This paper was prepared for the SPE-European Spring Meeting 1974 of the Society of Petroleum Engineers of AIME, held in Amsterdam, the Netherlands, May 29–30, 1974. Permission to copy is restricted to an abstract of not more than 300 words. Illustrations may not be copied. The abstract should contain conspicuous acknowledgment of where and by whom the paper is presented. Publication elsewhere after publication in the JOURNAL OF PETROLEUM TECHNOLOGY or the SOCIETY OF publication in the JOURNAL OF PETROLEUM TECHNOLOGY or the SOCIETY OF PETROLEUM ENGINEERS JOURNAL is usually granted upon request to the Editor PETROLEUM ENGINEERS JOURNAL is usually granted upon request to the Editor of the appropriate journal provided agreement to give proper credit is made.
Discussion of this paper is invited. Three copies of any discussion should be sent to the Netherland Section of the Society of Petroleum Engineers, P. O. Box 228, The Hague, the Netherlands. Such discussion may be presented at the above meeting and, with the paper, may be considered for publication in one of the two SPE magazines.
Abstract
The paper relates the financial performance requirements of offshore oil and gas performance requirements of offshore oil and gas development projects to the technical risks associated with such programs and the financial circumstances of the participating group. The minimum negative cash participating group. The minimum negative cash flow approach, with higher levels of operating costs, is compared to the high capital investment exposure approach, with corresponding lower operating costs, in terms of an example situation.
The writers then go on to broadly review the more recent development proposals for North Sea applications and proposals for North Sea applications and outline where the degree of flexibility for each plan generally places it in the context of risk capital exposure.
Introduction
Not too many years ago it would have been almost unthinkable for an operator to take the decision to initiate a full scale major oilfield development scheme on as little evidence as may be available from the discovery well; as few as two confirming appraisal wells plus the detailed seismic survey results. Yet due to the substantial emergence of offshore oil and gas development projects in increasingly arduous circumstances, the trend toward the necessity for far more expensive decisions based on less and less confirming technical data, is fast becoming an accepted fact of life.
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