Introduction
This week’s column wraps up the ongoing discussion from an economic perspective of the last remaining of the five items, which that I had earlier identified from Guyana’s fiscal regime for its 2016 production sharing agreement, PSA. That item is the notion of the life cycle of a petroleum project.
What is a petroleum project? In petroleum economics a project constitutes: “the link between the petroleum accumulation and the decision-making process, including budget allocation” (World Petroleum Council, Petroleum Resources Management, 2007). Such projects may represent either 1) a single reservoir or field; 2) an incremental development in an already producing field or reservoir; or 3) the integrated development of a group of fields or reservoirs. This referenced group can be held in common ownership.
In addition, an individual project would seek to reach a level where a decision to proceed with spending money on it, or not, is made. Of course, the associated range of estimated recoverable resources would be established for the project (page 42)