Investment in deepwater oil and gas exploration projects:a multi-factor analysis with a real options model

Deepwater oil and gas projects embody high risks from geology and engineering aspects, which exert substantial influence on project valuation. But the uncer- tainties may be converted to additional value to the projects in the case of flexible management. Given the flexibility of project management, this paper extends the classical real options model to a multi-factor model which contains oil price, geology, and engineering uncertainties. It then gives an application example of the new model to evaluate deepwater oil and gas projects with a numerical analytical method. Compared with other methods and models, this multi-factor real options model contains more project information. It reflects the potential value deriving not only from oil price variation but also from geology and engi- neering uncertainties, which provides more accurate and reliable valuation information for decision makers.

Formation conditions and exploration direction of large natural gas reservoirs in the oil-prone Bohai Bay Basin, East China

The Bohai Bay Basin is a typical oil-prone basin, in which natural gas geological reserves have a small proportion. In this basin, the gas source rock is largely medium-deep lake mudstone with oil-prone type Ⅱ2-Ⅱ1 kerogens, and natural gas preservation conditions are poor due to active late tectonic movements. The formation conditions of large natural gas fields in the Bohai Bay Basin have been elusive. Based on the exploration results of Bohai Bay Basin and comparison with large gas fields in China and abroad, the formation conditions of conventional large-scale natural gas reservoirs in the Bohai Bay Basin were examined from accumulation dynamics, structure and sedimentation. The results show that the formation conditions of conventional large natural gas reservoirs in Bohai Bay Basin mainly include one core element and two key elements. The core factor is the strong sealing of Paleogene "quilt-like" overpressure mudstone. The two key factors include the rapid maturation and high-intensity gas generation of source rock in the late stage and large scale reservoir. On this basis, large-scale nature gas accumulation models in the Bohai Bay Basin have been worked out, including regional overpressure mudstone enriching model, local overpressure mudstone depleting model, sand-rich sedimentary subsag depleting model and late strongly-developed fault depleting model. It is found that Bozhong sag, northern Liaozhong sag and Banqiao sag have favorable conditions for the formation of large-scale natural gas reservoirs, and are worth exploring. The study results have important guidance for exploration of large scale natural gas reservoirs in the Bohai Bay Basin.

Nanopore structure comparison between shale oil and shale gas:examples from the Bakken and Longmaxi Formations

In order to analyze and compare the differences in pore structures between shale gas and shale oil formations, a few samples from the Longmaxi and Bakken Formations were collected and studied using X-ray diffraction, LECO TOC measurement, gas adsorption and field-emission scanning electron microscope. The results show that samples from the Bakken Formation have a higher TOC than those from the Longmaxi Formation. The Longmaxi Formation has higher micropore volume and larger micropore surface area and exhibited a smaller average distribution of microsize pores compared to the Bakken Formation. Both formations have similar meso-macropore volume. The Longmaxi Formation has a much larger meso-macropore surface area, which is corresponding to a smaller average meso-macropore size. CO_2 adsorption data processing shows that the pore size of the majority of the micropores in the samples from the Longmaxi Formation is less than 1 nm, while the pore size of the most of the micropores in the samples from the Bakken Formation is larger than 1 nm. Both formations have the same number of pore clusters in the 2–20 nm range, but the Bakken Formation has two additional pore size groups with mean pore size diameters larger than 20 nm. Multifractal analysis of pore size distribution curves that was derived from gas adsorption indicates that the samples from the Longmaxi Formation have more significant micropore heterogeneity and less meso-macropore heterogeneity. Abundant micropores as well as mesomacropores exist in the organic matter in the Longmaxi Formation, while the organic matter of the Bakken Formation hosts mainly micropores.

