Factors Affecting Global Petroleum Exploration and Development and Impacts on the Attractiveness and Prospectivity of the U.S. Gulf of Mexico Deepwater. Wumi Iledare. Funded by the U.S. Department of the Interior, Minerals Management Service, and the LSU Coastal Marine Institute. Project Funding: $264,332.
The attractiveness of a region (country/basin/lease) for E&P investment depends upon the perception of its prospectivity, which broadly speaking, refers to the technical attributes (source rock, reservoir, cap rock, etc.) as well as legal and fiscal arrangements for the commercial exploitation of the petroleum resources. The technical prospectivity of the region is important, since if the potential of an area for supporting hydrocarbon discovery is considered low, the region will hold little interest to E&P companies. The determinants of a commercial discovery depend in part on the results of the exploration program (the size and location of the field, the complexity of the reservoir structure, the quality and type of hydrocarbons, etc.), existing infrastructure in the region, and the fiscal conditions that govern revenue sharing. Other conditions such as the rule of law and geopolitical factors also play important roles in assessing a region's prospectivity.
This study examines resource growth, technical discovery success, and exploration efficiency to assess the attractiveness and prospectivity of the U.S. Gulf of Mexico deepwater and the deep shelf. The research will also assess the effectiveness of regulatory programs, fiscal incentives, and technology progress on OCS deepwater investment attractiveness or investment climate using measures such as effort adjusted reserve addition trends, drilling costs, and finding and development cost per barrel of crude oil and per Mcf of natural gas. In an overall sense the study shall attempt to perform econometric analysis of past deepwater activities to explain the extent to which changes in deep offshore activities in the GOM and its attractiveness can be attributed to shallow water resource depletion, technology progress, and economic and fiscal incentives. The study will complement and expand the cost-extension project Capital Investment Decision Making (1435-01-01-30951) in a broader framework and consider the factors that influence exploration investment decisions in offshore basins around the world.