
	Trending ▼ ICSE CBSE 10th ISC CBSE 12th CTET GATE UGC NET Vestibulares ResFinder

2003 Course Petroleum Economics

7 pages, 32 questions, 0 questions with responses, 0 total responses,

	pune_eng	+Fave Message
	Profile Timeline Uploads Q & A

Home > pune_eng >

Instantly get Model Answers to questions on this ResPaper. Try now!
NEW ResPaper Exclusive!

Formatting page ...

Total No. of Questions : 8] P1444 [Total No. of Pages : 7 [3764]-381 B.E. (Petroleum Engineering) PETROLEUM ECONOMICS (2003 Course) Time : 3 Hours] [Max. Marks : 100 Instructions to the candidates: 1) 2) 3) 4) Solve any two questions each for Section I and Section II. Answers to the questions of both the sections should be written in separate answer books. Use graph paper and semi log paper wherever necessary. Assume suitable data, if necessary. SECTION - I Q1) a) Following are the details of oil production from a well. Plot the information on suitable graph and extrapolate time required to decline to economic limit of 20 BOPD. Month Bbl/month Month Bbl/month Month Bbl/month 1 5400 16 1790 31 1030 2 5000 17 1700 32 1000 3 4800 18 1620 33 980 4 4100 19 1550 34 960 5 3900 20 1500 35 940 6 3600 21 1410 36 910 7 3300 22 1370 37 900 8 3100 23 1300 38 890 9 2900 24 1280 39 870 10 2650 25 1230 40 850 11 2400 26 1200 41 840 12 2350 27 1160 42 815 13 2160 28 1120 43 800 14 2050 29 1100 44 790 15 1910 30 1060 45 780 Assuming recovered reserves are 21% of OOIP, calculate OOIP. How much is still producible taking into consideration economic limit. [15] P.T.O. b) Explain Exponential Decline and Hyperbolic Decline models with suitable diagrams. [10] OR Q2) a) Figure given below shows that the well has produced at a constant rate of 200 BOPD for 4 years. The production then declined exponentially over the next 16 years to an economic limit of 5 BOPD. The company demands a minimum ROR of 10% and oil from this field is $ 3.15/bbl net after local taxes, royalty and operating expenses. Calculate a composite NPV of a barrel of oil using annual compounding. [15] b) Explain with the help of hypothetical cash flow diagram, various concepts used in the mathematical methods of profitability evaluation. [10] Q3) a) Following is the cash flow generated over the tenure of a project against an initial investment of $ 4,50,000. Year Cash flow generated 1 2,50,000 2 1,50,000 3 1,20,000 4 80,000 5 50,000 6 20,000 Calculate NPV @ 10% and also DCFROR using graph and show calculations. [10] b) Write notes on any three of the following : i) Incremental Investment Analysis. ii) Investment Yardsticks. iii) Sensitivity Analysis. iv) Reserves auditing. v) Oil price elasticity. OR [3764]-381 2 [15] Q4) a) Project under consideration requires an investment of $ 1,20,000, which will result in the cash flow generation for next five years as $ 40,000, $ 50,000, $ 30,000, $ 30,000 and $ 20,000 respectively. Calculate the NPV at 10% and also calculate the DCFROR for the project. [10] b) Prepare a forecast of future oil prices using following equation for the next five years with the first year price determined on the basis of the market price of designated marker crude and escalated at the rate of 2% per year. [10] Oil Price = (marker crude oil price @ 0 API) + 0.19( API) - 0.77(% sulphur) Given, i) Current Market Price of Marker Crude (40 API) = $ 64.00 ii) Current Market Price of Marker Crude (0 API) = $ 28.00 iii) Quality of oil to be produced: Gravity = 34 API, Sulphur = 1.0% c) Write a note on Production and Demand of hydrocarbons in India. [5] SECTION - II Q5) a) Following is the database available from major regions of the world on the proven reserves in billion barrels (R, column 2), production in million barrels per day (P, columns 3, 4, 5, and 6) and consumption in million barrels per day (D, columns 7, 8, 9, and 10). [15] Region R P P P P D D D D 2006 2007 2008 2009 2006 2007 2008 2009 N. America S&C America 102.2 6.9 Europe Eurasia 105.9 14.9 15.4 16.2 16.9 19.4 19.6 19.5 19.2 Middle East 726.6 23.2 22.5 20.9 22.6 4.3 4.3 4.4 4.5 Africa 101.8 7.8 7.8 7.9 8.4 2.5 2.4 2.5 2.5 Asia Pacific [3764]-381 63.8 13.9 13.9 14.1 14.3 23.6 23.7 23.7 24.1 47.7 7.9 7.9 7.8 21.1 21.1 21.7 22.6 7.9 6.8 3 6.9 6.7 4.7 4.8 4.6 4.6 Analyze the data and give your comments on following points i) Plot the information on production and demand to infer future trends for the same. What may be the production and demand forecast for the year 2012? ii) What are the existing reserves to production ratio? Write R/P ratio in descending order. iii) Compare the production and demand to ascertain the likely areas of greater demand. iv) Identify the factors affecting future production and demand. b) Consider the following investment opportunities that might be available to a company with a current priority in minimum risk involved . Asset Opportunity Total Investment (M = 106 $) A Drilling exploration wells in an area with $ 20 M no history of occurrence of hydrocarbons B Exploration project adjacent to producing field $ 10 M C Redevelopment in producing field $ 15 M If a budget of $ 20 M is available for allocation of projects for next year, which is the best way to spend money acknowledging the