Risk measurement of international oil and gas projects based on the Value at Risk method

International oil and gas projects feature high capital-intensity, high risks and contract diversity. Therefore, in order to help decision makers make more reasonable decisions under uncertainty, it is necessary to measure the risks of international oil and gas projects. For this purpose, this paper constructs a probabilistic model that is based on the traditional economic evaluation model, and introduces value at risk(VaR) which is a valuable risk measure tool in finance, and applies Va R to measure the risks of royalty contracts, production share contracts and service contracts of an international oil and gas project. Besides, this paper compares the influences of different risk factors on the net present value(NPV) of the project by using the simulation results. The results indicate:(1) risks have great impacts on the project's NPV, therefore, if risks are overlooked, the decision may be wrong.(2) A simulation method is applied to simulate the stochastic distribution of risk factors in the probabilistic model. Therefore, the probability is related to the project's NPV, overcoming the inherent limitation of the traditional economic evaluation method.(3) VaR is a straightforward risk measure tool, and can be applied to evaluate the risks of international oil and gas projects. It is helpful for decision making.

Diffusion coefficients of natural gas in foamy oil systems under high pressures

The diffusion coefficient of natural gas in foamy oil is one of the key parameters to evaluate the feasibility of gas injection for enhanced oil recovery in foamy oil reservoirs. In this paper, a PVT cell was used to measure diffusion coefficients of natural gas in Venezuela foamy oil at high pressures, and a new method for deter- mining the diffusion coefficient in the foamy oil was de- veloped on the basis of experimental data. The effects of pressure and the types of the liquid phase on the diffusion coefficient of the natural gas were discussed. The results indicate that the diffusion coefficients of natural gas in foamy oil, saturated oil, and dead oil increase linearly with increasing pressure. The diffusion coefficient of natural gas in the foamy oil at 20 MPa was 2.93 times larger than that at 8.65 MPa. The diffusion coefficient of the natural gas in dead oil was 3.02 and 4.02 times than that of the natural gas in saturated oil and foamy oil when the pressure was 20 MPa. However, the gas content of foamy oil was 16.9 times higher than that of dead oil when the dissolution time and pressure were 20 MPa and 35.22 h, respectively.

Synthesis and mechanism of environmentally friendly high temperature and high salt resistant lubricants

With the exploration and development of deep and ultra-deep oil and gas,high torque and high friction during the drilling of deep and ultra-deep wells become one of the key issues affecting drilling safety and drilling speed.Meanwhile,the high temperature and high salt problem in deep formations is prominent,which poses a major challenge to the lubricity of drilling fluids under high temperature and high salt.This paper reports an organic borate ester SOP as an environmentally friendly drilling fluid lubricant.The performance evaluation results show that when 1%lubricant SOP is added to the fresh water-based mud,the lubrication coefficient decreases from 0.631 to 0.046,and the reduction rate of lubrication coefficient is 92.7%.Under the conditions of 210℃ and 30%NaCl,the reduction rate of lubricating coefficient of the base slurry with 1%SOP was still remain 81.5%.After adding 1%SOP,the wear volume decreased by 94.11%compared with the base slurry.The contact resistance experiment during the friction process shows that SOP can form a thick adsorption film on the friction surface under high temperature and high salt conditions,thus effectively reducing the friction resistance.Molecular dynamics simulation shows that lubricant SOP can be physically adsorbed on the surface of drilling tool and borehole wall through hydrogen bond and van der Waals force.XPS analysis further shows that SOP adsorbs on the friction surface and reacts with metal atoms on the friction surface to form a chemically reactive film.Therefore,under high temperature and high salt conditions,the synergistic effect of physical adsorption film and chemical reaction film effectively reduces the frictional resistance and wear of the friction surface.In addition,SOP is non-toxic and easy to degrade.Therefore,SOP is a highly effective and environmentally friendly lubricant in high temperature and high salt drilling fluid.

