The transition to clean and low-carbon energy is an irresistible trend globally that drives the scale of trade in the global LNG market to grow continuously. The paper reviews the global LNG trade in 2020 and forecasts the future LNG supply and demand. On this basis, the costs in segments of a LNG project are analysed from the perspective of the LNG industry chain. The feasibility of export from LNG projects and the preferred target markets are determined by calculating the economic index of projects. It is concluded that the possibility of future rebound in oil prices and the demand growth in the incremental market in emerging Asian countries are most likely to determine the capacity scales of new LNG projects around the world and contribute to a dynamic balance in the LNG market in the medium- and longterm. The costs in different segments of the LNG industry chain vary greatly with the availability of resources and markets. The economics of LNG export depend on the demand for LNG imports in end markets, the cost plus in different segments of the industrial chain, and the affordability of end consumers. Through the cost and economic analysis on typical LNG Projects, Qatar is found still the most economical and highly profitable country in the global LNG export market nowadays. Unsatisfactory economic performance is a common reason for delayed investments in many large LNG projects in Australia and other countries.
This article analyzes reform and amendment of petroleum tax policy in Russia to investigate instability of tax regime which is one of the main concerns for decision making in asset acquisition. Historical and recent amendments of upstream fiscal terms in Russia are reviewed and studied in an attempt to understand the trends of reform. Tax burden of four different cases is modeled with the change of tax policy to analyze the effect of tax incentives. The recent “tax maneuver” of transferring export duty to Mineral Extraction Tax (MET) is studied in detail to analyze effects to upstream, refinery, and customers. Net present values of three field cases under previous tax regime and new Added Income Tax (AIT) regime are comparatively studied with cashflow modeling. The article concludes that recent “tax maneuver” has indirect influence on upstream sector but may lead to upward pressure on retail. New AIT regime introduces a universal taxation system and requires less government intervention, which may reduce aboveground risk of unstable fiscal regime and boost international investment in Russia. Also, key suggestions are summarized for international investors who are interested in oil and gas asset in Russia.
With the sustained decline and slow recovery of international oil prices, the global upstream oil & gas deal market has witnessed significant changes since 2014. Generally, five characteristics were present: (1) shrinking deal count, (2) dominance in North America tight oil, (3) matching deals and asset optimization strategy for oil giants, (4) sluggish deals of national oil companies, and (5) active deals of small oil companies and other investors. From the regional perspective, in North America, the deals in the Permian Basin remain active; in Latin America, the deals are dominated by asset disposal and deepwater tender; in Asia-Pacific, gas-related deal count rebounded after bottoming out; in Russia-Central Asia, asset sale is subject to the domestic financial situation; in Africa, the deal count hovers at a low level; in the Middle East, the market will be open. In 2019, as the oil price rises from a stable level, the deal upsurge will unfold again, and the unconventional oil & gas industry in the United States will be continuously integrated. Then, diversified players and extensive transaction opportunities can be expected on the oil & gas market.
Africa is a key area for overseas oil and gas investment cooperation due to the low degree of oil and gas exploration and great resource potential. All oil and gas resource countries have certain common characteristics in contract modes, fiscal and tax terms, economic conditions, infrastructure and bidding methods. A theoretical system of rapid economic evaluation technology suitable for the characteristics of Africa can be established to provide the methods and basis for investment decisions of oil and gas development projects in Africa. In this paper, on the basis of a systematic study on oil contract modes in Africa and the legal terms, sales market, actual operations and evaluation and prediction parameters to be focused on, an economic evaluation index system has been established, including analysis framework establishment, financial benefit analysis and uncertainty analysis; finally, an oil and gas development project in Africa is taken as an example to verify the above-mentioned rapid economic evaluation technology. This technology system is applicable to economic evaluation of most oil and gas development projects in Africa, covering the possible factors, scenarios and problems in the process of project evaluation, facilitating the realization of a rapid and effective economic evaluation process and the achievement of scientific and reasonable results.
The development of unconventional natural gas in China is facing three new situations: market-oriented pricing reform, intensified competition in state subsidies, and reduced production capacity growth, which may cause the development of unconventional natural gas to be on the edge of economic feasibility. Therefore, the definition of economic limit is even more important. In this paper, through analysis on the historical prices, outputs, and subsidy policies of three unconventional natural gases, methods to estimate future prices, subsidies, and outputs of unconventional natural gas are designed in this paper based on the mean reversion model and the generalized Weng model, respectively; fuzzy data are processed by using probability density function combined with a discounted cashflow method to improve the utilization of original data; the economic limit model for well depth, well spacing, and gas recovery rate is designed through break-even analysis with the subsection function of drilling cost to well depth, the modified Cher Card Geoff empirical formula of recovery ratio to well spacing, as well as the fitting formula of gas recovery rate and stable production time. This model is applied in the case of Deep CBM Block Ji 4&10. According to the estimation and case calculation, in future China, the subsidies for unconventional natural gas will gradually decrease and the gas output will significantly increase, with shale gas taking the leading position and CBM gradually declining; the economic limits of well depth, well spacing, and gas recovery rate of Ji 4&10 are 2,203.2 m, 300 m × 300 m and 469 m × 469 m, and 2.1% and 4.3%, respectively, under the economic infeasibility probability of 90%, and the overall economic infeasibility probability is 58%, indicating that the development of this block is subject to great risks and careful consideration needs to be given.
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