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This chapter describes the use of a reserves estimate to prepare an economic evaluation and perhaps then place a value on the reserves. This chapter often refers to a document titled Perspectives on the Fair Market Value of Oil and Gas Interests published by the Society of Petroleum Evaluation Engineers (SPEE) in the spring of 2002. In this chapter, that document is referred to as the SPEE FMV document. To value reserves, the nature of the ownership must be considered. Reserves ownership is usually derived from contractual agreements that specify the obligations of the parties to those agreements for the payment of costs and the sharing of revenues. These agreements often include specific commitment obligations such as the drilling of wells. A common arrangement for such contracts is the oil and gas lease. Another common contractual structure is the production-sharing arrangement. Appendix A, which describes common types of oil and gas property interests, is from the SPEE FMV ...
The co-owners of the Terra Nova project offshore Newfoundland have reached an agreement in principle to restructure the project ownership and provide short-term funding toward continuing the development of the Asset Life Extension Project, with the intent to move to a sanction decision in the fall. A subset of owners will increase their ownership of the project for consideration payable from the other owners. Full details of the ownership swap were not disclosed, however, as a result, operator Suncor's ownership will increase to 48% from around 38%. The agreement is subject to finalized terms and approval from all parties, including board of director approval where appropriate, and is contingent upon the previously disclosed royalty and financial support from the Government of Newfoundland and Labrador. "Over the past year, Suncor has worked diligently with all stakeholders to determine a path forward for Terra Nova," said Mark Little, Suncor president and chief executive officer.
Following my theme for the year on Risk and Reward, let's think about how disruptive technologies alter the risk/reward balance. The term "disruptive technology" is usually attributed to the Harvard Business School professor Clayton Christensen in his bestselling 1997 book, The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail. Christensen defined disruptive technology as a new emerging technology that unexpectedly displaces an established one. Disruptive technologies are usually still unrefined, have performance problems, are not widely known, and may not have a proven practical or commercial application. Disruptive technologies can significantly alter the course of our lifestyles, work, businesses, and even the global economy.
For the oil and gas industry, the last decade (2003 to 2013) has been one of "resilience, extraordinary innovation, and, despite setbacks, significant gains in safety and environmental conformance," according to Paal Kibsbaard, chief executive officer of Schlumberger, in his report "A Decade of Upstream Technology Innovation" included in the World Petroleum Council's 80th Anniversary Edition report (2013). The industry remains strong, after sustaining humanity's supply of oil and gas and thereby meeting more than half the global energy needs throughout the decade. In the June 2010 issue of the Journal of Petroleum Technology, Behrooz Fattahi, 2010 SPE president, said the industry has been focusing on the concept of sustainability or its components "for a long time, but under different descriptive terms--optimizing production, maximizing reserves, reducing cost, cutting waste, increasing efficiency, optimizing processes, minimizing footprint, maximizing safety, reducing environmental impact, and increasing corporate social responsibility." Sensitivity to all these factors is required when looking back on the industry's last 10 years and looking ahead to the next 10 years. The oil and gas industry has always been a risky business for many reasons--from geophysics to geopolitics.
While NASA is working aggressively to meet its near-term goal of landing the first woman and next man on the Moon by 2024, its Artemis program also is focused on taking steps that will establish a safe and sustainable lunar exploration architecture. NASA is taking a critical step forward by releasing a solicitation for commercial companies to provide proposals for the collection of space resources. To meet NASA's requirements, a company will collect a small amount of Moon "dirt" or rocks from any location on the lunar surface, provide imagery to NASA of the collection and the collected material, along with data that identifies the collection location, and conduct an "in-place" transfer of ownership of the lunar regolith or rocks to NASA. After ownership transfer, the collected material becomes the sole property of NASA. NASA's goal is that the retrieval and transfer of ownership will be completed before 2024.
When Diamond Offshore Drilling announced that it will be equipping its offshore drilling rigs with blockchain, the calls started coming. "I was shocked by the response on the first 4 days," said Harris Reynolds, manager for research and development for Diamond Offshore. The reaction exceeded anything he had seen in more than 3 decades of product development. The level of interest was surprising in an industry where customers are normally wary of new things until totally proven. Blockchain for drilling is an industry-first based on technology from outside the oil and gas industry that has never been field-tested, and will be valuable only if it disrupts how things are done.
One of the keys to growing a safety culture is to build levels of employee engagement. The reason for that is that the more engaged front-line employees are, the more ownership they assume for their work domain. And the more ownership they assume, the more they begin to lead safety as "owners" instead of following safety as "employees." One of the key drivers for building employee engagement is to provide your employees with opportunities for development and growth. Just to clarify, I'm not talking here about the normal human-resources-driven learning path that takes a Level-I operator to a Level-II operator.
Offshore decommissioning costs are projected to fall significantly in the UK North Sea as the sector matures, according to Oil and Gas UK. In its Decommissioning Insight 2018, the trade association forecast that £15.3 billion ($19.3 billion) will be spent on decommissioning in the UK Continental Shelf (UKCS) by 2027, a 20% drop from last year's projection. Decommissioning only comprises 8% of the overall Capex in the UKCS, and the association said that new developments will continue to outweigh decommissioning significantly in the coming years as existing infrastructure helps drive further recovery. The reduction in expected decommissioning Capex is due in part by action taken by industry, the UK government, and regulatory agencies to make the UKCS more attractive for investors in support of the Maximizing Economic Recovery (MER) initiative launched 2 years ago by the UK Oil and Gas Authority. These efforts have drawn a new wave of companies to the basin, acquiring later-life assets and revitalizing them through new investment.
An internal study by an oilfield services company showed that 51% of injuries involved personnel with one year of seniority or less. New employee safety training was identified as an area of opportunity to improve safety performance. This paper describes a new learning methodology applied by the company to modernize and increase the effectiveness of new personnel safety training.
Taking into consideration that new personnel may already have some safety-related knowledge and skills is key to transferring the ownership of their learning to the individual, and by extension ownership of their own safety. The first stage is to extract the participant's current knowledge and then teach the required theory using bite-size chunks of content via videos and infographics. This is an adaptation of a flipped classroom concept, which allows the majority of training time to be used in the application of theory to problem-solving and case studies relevant to the workplace.
Using a blend of innovative learner-centered educational methodologies, this new employee training package encourages self-reflection, promotes collaboration and reinforces critical thinking skills. New technologies were utilized to support some of the key training modules. The paper describes how immersion in virtual reality hazard identification experiences including a rig, a workshop and a coil pad helps develop essential workplace situational awareness skills. The training content that used to include 586 slides, now has 69 slides, 17 microlearning videos, 10 infographics, 20 scenario case studies and 50 interactive activities. The paper describes how the spaced learning methodology has been integrated into the 3-day course to drive knowledge into the long-term memory of participants.
This inventive learner-centered approach empowers new personnel to take ownership of their safety performance by equipping them with a clear understanding of the control measures and mindset required to conduct their work activities safely. Using the spaced learning principles and innovative HSE communications tools driven by line management enables new personnel to continue their learning journey beyond the classroom.
This is one in a series of papers in the technical session, "Floating Memories – Look Back to Leap Forward." The paper focuses on the evolution of ownership and the financing model for upstream and midstream infrastructure in deepwater. It provides an historical perspective on the value chain, starting in the 1990s when offshore oil companies owned and operated entire infrastructures. As industry matured, pipeline companies and service providers began taking ownership positions in partnerships with the operators. Most recently, private equity has stepped up to invest in infrastructure, using creative financing models now in play.