factors of uncertainty and risk? i) 100% allocation in asset C and 50% allocation in asset B. ii) 100% allocation in asset C, 25% in asset B and 12.5% in asset A. iii) 80% allocation in asset C, 40% in asset B and 20% in asset A. Justify your decision with suitable arguments for each alternative. [10] OR [18] Q6) a) Write notes on any three of the following : i) Oil and gas accounting system. ii) Risk analysis applied to Petroleum field development. iii) Meaning and interpretation of EMV. iv) Variation in technical costs of exploration and production of oil and gas as a function of water depth and geographic location. v) Production sharing contract. [3764]-381 4 b) Company A owns complete Working Interest (W.I.) for a petroliferous basin. For some reason A leases its land for oil and gas development to D, retaining its 1/8 royalty interest. In order to hedge against nonproductive development A sells 1/4th of its royalty to B and 1/8th of its royalty to C. D, the original lessee, then conveys the lease to E, retaining 1/6th of 7/8 Overriding Royalty Interest (ORI). To support D with its development and operating cost, E now sells one-fourth of its interest in the lease to F. A, B, C, D, E and F, thus, become the royalty owners for the hydrocarbon development project. Calculate the Overriding Royalty Interest (ORI) and Working Interest (W.I.) for each of them. [7] Q7) a) The management of an oil and gas company is analyzing a drilling prospect from a known hydrocarbon area. However, the most important aspect in the discussion is finding of hydrocarbon reserves. The field has a history of occurrence of reserves of gas of 2 BCF in 35% wells, 3 BCF in 35% wells, 4 BCF in 20% and 5 BCF in 10% wells. The probability of finding of gas is 0.25 and if gas is encountered then probability of finding of reserves of 2 BCF, 3 BCF, 4 BCF and 5 BCF is identical to that of success ratio encountered in the field. Monetary profits for each level of reserves if encountered, are given for two available alternatives, drilling or farm out. Dry hole cost is $ 70,000 Reserves NPV, if drilled NPV profit, if farmed out 2 BCF + 40,000 $ + 9,000 $ 3 BCF + 90,000 $ + 12,500 $ 4 BCF + 1,30,000 $ + 15,000 $ 5 BCF + 2,00,000 $ + 18,000 $ What is the best choice in this prospect based on maximizing EMV? What is the minimum probability of finding gas required to justify even the risk of drilling? Draw a graph of EMV and probability of finding gas and show the intersecting point where the decision is reversed. Show all calculations. Construct decision tree at a suitable step, show all calculations and take decisions with proper justification. [15] [3764]-381 5 b) Construct a critical path study to develop a medium size field for which details are given below : [10] i) Sixty development wells ($ 1.5 MM each) - One third will be injectors. ii) Three platforms - two for wells, the other for production/injection equipment and pipeline terminus. ($ 310 MM each). iii) Wells take about one month to drill. Upto two rigs/platform. iv) Platforms manufactured in one and a half years - two out time one month during weather window in Summer. (Two out costs $ 10 MM). Setup time is three months for drilling/well platform, five months for production platform. v) Pipeline lay time is about 14 months. (Cost $ 180 MM). vi) Production commissioning and final permit take two months ($ 5 MM). vii) Overhead and other ongoing costs = $ 1 MM/month. The main idea of this exercise is to avoid waste of time, labor and material. 1) Draw a critical path diagram for this project. Assume a starting date of July, 1, 2010. 2) Determine the time length of the critical path. 3) Plot cumulative costs as a function of time. OR Q8) a) Following are the details of production of oil from a small field. Year 1 2 3 4 5 6 7 8 9 10 11 12 [3764]-381 Annual Production (bbl) 108000 108000 108000 108000 87000 69000 51000 34500 17250 8625 6 CAPEX, IN $ MM 8.6 8.6 [20] Prepare a spreadsheet based on assumptions given below and calculate NPV @ 10%. Oil price is $ 50/bbl and is constant throughout the tenure. OPEX is $ 3/bbl for service life. Royalty is 10% on gross revenue. Cost recovery is 70% of net revenue since beginning of commercial production. Profit petroleum is to be shared between government and operator on 60 : 40 proportion. Tax holiday is for first 3 years from beginning of commercial production, after that tax is 25%. b) An oil company have mapped a prospect and concluded that the resources may be as high as 50 million barrels and the probability of success is estimated to 10%. The data acquired, the interpretations and the cost of the exploration well will amount to 20 million USD. If a discovery is made, the NPV will be 90 million USD. [5] Calculate the expected monetary value. Find the break even POS. [3764]-381 7

Formatting page ...

Tags : Pune, Engineering, University of Pune, Engineering question papers, Pune University, previous year question papers, question papers, india, model question paper, pune university paper pattern, pune university syllabus, old question papers

pune_eng chat

Horizontal lines at:
Guest Horizontal lines at:
AutoRM Data:
Box geometries: