Risk assessment of oil and gas investment environment in countries along the Belt and Road Initiative

With the implementation of the Belt and Road Initiative, China is deepening its cooperation in oil and gas resources with countries along the Initiative. In order to better mitigate risks and enhance the safety of investments, it is of significant importance to research the oil and gas investment environment in these countries for China's overseas investment macro-layout. This paper proposes an indicator system including 27 indicators from 6 dimensions. On this basis, game theory models combined with global entropy method and analytic hierarchy process are applied to determine the combined weights, and the TOPSIS-GRA model is utilized to assess the risks of oil and gas investment in 76 countries along the Initiative from 2014 to 2021. Finally, the GM(1,1) model is employed to predict risk values for 2022-2025. In conclusion, oil and gas resources and political factors have the greatest impact on investment environment risk, and 12 countries with greater investment potential are selected through cluster analysis in conjunction with the predicted results. The research findings may provide scientific decisionmaking recommendations for the Chinese government and oil enterprises to strengthen oil and gas investment cooperation with countries along the Belt and Road Initiative.

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.

Evaluation of the oil and gas preservation conditions, source rocks, and hydrocarbongenerating potential of the Qiangtang Basin: New evidence from the scientific drilling project

The Qiangtang Basin of the Tibetan Plateau,located in the eastern Tethys tectonic domain,is the largest new marine petroliferous region for exploration in China.The scientific drilling project consisting primarily of well QK-1 and its supporting shallow boreholes for geological surveys(also referred to as the Project)completed in recent years contributes to a series of new discoveries and insights into the oil and gas preservation conditions and source rock evaluation of the Qiangtang Basin.These findings differ from previous views that the Qiangtang Basin has poor oil and gas preservation conditions and lacks high-quality source rocks.As revealed by well QK-1 and its supporting shallow boreholes in the Project,the Qiangtang Basin hosts two sets of high-quality regional seals,namely an anhydrite layer in the Quemo Co Formation and the gypsum-bearing mudstones in the Xiali Formation.Moreover,the Qiangtang Basin has favorable oil and gas preservation conditions,as verified by the comprehensive study of the sealing capacity of seals,basin structure,tectonic uplift,magmatic activity,and groundwater motion.Furthermore,the shallow boreholes have also revealed that the Qiangtang Basin has high-quality hydrocarbon source rocks in the Upper Triassic Bagong Formation,which are thick and widely distributed according to the geological and geophysical data.In addition,the petroleum geological conditions,such as the type,abundance,and thermal evolution of organic matter,indicate that the Qiangtang Basin has great hydrocarbon-generating potential.

Study of evaluation method for the overseas oil and gas investment based on risk compensation

The overseas oil and gas investment evaluation is one of the core tasks in overseas investment of oil and gas companies,among which risk evaluation and benefit evaluation are the most important.This paper sets forth transmission paths of risk factors to the investment benefit by identifying 14 overseas oil and gas investment risks in four categories.On the basis of the concept of risk compensation,different compensation mechanisms specific to each risk are designed.The risk and benefit are integrated objectively to develop a comprehensive evaluation model by correcting the recoverable reserve,adjusting benefit evaluation parameters such as investments on exploration and development,and compensating for the changes in risk factors with time through dynamic discount rate.Moreover,two cases studies,namely the evaluations of Project A in Sudan and comparison among Blocks A–G,are used to describe usage method and applicable scope of such evaluation model,respectively.According to the results,oil price is a key influencing factor for enterprise internal risk and industrial risk.Risk compensation reduces comprehensive benefit of overseas oil and gas investment and undermines the investment feasibility and priority of blocks.The research findings of this paper are free from the effects of some subject factors and avoid multi-objective decision making,and also avoid the undesired repeated calculation of risk factors.

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.

Bargaining strategy of oil companies in international oil and gas development Projects-Based on a bilateral bargaining model

Bargaining between the host country and oil companies is very common to international oil and gas development projects.The existence of information asymmetry gives the host country an endogenous bargaining advantage.Foreign oil companies might change their unfavorable negotiating position by changing the order of bidding and adjusting bidding strategies.This paper introduces both factors into a bilateral bargaining model to study the impact of information asymmetry and bidding order on the strategy and equilibrium returns of oil companies.According to the ownership of the right to bid first,two scenarios are designed for the model to compare the equilibrium returns of the host country and oil companies.The results show that:1)There is a first-mover advantage in the process of bilateral bidding,so oil companies better bid first;2)The information asymmetry will lead to a higher nominal income ratio of oil companies and a lower nominal income ratio of the host country,but it doesn’t affect the total income ratio at all.

China Offshore Oil Industry and Foreign Investment

The history of China's offshore oil industry can be traced back to late 1950's when geophysical surveys started in limited offshore areas.Then,in 1960's and 1970's,a few exploratory wells scattered from north down to south were drilled resulting in a number of discoveries with the total proven oil in place being merely 40 million tons.In fact,the China's offshore oil industry in a real sence did not emerge on the horizon until early 1980's when China opened its door to outside world and the China National Offshore Oil Corporation(CNOOC)was born.