SI Engine Fueled with Gasoline, CNG and CNG-HHO Blend: Comparative Evaluation of Performance, Emission and Lubrication Oil Deterioration

Hydroxy gas (HHO) is one of the potential alternative fuels for spark ignition (SI) engine,notably due to simultaneous increase in engine performance and reduction in exhaust emissions.However,impact of HHO gas on lubrication oil for longer periods of engine operation has not yet been studied.Current study focuses on investigation of the effect of gasoline,CNG and CNG-HHO blend on lubrication oil deterioration along with engine performance and emissions in SI engine.HHO unit produces HHO gas at 4.72 L/min by using 6 g/L of KOH in the aqueous solution.CNG was supplied to the test engine at a pressure of 0.11 MPa using an electronically controlled solenoid valve.Engine tests were carried out at different speeds at 80%open throttle condition and various performance parameters such as brake power (BP),brake specific fuel consumption(BSFC),brake thermal efficiency (BTE),exhaust gas temperature and exhaust emissions (HC,CO_(2),CO and NO_(x))were investigated.In addition,various lubrication oil samples were extracted over 120 h of engine running while topping for drain out volume and samples were analyzed as per ASTM standards.CNG-HHO blend exhibited better performance i.e.,15.4%increase in average BP in comparison to CNG,however,15.1%decrease was observed when compared to gasoline.CNG-HHO outperformed gasoline and CNG in the case of HC,CO_(2),CO and brake specific fuel consumption (31.1%decrease in comparison to gasoline).On the other hand,CNG-HHO produced higher average NO_(x) (12.9%) when compared to CNG only.Furthermore,lubrication oil condition(kinematic viscosity,water contents,flash point and total base number (TBN)),wear debris (Iron (Fe),Aluminum(Al),Copper (Cu),Chromium (Cr)) and additives depletion (Zinc (Zn),Calcium (Ca)) presented a significant degradation in the case of CNG-HHO blend as compared to gasoline and CNG.Lubrication oil analyses illustrated 19.6%,12.8%and 14.2%decrease in average viscosity,flash point and TBN for CNG-HHO blend respectively.However,average water contents,Fe,Al and Cu mass concentration appeared 2.7%,25×10^(-6),19×10^(-6),and 22×10^(-6) in lubrication oil for CNG-HHO respectively.

CO_2-triggered gelation for mobility control and channeling blocking during CO_2 flooding processes

CO2 flooding is regarded as an important method for enhanced oil recovery （EOR） and greenhouse gas control. However, the heterogeneity prevalently dis- tributed in reservoirs inhibits the performance of this technology. The sweep efficiency can be significantly reduced especially in the presence of ＂thief zones＂. Hence, gas channeling blocking and mobility control are important technical issues for the success of CO2 injection. Normally, crosslinked gels have the potential to block gas channels, but the gelation time control poses challenges to this method. In this study, a new method for selectively blocking CO2 channeling is proposed, which is based on a type of CO2-sensitive gel system （modified polyacry- lamide-methenamine-resorcinol gel system） to form gel in situ. A CO2-sensitive gel system is when gelation or solidification will be triggered by CO2 in the reservoir to block gas channels. The CO2-sensitivity of the gel system was demonstrated in parallel bottle tests of gel in N2 and CO2 atmospheres. Sand pack flow experiments were con- ducted to investigate the shutoff capacity of the gel system under different conditions. The injectivity of the gel system was studied via viscosity measurements. The results indi- cate that this gel system was sensitive to CO2 and had good performance of channeling blocking in porous media. Advantageous viscosity-temperature characteristics were achieved in this work. The effectiveness for EOR in heterogeneous formations based on this gel system was demonstrated using displacement tests conducted in double sand packs. The experimental results can provide guideli- nes for the deployment of theCO2-sensitive gel system for field applications.

A parametric study of the hydrodynamic roughness produced by a wall coating layer of heavy oil

In water-lubricated pipeline transportation of heavy oil and bitumen, a thin oil film typically coats the pipe wall. A detailed study of the hydrodynamic effects of this fouling layer is critical to the design and operation of oil-water pipelines, as it can increase the pipeline pressure loss （and pumping power requirements） by 15 times or more. In this study, a parametric investigation of the hydrodynamic effects caused by the wall coating of viscous oil was conducted. A custom-built rectangular flow cell was used. A validated CFD-based procedure was used to determine the hydrodynamic roughness from the measured pressure losses. A similar procedure was followed for a set of pipe loop tests. The effects of the thickness of the oil coating layer, the oil viscosity, and water flow rate on the hydrodynamic roughness were evaluated. Oil viscosities from 3 to 21300 Pa s were tested. The results show that the equivalent hydrodynamic roughness produced by a wall coating layer of viscous oil is dependent on the coating thickness but essentially independent of oil viscosity. A new correlation was developed using these data to predict the hydrodynamic roughness for flow conditions in which a viscous oil coating is produced on the pipe wall.

