Home > Free Essays > Business > Risk Management > Petroleum Exploration and Production Risk Analysis

Petroleum Exploration and Production Risk Analysis Report

Exclusively available on IvyPanda Available only on IvyPanda
Updated: Jul 16th, 2020

There is no use denying the fact that the sphere of petroleum engineering is one of the most topical and important nowadays (Beattie, n.d.). It is possible to say that new investments into this sphere will be made and a great number of different companies will try to obtain benefit and become influential. However, this business is also connected with a great risk as companies, which work in this sphere, can lose their money and even become bankrupts.

To become prosperous and save its funds any company which deals with this sphere should answer several important questions which will help it to obtain the clear image of a new project. First of all, the size and perspectives of a new business should be analyzed. Moreover, it is necessary to determine what potential stakeholders can be involved in the issue and what the expected level of incomes is (Suslick, Schiozer, & Rebelo-Rodriguez, 2009). All these steps are known as risk analysis. A company has to take into account all factors which influence the issue and all potential actors which could either prevent or help a company in the development of a new project (Business pulse: oil and gas n.d).

Taking into account the main conditions of the project, it should be said that the most risky issue will be connected with its financial aspect. That is why, this sphere should be analyzed precisely. The thing is that there are certain uncertainties which make the work of a company more complicated. First of all, oscillations in the price of oil, which are rather hard to predict, are important. The price of the project can become higher than the expected incomes. Additionally, the cost of equipment, its exploitation and delivery should also be taken into account. All these factors influence the process of decision making greatly and should obviously be taken into account. That is why, such remedy as decision tree could be created for a company to be able to analyze all advantages and disadvantages of the issue and make a certain conclusion. The following decision tree can be suggested for the given project.

Should we invest in this project?
Should we invest in this project?

Having analyzed the given decision tree, it is possible to state the fact that there are some factors which could be taken as the evidence of success and will obviously lead to the further development of the project. At the same time, great financial risks and absence of a certain perspective of the development of the project combined with a strong rivalry and unstable situation on the market can be taken as obvious signs of vague chances of the whole issue and can lead to disastrous results.

Reference List

Beattie, A n.d., . Web.

Business pulse: oil and gas n.d. Web.

Suslick S, Schiozer D, & Rebelo-Rodriguez, M 2009, . TERRÆ, vol. 6, no.1, pp. 30-41. Web.

This report on Petroleum Exploration and Production Risk Analysis was written and submitted by your fellow student. You are free to use it for research and reference purposes in order to write your own paper; however, you must cite it accordingly.
Removal Request
If you are the copyright owner of this paper and no longer wish to have your work published on IvyPanda.
Request the removal

Need a custom Report sample written from scratch by
professional specifically for you?

Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar

certified writers online

Cite This paper
Select a referencing style:

Reference

IvyPanda. (2020, July 16). Petroleum Exploration and Production Risk Analysis. https://ivypanda.com/essays/petroleum-exploration-and-production-risk-analysis/

Reference

IvyPanda. (2020, July 16). Petroleum Exploration and Production Risk Analysis. Retrieved from https://ivypanda.com/essays/petroleum-exploration-and-production-risk-analysis/

Work Cited

"Petroleum Exploration and Production Risk Analysis." IvyPanda, 16 July 2020, ivypanda.com/essays/petroleum-exploration-and-production-risk-analysis/.

1. IvyPanda. "Petroleum Exploration and Production Risk Analysis." July 16, 2020. https://ivypanda.com/essays/petroleum-exploration-and-production-risk-analysis/.


Bibliography


IvyPanda. "Petroleum Exploration and Production Risk Analysis." July 16, 2020. https://ivypanda.com/essays/petroleum-exploration-and-production-risk-analysis/.

References

IvyPanda. 2020. "Petroleum Exploration and Production Risk Analysis." July 16, 2020. https://ivypanda.com/essays/petroleum-exploration-and-production-risk-analysis/.

References

IvyPanda. (2020) 'Petroleum Exploration and Production Risk Analysis'. 16 July.

Powered by CiteTotal, essay citation maker
More related papers