«Problems of economics and management of oil and gas complex»

Approaches to modeling decisions on the decommissioning of oil and gas fields on the shelf abroad

UDC: 622.276.04
DOI: 10.33285/1999-6942-2022-8(212)-65-70

Authors:

¹ National University of Oil and Gas "Gubkin University", Moscow, Russia

Keywords: model of a discounted monetary flow, development expenditures, operational expenditures, expenditures on wells decommissioning, companies income tax with limitations, additional duty, investment allowances

Annotation:

One of the important economic issues of fields’ operation completion is to determine the impact of available financial instruments on decisions to decommission oil fields. Additional costs with the purpose of financial support of abandonment works can lead to distortions when making decisions at the latest stages of fields’ operational life. If the revenues received by companies are not enough to cover operating costs and financial support, subsoil users (licensees) will prefer to stop production and start decommissioning of wells. To simulate the deterministic impact of different funding regimes and decommissioning dates, several UK offshore oil fields are assessed and the impact of instruments such as letters of credit and trust funds on the end date is shown.

Bibliography:

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