Blog

The Value of Exploration

Europe and the Oil Sands

This week a proposal was submitted to revise the EU's Fuel Quality Directive with the aim of categorizing Canada's Oil Sands as "more polluting”. The proposal has been rejected by the first round of committee voting, and is now on its way to the European Council for consideration. I was curious to see if this will have any economic implications for either group, and have tentatively concluded that the answer is, no in the short term, yes in the long term.

Commercial agreements in the oil and gas industry

The oil and gas industry is historically a game of great risk and great returns. Early oil companies played high stakes games by taking all or nothing positions in oil assets. As companies matured their shareholders demanded mitigation of the risks they were willing to accept. This was achieved by sharing the stakes in an asset and therefore trading some of the potential return for less risk. This led to the commercial agreements that we see today. These agreements can vary in many ways and there is no one standard agreement that is used throughout the industry.

Portfolio Theory and Baseball?

“Moneyball” is a recent Hollywood movie starring Brad Pitt that, surprisingly, has nothing to do with drug trafficking, or gambling. Indeed, the theme is one that would be unlikely to attract much attention if it were applied to anything other than baseball. So how would baseball’s story compare with that of the oil and gas (O&G) industry?

Scottish independence and North Sea Oil

The Financial Times writes today that talk of Scottish independence raises questions on how the oil revenues would be divided between England and Scotland. I believe that the matter would in truth be quite straight-forward.

Regime Change in Libya

Colonel Gadhafi’s regime in Libya has finally toppled but oil production is at a small fraction of pre-revolution levels. Prior to the war the country produced 1.6 million barrels per day and it now stands at around 0.6 million barrels. The oil infrastructure is damaged and wells that have been shut-in can be hard to restart due to wellbore damage.

How to implement Portfolio Optimisation effectively in your business

Effective portfolio management requires a comprehensive understanding of the tradeoffs between different portfolio choices.

The economic impact of becoming a net gas exporter for Canada/North America.

The global economy is moving toward a gas-powered economy. This is being driven by several reasons:

Building development plans for major UK shale gas extraction

Several weeks ago, Cuadrilla announced a shale gas find in the UK. They have estimated that there could be as much as 200TCF gas in place.

The Valuation of Swing Contracts by Least-Squares Monte Carlo Simulation

Natural gas and electricity are commonly traded through swing contracts that enable the buyer to exploit changes in market price or market demand by varying the quantity they receive from the producer (seller).

Shale gas in continental Europe: a myth or a reality?

Shale gas revolution Although the first commercial shale wells were drilled in the early nineteenth century, shale gas production did not gain momentum till the recent development of technologies such as horizontal drilling and hydraulic fracturing.

Palantir Presents: Portfolio Optimisation

It was a full house at the Palantir Solutions London seminar on 20th September.

Impact of Unconventional Resources on Business Planning

With the current focus on unconventional or “marginally economic” resources, companies must invest in performance monitoring systems to ensure that they deliver on their promises to shareholders, employees and partners.

The Looming Problem for the UK North Sea

A large number of oil rigs, pipes and wells will need to be decommissioned over the next few years. The scale of it means the industry will have to increase its capacity to handle it and the cost is huge.

Challenges and predictions for Decision Analysis in the E&P industry

Decision making is at the very core of every business. Much of the effort of geoscientists, petroleum engineers and economist is dedicated to enhance the quality of investment decisions

What does the future of US Natural Gas hold?

Palantir is finding that companies are valuing their shale gas opportunities deterministically; this means that their valuation models are not considering the broader range of uncertainty and risk involved in shale gas developments

Discretisation, accuracy and Swansons’ rule

One could question whether even Howard Raiffa fully grasped the potential of the stick-man-like figures he drew on his black-board. These drawings Howard made in the late 1960’s are now known as decision trees and these simple figures changed global corporate decision making for ever.

A roaring success at the Annual Calgary Stampede

On Friday 8th July Palantir Solutions hosted an event at the Annual Calgary Stampede.

It seems that “Reserves are like Fish”

The Director General of the Cambodian National Oil Company recently presented his opinion that contingent resources are like fish using some rather creative analogies.

Is the UK Government's "Ring Fence Expenditure Supplement" a first response to bad policy?

The "Ring Fence Expenditure Supplement" seems to be the first response to the ill considered implementation of a bad policy.