The economics of petroleum exploration and development in China

摘要

The international oil and gas industry views China as a key country in its search for petroleum exploration and development investment opportunities. China offers a range of opportunities – from mature, producing areas to frontier exploration areas. When Oil and gas companies make investment decisions to explore for and develop petroleum resources in a particular country, they need to examine many aspects of that country. The decision to invest focuses on assessments of the likely economic rewards and the risks involved. In this thesis, I attempt to provide a detailed assessment of various factors affecting the economics of petroleum exploration and development in China from an oil and gas investors’ point of view. The thesis is aimed at assisting international oil and gas companies to make investment decisions and assisting their understanding of the petroleum prospects in China. Based on detailed economic modelling, the thesis aims to demonstrate the profitability of exploration and development of a range of hypothetical but representative oil and gas prospects and discoveries in different areas in onshore and offshore China. The thesis also reviews the key fiscal terms in China and shows the economic impact of individual components of Chinese fiscal terms on field developments in China. The thesis quantifies and analyses the impact of Chinese fiscal terms by measuring the Government Take for a range of hypothetical oil field developments. It includes an analysis of the flexibility of the Chinese fiscal terms by quantifying the effect of Government Take on marginal field developments. In addition, the thesis intends to assess the competitiveness of Chinese fiscal regime in terms of its severity and flexibility as compared to other fiscal regimes in the Asia Pacific Region.