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Figure 17-4 shows first the life cycle of the asset under present technology, as indicated by the curve F 1. With present technology, the exploration phase covers 10 years (with negative cash flows), while the development and production period lasts for about 15 years, up to exhaustion at about year 27.

Prospects for these offshore deposits would be greatly improved by advances in drilling technology under the difficult conditions found in very deep water.

An advance in this technology, portrayed as curve F 2 , would extend the life cycle of the asset and vastly enhance financial returns: the exploration phase would be shorter, the development and production phases would be longer, and exhaustion of the deposit could be pushed out 5 years or more.

Of course, offshore drilling involved environmental risks that may cause host countries and foreign oil firms to have some second thoughts about undertaking very expensive and difficult-to-manage deepwater deposits. These risks become much in evidence after the May 2010 oil spill in waters off the Gulf of Mexico, involving British petroleum and several other firms.

Capturing benefits from energy endowments for emerging nations

As earlier noted no emerging nation, even those with large NOCs such as China’s CNooc or Brazil’s Petrobras has the technology to tap all available hydrocarbon sources, especially the relatively inaccessible and expensive newly diverse shale and pre-sal deposits and deposits lying under 10,000 feet of salt water.

For both types of deposits, there will be for some time need for foreign technology and capital to get hydrocarbons out of the shale, or out of deepwater deposits. That being the case, how can emerging nations best protect their interests in dealing with foreign firms such as Exxon, Chevron, Statoil, and Total.

One option would be to merely hire the firms to bring their exploration and drilling technology to the table and pay just for the technology? Ecuador attempted to do this in 1981. The State Oil Co. asked the author to advise them on whether or not they could just pay the foreign oil companies just to bring their technology capital, but with no share of any oil produced. It was clear that this would not work, for at least two reasons:

  1. Large oil companies are organized to be big oil companies. They do not see themselves of simply sellers of technology or suppliers of the billions of dollars of capital required for oil exploration and development. They seek a share of oil or gas produced. They are, after all, oil companies.
  2. For many emerging nations, such as Ecuador, Thailand, Colombia, the revenues of the oil companies are as big or usually even bigger than your EDP. That meant they are better able, or at least as able, to shoulder the major risks in all oil business:
    1. Market risk (what will be the price of oil internationally 2-5 years down the road, given volatile energy markets such as the world has experienced for decades).
    2. Technological risk – typical oil and gas projects today run into several billions of dollars. But there is no guarantee that commercial reserves will be found when this money is spent.

Questions & Answers

what is variations in raman spectra for nanomaterials
Jyoti Reply
I only see partial conversation and what's the question here!
Crow Reply
what about nanotechnology for water purification
RAW Reply
please someone correct me if I'm wrong but I think one can use nanoparticles, specially silver nanoparticles for water treatment.
yes that's correct
I think
what is the stm
Brian Reply
is there industrial application of fullrenes. What is the method to prepare fullrene on large scale.?
industrial application...? mmm I think on the medical side as drug carrier, but you should go deeper on your research, I may be wrong
How we are making nano material?
what is a peer
What is meant by 'nano scale'?
What is STMs full form?
scanning tunneling microscope
how nano science is used for hydrophobicity
Do u think that Graphene and Fullrene fiber can be used to make Air Plane body structure the lightest and strongest. Rafiq
what is differents between GO and RGO?
what is simplest way to understand the applications of nano robots used to detect the cancer affected cell of human body.? How this robot is carried to required site of body cell.? what will be the carrier material and how can be detected that correct delivery of drug is done Rafiq
what is Nano technology ?
Bob Reply
write examples of Nano molecule?
The nanotechnology is as new science, to scale nanometric
nanotechnology is the study, desing, synthesis, manipulation and application of materials and functional systems through control of matter at nanoscale
Is there any normative that regulates the use of silver nanoparticles?
Damian Reply
what king of growth are you checking .?
What fields keep nano created devices from performing or assimulating ? Magnetic fields ? Are do they assimilate ?
Stoney Reply
why we need to study biomolecules, molecular biology in nanotechnology?
Adin Reply
yes I'm doing my masters in nanotechnology, we are being studying all these domains as well..
what school?
biomolecules are e building blocks of every organics and inorganic materials.
anyone know any internet site where one can find nanotechnology papers?
Damian Reply
sciencedirect big data base
Introduction about quantum dots in nanotechnology
Praveena Reply
what does nano mean?
Anassong Reply
nano basically means 10^(-9). nanometer is a unit to measure length.
do you think it's worthwhile in the long term to study the effects and possibilities of nanotechnology on viral treatment?
Damian Reply
absolutely yes
how did you get the value of 2000N.What calculations are needed to arrive at it
Smarajit Reply
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Source:  OpenStax, Economic development for the 21st century. OpenStax CNX. Jun 05, 2015 Download for free at http://legacy.cnx.org/content/col11747/1.12
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