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An Econometric Analysis and Economic Modeling of Frontier Hydrocarbon E & P Business - A Paradigm Shift to Redefine Sustainable Petroleum Economics

Jagdish P. Giri
Chemistry, Oil and Natural Gas Corporation Limited, India, Chennai - 600085, India

The paper emphatically explores Economic Dimensions of Sustainable Hydrocarbon Business Model in terms of variables governing Heterogeneous Hydrocarbon Reserves, Environmental and Geo-political Constraints, Consumption, Supply, Demand, Availability, Production, Infra-Structure and Technologies, in an Integrated Long-Term Energy Policy. The unifying theme of building Economic Model of Optimal Oil and Gas Production in sustainable E&P Cycle is to elaborate frequently observed exponential rise and fall of rate at which oil or gas is produced over a variable price index to predict a future sustainable petroleum production peak in framework of economic, social and environmental issues. Exploitation of Coal bedded Methane and Frontier Petroleum Deepwater Provinces with huge accumulation of Gas Hydrates & Natural Gas releasing Methane to atmosphere is also incorporated in this modeling to take into account of Environmental Modeling Aspects of Gas Hydrates & Natural Gas in context of climate change. Interesting predictions of derived model establish consistency with exponential increase in exploration cost resulting in marginal increase in production cost justifying more expensive E & P technologies. Extraction based technological change leads to an increase in rate that shadow price escalation contributing hydrocarbon energy economically more scarer. In contrast depletion based technological change reduces the rate of increase in resource scarcity and thus reduces hydrocarbon scarcity.

Derived economic model concludes future sustainable growth & peak oil & gas production when economy on social and environmental adaptability alone will determine it ultimately rather than resource availability. Long term integrated energy policy on sustainable economic development is urgently required to incorporate mix of energy portfolios in economic model of Hydrocarbon E & P Business.

Presentation GEO India Expo XXI, Noida, New Delhi, India 2008©AAPG Search and Discovery