Analysis of the world oil and gas exploration situation in 2021

The global exploration investment, new oil and gas discoveries, exploration business adjustment strategies of oil companies in 2021, and future favorable exploration domains are systematically analyzed using commercial databases such as IHS and public information of oil companies. It has been found that the world oil and gas exploration situation in 2021 has continued the downturn since the outbreak of COVID-19. The investment and drilling workload decreased slightly, but the success rate of exploration wells, especially deepwater exploration wells, increased significantly, and the newly discovered reserves increased slightly compared with last year. Deep waters of the passive continental margin basins are still the leading sites for discovering conventional large and medium-sized oil and gas fields. The conventional oil and gas exploration in deep formations of onshore petroliferous basins has been keeping a good state, with tight/shale oil and gas discoveries made in Saudi Arabia, Russia, and other countries. While strengthening the exploration and development of local resources, national, international, and independent oil companies have been focusing on major overseas frontiers using their advantages, including risk exploration in deep waters and natural gas. Future favorable exploration directions in the three major frontiers, the global deep waters, deep onshore formations, and unconventional resources, have been clarified. Four suggestions are put forward for the global exploration business of Chinese oil companies: first, a farm in global deepwater frontier basins in advance through bidding at a low cost and adopt the “dual exploration model” after making large-scale discoveries;second, enter new blocks of emerging hot basins in the world through farm-in and other ways, to find large oil and gas fields quickly;third, cooperate with national oil companies of the resource host countries in the form of joint research and actively participate exploration of deep onshore formations of petroliferous basins;fourth, track tight/shale oil and gas cooperation opportunities in a few countries such as Saudi Arabia and Russia, and take advantage of mature domestic theories and technologies to farm in at an appropriate time.

Status, trends and enlightenment of global oil and gas development in 2021

By analyzing the distribution of global oil and gas fields and the reasons why some oil and gas fields are not in production, the distribution characteristics of oil and gas remaining recoverable reserves and their year-on-year changes, the distribution characteristics of oil and gas production and their year-on-year changes, and the development potential of oil and gas to be tapped in 2021, this paper sorts out systematically the current status and characteristics of global oil and gas development, summaries the major trends of global oil and gas development, puts forward enlightenment for international oil and gas cooperation. In 2021, oil and gas fields were widely distributed, the number of non-producing oil and gas fields was large;the whole oil and gas remaining recoverable reserves declined slightly, unconventional oil and gas remaining recoverable reserves dropped significantly;the overall oil and gas production continuously increased, the outputs of key resource-host countries kept year-on-year growth;undeveloped oilfields had abundant reserves and great development potential. Combined with global oil and gas geopolitics, oil and gas industry development trends, oil and gas investment intensity, and the tracking and judgment of hotspot fields, the major trends of global oil and gas development in 2021 are summarized. On this basis, the four aspects of enlightenment and suggestions for international oil and gas cooperation and development strategies are put forward: attach great importance to the obligation of marine abandonment to ensure high-quality and long-term benefit development of offshore oil and gas;adhere to the principle of not going to dangerous and chaotic places, strengthen the concentration of oil and gas assets, and establish multi stable supply bases;based on the multi-scenario demand of natural gas, realize the transformation from integrated collaboration to full oil and gas industry chain development;increase the acquisition of high-quality large-scale assets, and pay attention to the continuous optimization of the shareholding ratio of projects at different stages.

The Oil Price Crash of 2014: Implications for a Multi-Billion Dollar LNG Project

The price of oil is probably the single most important economic variable in the global economy. The rapid drop in price of oil in 2014 set analysts and commentators busy, trying to predict its trajectory and implications. More than $150 billion of investments have been cancelled by oil companies in 2015 due to the low price of oil, with more spending cuts to follow in 2016. The oil price decline was supposed to catalyze a transfer of wealth from oil-producing countries to oil-consuming countries. It was estimated that a $10-a-barrel fall in the oil price transfers around 0.5 percent of world GDP from oil exporters to oil importers. The recent oil price collapse has far-reaching implications for capital projects in the oil and gas industry. The impact of a fall in oil price is analyzed for a large capital investment project, involving the construction and operation of a liquefied natural gas (LNG) plant. The breakeven price (BEP) of oil for the project is determined.

Large Potential Exists in China's Oil & Gas Transportation System

As China in the decades ahead is to go through significant reorganization in the power sector and the petrochemical industry will see considerable growth,the transportation infrastructure for petroleum and gas should have a new shape. Implementing the largest infrastructure projects and creating on this basis a modern transportation network will not only see a new reincarnation of traditional industrial centers, but also open wider opportunities for regional development.

