Analysis of oil and gas exploration potential in Sinopec eastern exploration region

摘要

The eastern exploration region is a SINOPEC's important oil and gas producing base in the Tenth Five Year Plan or late. The relation between reserve growth (in mature oil areas) and new exploration breakthrough (in new exploration area) must be properly handled, coming gradually into a stable good cycle of reserve-production in East China. In addition, the following items should be achieved: 1) Persisting in benefit principle and emphasizing the concept of petroleum economic reserves Economic reserves have twofold meaning: first, the cost of per ton reserves should be limited within fixed standard; second, the development net value of reserves should be equal to or more than zero under the excepted oil price, i.e. the exploration investment can be recovered . 2) Emphasizing cost control and decreasing exploration and development costs Both of oil price and tax are the economic benefit-influencing factors that cannot controlled by oil company, while exploration and development costs are the economic benefit-influencing factors that controlled by oil company. Therefore, decreasing cost is exactly increasing company benefit. 3) Realizing the unification of investment decision, investment benefit and investment risk In oil and gas exploration, it is necessary (1) to realize the rigid duty management of oil and gas exploration projects, (2) to observe investment decision program, (3) to establish the investment risk mechanism that combine duty with right and benefit in different levels. In brief, who make investment will have the right to make decision; who get the benefit will share risk.