| Abstract: | This paper outlines a new method for summarizing the exploratory and production potential of an aggregated geographical region in terms of the past history of exploration and production at the field level. The analytical framework is divided into two stages. First, the discovery analysis describes the physical returns to exploratory drilling (marginal expected field size), which provide additions to the potential reserve base. Subsequently, the production analysis specifies the economic costs of bringing new fields on stream, and also describes the likely production rate from fields of distinct physical characteristics. In both the exploratory stage and the production stage, the negative influence of resource depletion is modelled explicitly. The expected size of successive field discoveries is subject to exponential decay at a rate determined by analysis of past discovery history. In the production stage, production flow declines exponentially from the peak rate as the field is exhausted, Finally, the paper contains new estimates of development cost functions that are sensitive to both economic parameters and the physical characteristics of fields. The cost functions relate total investment expenditure to the size of fields, the rate of extraction, and the productivity of individual wells. The analytical framework is illustrated by application to 37 individual regions around the world. |