Purification of Orange Roughy Oil

In this work, some treatments of the orange roughy oil have investigated by analysis of UV - Visible spectra and gas chromatography. When the raw oil is treated by thepartial hydrogenation under ordinary pressure at 100℃, not only the highly unsaturatcd fatty oil will be reduced partially, but also the odor and re - odor of the fish oil would be decreased.

Hydrocarbon-Generating Model of the Area Covered With Volcanic Rock

The distribution of Oil & gas fields shows their close relationship with the most active tectonic regions. This is not a coincidence but having a scientific reasons. The crustal active regions, refer to the places where the active natural earthquake, volcanic activities, underground water happened, and the areas of the leaking Off of natural gas to the surface of the crust. The magma of volcanic activities brings the organic "kitchen range body" hydrocarbon - generating model and inorganic genetic hydrocarbon to the regions covered by volcanic rock. Underground water brings a catalytic hydrocarbon generating model for organic matter, and the leaking - off of H2 and CO2 contributes a synthetic hydrocarbon - generating model. Volcanic activities bring the assemblage of Source, Reservoir and Seal formed by the sediments and magma the sedimentary basins, and the hydrocarbon - generating system with a "water - volcano" binary structure is formed. All these conditions are favorable and excellent for the formation of oil & gas fields. The distribution of AInerican oil & gas fields have very close relationship with the mines of Fe, Mn, Cr, Mo, W and V, deposits of Zn, Cu, V, Pb, Al and Hg, and the deposits of fluorite, sulfur, potassium salt, phosphate and halite, and the distribution of sulfate - chloride of river water. The reason why few oil & gas fields discovered in the regions covered by volcanic rock in western America maybe because of the view of "inconsistency between petroleum and volcano". Further more, It’s very difficult to carry out a geophysical exploration in such kinds of regions. This paper examined a few hydrocarbon - generating models (systems) mentioned above and came up with some flesh ideas on the exploration in the areas covered with volcanic rocks.

Utilizing an auxiliary portable lube oil heating system in Aliabad Katoul-Iran V94.2 gas turbine during standstill mode:a case study

In a gas turbine power plant,the lubrication oil must be hot enough for the turbine start-up where the unit is in standstill mode.Currently,the strategy to heat the lubrication oil of ANSALDO V94.2 gas turbine power plant is operating the units in turning gear mode or interval mode.However,these strategies cause to suffering the power plant from high power consumption rate and aging.In this study,an auxiliary portable heating system was added to the unit 5 of the MAPNA built MGT-70(an Iranian version of V94.2)Aliabad Katoul-Iran power plant for increasing the lube oil temperature.Irreversibility,cost-effectiveness,and availability of the proposed heating system are studied by the concepts of exergy,economy,and reliability analyses,respectively.The result of the exergy analysis shows that by using the auxiliary portable lube oil heating system the exergy destruction decreases about 94.7%and 92.6%in comparison with turning gear mode and interval mode,respectively.The result of the economic analysis shows that the auxiliary portable heating system consumes less power rather than turning gear mode.Moreover,it is a cost-effective system which has no penalty and no non-profit production.Finally,the reliability analysis shows that the auxiliary portable lube oil heating system is a reliable tool during its lifetime.

