8/16/2019 The Decision to Explore for Petroleum Resources

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8/16/2019 The Decision to Explore for Petroleum Resources

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=nce? the? production? Aand? transportation)? capacit@? is? installed"? oil? and? gas? are? produced?over?a?number?o?@earsFusuall@?at?declining?rates?as?resources?are?depleted.?  $he?level?and?length?o?production?depend?on?a?host?o?actors"?both?technical?Asuch?as? siBe"? reservoir? characteristics"? characteristics? o? crude? oil? andor? gas"? and? geograph@)? and?economic?Aoil? and? gas? prices"? pro!ect? costs"? fscal? regime"? and? so? on).?+uring? the? e/ploration? phase"? ma!or? uncertainties? are? related? to? volumes? in? place? and? pro!ect? economics.? s? more? inormation? is? acEuired"? these? uncertainties? are? mitigatedG? 

meanwhile"?uncertainties?related?to?the?recover@?actor"?reservoir?perormance"?pro!ect? cost"?oil?and?gas?price"?and?regulator@?changes?become?more?relevant.? Diven?these?actors"?it?is?diHcult?to?determine"?in?advance"?the?e/istence?and?siBe?o? oil?and?gas?resources"?as?well?as?their?Eualit@"?potential?production?levels"?fnding?and? development? costs"? and? uture? prices? in? the? world?market.?Moreover"? the? resource? is? nonrenewable"?and?a?large?portion?o?the?total?risk?is?pro!ect?specifc.?$hese?acts?bear? important? conseEuences? or? polic@? makers? even? i? a? h@pothetical? social? welare? unction? could? be? determined? with? precision"? the? uncertaint@? surrounding? the? e/istence? and? value? o? petroleum? resources? makes? their? management? a? comple/? endeavor.?-olic@?makers?are?thereore?motivated?to?devise?and?implement?policies?that? reduce?uncertaint@.?-romoting?e/ploration?activities?helps?to?reduce?uncertaint@?but"?as? this?paper?will?show"?reEuires?numerous?polic@?decisions.?? The Decision to Explore for Petroleum Resources $he? frst? crucial? set?o? decisions? a?government? aces? is? whether?or?not? to? e/plore? or? petroleum"?at?what?pace?to?e/plore"?and?who?should?undertake?such?e/ploration.? -etroleum?has?pla@ed?an?important?role?over?the?past?centur@"?and?its?numerous? uses?have?become?an?integral?part?o?toda@,s?global?econom@.?Ience"?the?presence?o? petroleum?in?meaningul?Euantities?can?have?important?economic"?developmental"?and? strategic? conseEuences? or? a? countr@.? =n? this? basis? onl@"? we? could? conclude? that? inormation? on? the? e/istence"? likel@? siBe"? and? distribution? o? petroleum? reserves? is? valuable?to?the?societ@?at?large.?$his?holds?true?even?i?e/ploration?proves?unsuccessul.??