COST EFFICIENCY IN OIL AND GAS EXPLORATION

Understanding Exploration Drilling Cost Projections Success through Project success Indicators (Research Proposal)

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Table of Contents

CHAPTER 1: INTRODUCTION3

Background3

Statement of the Problem3

Aim and Objectives4

Research Questions5

CHAPTER 2: LITERATURE REVIEW6

CHAPTER 3: METHODOLOGY8

Data Collection Method8

Using Primary and Secondary Data for Research8

Assumptions of Quantitative Research9

Ethical Consideration9

References10

CHAPTER 1: INTRODUCTION

Background

Over the period of time, the value and benefits of oil and gas have surpassed the value of gold and silver. This is one of the main reasons why nations and countries have started to shift the base value of their currencies from gold and silver to oil and gas. With the increase in global demand for gas and oil, companies have evolved with the sole purpose of exploring territories in the effort to discover oil and gas reservoirs. These companies thrive on speculation and the suspected probability of the existence of gas or oil in a certain location (Vitalone, 2009).

Statement of the Problem

Since the cost of implementing a drilling project is considerably high, companies mostly combine their resources and conduct a project unanimously. However, this is also considered one of the main reasons why cost efficiency is not achieved in such projects. There are several partners in a project and additionally, the government also keeps a minimum of 20% as their share of the project's revenue (EIA, 2012). When such a project requires more funding half way through, it shocks stake holders. Hence, the need has been identified to implement better cost structures to such projects. Cost efficiency and reliability are the two main characteristics that such projects need. Additionally, it is important to identify different costing models that could be used to improve the efficiency of such projects and improve the overall costing of drilling projects (Petroleum Online, 2012).

Aim and Objectives

The main aim of this research is to identify better costing methods for oil and gas drilling projects. Additionally, this research shall try to identify means by which the performance of drilling projects can be improved. The research shall adopt different forms of risk analysis and forecasting to identify which would be the most feasible to a drilling project and shall also utilize mathematical modeling (such as triangulation) to further identify effective means of oil and gas exploration with reduced costs (EIA, 2012). In this research, the researcher shall construct a mathematical model to predict cost over-runs for such drilling projects.

Another aim of this research is to identify means by which oil and gas drilling project performance can be assessed at any given stage of a projects life (Wolfe, 2010). Continuous assessment is an importance aspect of such projects and reflects the true gap between the projected and the actual development of a project at any given stage.

Finally, the research shall focus on building measures of performance assessment and forecasting that are of relevance to the drilling exploration industry.

The objectives of the research are:

To review existing literature on project performance problems and the existing performance measurement frameworks being used to address them

To identify oil company's and stakeholders criteria for ...