Reservoir forming conditions and key exploration technologies of Lingshui 17-2 giant gas field in deepwater area of Qiongdongnan Basin

On September 15,2014,China National Offshore Oil Co.,Ltd announced that a high production of oil and gas flow of 1.6
106 m3/d was obtained in Well LS17-2-1 in deepwater area in northern South China Sea,which is the first great oil and gas discovery for self-run deepwater exploration in China sea areas,and a strategic breakthrough was made in natural gas exploration in deepwater area of Lingshui sag in Qiongdongnan Basin.Under the combined action of climax of international deepwater exploration,high oil prices,national demands of China,practical needs of exploration,breakthroughs in seismic exploration and testing technologies,innovations in geological cognition and breakthroughs in deepwater operation equipment,Lingshui 17-2 gas field is discovered.Among these factors,the innovation in reservoir forming geological cognition directly promotes the discovery.The quality of seismic data in the early time is poor,so key reservoir forming conditions such as effective source rocks,high quality reservoirs and oil-gas migration pathways are unable to be ascertained;with support of new seismic acquisition and processing technology,some researches show that Lingshui sag is a successive large and deep sag with an area of 5000 km2 and the maximum thickness of Cenozoic stratum of 13 km.In the Early Oligocene,the Lingshui sag was a semi-closed delta-estuarine environment,where the coalmeasure and marine mudstones in Lower Oligocene Yacheng Formation were developed.The Lingshui sag is a sag with high temperature,and the bottom temperature of source rocks in Yacheng Formation can exceed 250C,but the simulation experiment of hydrocarbon generation at high temperature indicates that the main part of this set of source rock is still in the gas-generation window,with resources of nearly 1 trillion cubic meters,so the Lingshui sag is a hydrocarbon-rich generation sag.In the Neogene,the axial canyon channel from the Thu Bon River in Vietnam passed through the Lingshui sag,and five stages of secondary channels were developed in the axial canyon channel,where four types of reservoirs with excellent physical properties including the axial sand,lateral accretion sand,natural levee sand as well as erosion residual sand were developed,and lithologic traps or structural-lithologic traps were formed.The diapiric zone in the southern Lingshui sag connects deep source rocks in Yacheng Formation and shallow sandstones in the channels,and the migration pattern of natural gas is a T-type migration pattern,in other words,the natural gas generated from Yacheng Formation migrates vertically to the interior of the channel sandbody,and then migrates laterally in the channel reservoirs and forms the reservoirs.Innovations of geophysical exploration technologies for complicated geological conditions of deepwater areas are made,such as the detuning comprehensive quantitative amplitude hydrocarbon detection technology,which greatly improves the success rate of deepwater exploration;key technologies of deepwater safety exploratory well testing represented by the platform-dragged riser displacement technology are developed,which greatly reduces the drilling test cost.The above key exploration technologies provide a strong guarantee for the efficient exploration and development of Lingshui gas field.

Aircraft Clean Air Requirements Using Bleed Air Systems

There are certification and airworthiness requirements relevant to the provision of clean breathing air in the crew and passenger compartments. There have been continuing reports and studies over the years regarding oil fumes in aircraft, including impaired crew performance. Oil fumes are viewed in varying ways ranging from rare seal bearing failures, to low level leakage in normal flight. A Masters of Science (MSc) research degree was undertaken to assess whether there is any gap between the certification requirements for the provision of clean air in crew and passenger compartments, and the theoretical and practical implementation of the requirements using the bleed air system. A comprehensive literature search reviewed applicable certification standards, documented and theoretical understanding of oil leakage. Two types of interviews were conducted to address the research questions. Key aviation regulators were questioned about the process by which they certify and ensure compliance with the clean air requirements. Aerospace engineers and sealing professionals were interviewed about their understanding of how oil may leak past compressor oil bearing seals, and into the air supply under various flight conditions. The outcome of the research showed that there is a gap between the clean air certification requirements, and the theoretical and practical implementation of the requirements using the bleed air system. Low level oil leakage into the aircraft cabin in normal flight operations is a function of the design of the engine lubricating system and bleed air systems, both utilising pressurised air. The use of the bleed air system to supply the regulatory required air quality standards is not being met or being enforced as required.