (MCNP), this work aims to provide a general estimate of the radiation dosage received by the workers. Three models are constructed to simulate the major NORM sources in an onshore oilfield: soil, scale, and sludge. A human phantom is employed to record the absorbed dose rate in each body component. The whole-body dose rate is also observed and compared with current regulations.
The non-commercial objectives of national oil companies
(2015-12) McGroary, Lin; Dzienkowski, John S., 1959-; Spence, David B; Taylor, Melinda E
National oil companies (NOCs) play an important role in the international oil and gas industry; collectively NOCs control approximately 90% of worldwide oil reserves. NOC are either wholly or partially owned by their country’s government, and as such can be used as a tool to meet the government’s aims. An NOC can maximize profits, which maximizes revenues to the government, or the government can use the NOC to fulfill its non-commercial goals. This paper focuses on how non-commercial goals affect profitability and make a national oil company more susceptible to corruption. I argue that NOCs that follow non-commercial goals are less likely to be successful commercially; however there are different non-commercial goals that affect commerciality differently. NOCs that follow specific non-commercial goals, such as economic development, are also more susceptible to corruption, this is because these goals lend themselves to governments that are trying to establish political legitimacy. I look at case studies of six different countries (Saudi Arabia, China, Norway, Venezuela, Nigeria and Russia), and their associated NOCs, to establish how non-commercial goals affect the NOCs. Other factors also affect the commerciality of NOCs; factors such as the legal framework of the country, and whether regulations are well established. I conclude by comparing the national oil companies and their non-commercial objectives and exploring the differences between the companies.