油品销售企业投资项目后评价思路及方法探讨

项目后评价是项目投资管理的重要环节。目前针对油品销售企业投资项目后评价的评价方法体系尚不成熟。借鉴后评价理论方法体系,结合我国成品油销售行业特点,探讨油品销售企业投资项目的后评价思路和方法。以华东地区某销售企业为例,对后评价方法加以应用,实现投资项目全过程闭环管理,以提高科学决策水平和管理能力,提升油品销售企业发展的质量和效益。

油气项目风险识别与评估方法探讨

绿色低碳、能源转型已经是全球普遍共识和一致行动,中国能源企业在变革中既要保障国家能源安全、实现增储上产,又要推动跨越式发展、增强企业核心竞争力。因而在企业进行投资活动时,对目标项目的开发风险和潜力因素进行充分且全面分析,并以此为基础进行油气资产的价值评估,是实现科学决策的基础。文章重点分析了油气项目面临的主要风险以及应对各类风险的分析方法。通过更合理准确的油气项目资产价值评估结果,能够降低企业投资决策风险,为企业的健康稳健发展提供必要保障。

Chinese Oil Companies＇ Overseas Cooperation in 2016

The paper analyzed the development and features of China's oil companies' overseas business in 2016.Despite the plummeting crude price and a weak global economy,these companies managed to do well in foreign countries.They steadily increased their shares of oil and gas in overseas oil and gas projects with their distinctive and unique ways:the three state-owned oil companies had focused on the countries involved in the One-BeltOne-Road Initiative,and others had been stressed more on international cooperation in a broader sense and areas.The small-and middle-scale companies had been matured and grew during the process.The central and local governments also played indispensable roles by providing need support for the cooperations.

基于层次分析法的海外油气项目投资环境风险定量评价

百年未有之大变局的加速演变叠加全球疫情的影响,给中国海外油气项目带来诸多风险与挑战。中国油气企业需要进一步完善资源国投资环境的风险评估体系,在定性分析的基础上量化风险点,更加全面具体地掌握资源国的投资环境情况,为投资决策提供有效依据。通过对中国的国际油气合作项目进行调研,构建了海外油气项目风险评价指标体系,运用层次分析法对资源环境、法治环境、外交环境、政治环境、经济环境和社会环境这6项一级指标和27项二级指标进行权重计算,选取中亚-俄罗斯、中东、非洲、美洲、亚太这5大油气合作区的重点资源国作为样本进行定量评价,找出资源国投资环境中重要风险点,为海外油气项目投资提供决策依据。

Natural Resource Governance in Unrecognized Settings: What Are Emerging Political, Legal and Fiscal Issues Affecting “Somaliland”?

Somaliland declared independence after the fall of the Central Government of Somalia in 1991. Early peace settlements and state-building efforts led to transitional government and early democratic contestations including presidential elections in a hybrid state framework. This emerging democracy in a conflict-torn region is challenged by weak accountability and power imbalances between the three government branches. Over the past few years, the current ruling party started to engage with foreign companies to carry out exploration activities in onshore blocks utilizing existing information on the distribution of natural resources of oil, and gas and to lesser extent mining. Following an informal auction of selling licenses for resource exploration among various companies, Genel Energy amongst others;Somaliland has no competent institutions in managing revenues for long-term development due to two distinctive factors: 1) absence of strong legal and political frameworks specific to governance of extractive industry;2) weak fiscal regimes across spectrum of extractive companies, the state and investors.

油气田企业投资管理优化方法探讨

在不确定性激增和外部形势复杂多变的时代,中国油气企业要实现高质量发展,必须处理好投资与产能之间“增”与“减”的问题。利用项目池和夹点分析的方法,建立产能项目投资优化数学模型。利用项目池对项目实行分级分类管理,依据不同类型项目的关键指标进行投资优先级排序,实现在产能规模不变的情况下投资规模压减的目标。结果显示,模型在约束条件下可以得出最优解,基本达到预期效果,可以进一步应用于产能和投资的主动管理,提高投资决策的科学合理性。

油气田开发项目后评价若干问题的探讨

项目后评价是投资建设项目管理工作中的一项重要内容。为推动投资项目总结评价和后评价制度的建立,进一步促进油气田开发项目投资决策水平、管理水平和投资效益的提高,本着油气田开发项目后评价工作要突出重点,抓住项目成败关键,总结经验和教训的原则,从油气田开发项目后评价的含义以及报告的主要内容出发,从评价时点、评价方法、服务目的和属性4方面探讨了项目后评价与决策阶段评估的区别,并初步分析了后评价应注意评价方法的对比性、评价依据的客观性、评价内容的全面性、评价范围的一致性、评价重点的突出性、评价工作的动态性以及评价结论的反馈性等方面的相关问题。

论石油天然气工程项目的投资控制

目前,我国原油对外依存度越来越高,2009年已超过50%红线,能源供应形势严峻。但是,我国传统的石油天然气资源仍然还有很大的潜力,如何尽最大能力提高国内原油天然气产量、控制好油气勘探开发投资、提高企业经济效益,是目前国内石油行业必须要面对的问题。本文主要是从石油天然气工程项目设计阶段入手,分析石油天然气项目投资控制的重要环节,提出了石油天然气工程投资控制的七项措施。