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|Type:||Artigo de evento|
|Title:||The Real-options Approach To Analyze Sequential Investments In Oil And Gas Projects: An Application To Heavy-oil Production Projects|
|Abstract:||The largest remaining reserves of heavy oil can be considered an important energy source for future supply. This means that heavy oil is a strategic resource for the future of energy industry. In order to produce these resources, a petroleum company has to invest from exploration to decommissioning, over a time-period that may reach several years. The problem faced by managers is the correct valuation of sequential investment opportunities whose result will be known only many years ahead. The traditional method for valuation and decision-making is to compute the expected value of the mapped future scenarios with the help of a decision-tree, but its main drawback is that the correct discount rate is hard to estimate because it changes continuously over the nodes of the tree. In this paper, we use the option-pricing approach, noting that after the success of seismic exploration, management has the option to invest in appraisal whose exercise price is the cost of wildcat wells. After the success of appraisal, management has the option to invest in development and production. We apply the proposed model to the analysis of investment in a typical petroleum integrated project. We find different results and conclusions from those of the traditional NPV: 1) Increase in the volatility will increase the value of flexibility to adapt the project to new environment; 2) The strategy of carrying out the project in phases can contribute to increase its value; 3) Even if the expected NPV is negative in some stages, the project is still valuable because of the possibility of increase in value of present value of cash flows in the future. Copyright 2007, Society of Petroleum Engineers.|
|Appears in Collections:||Unicamp - Artigos e Outros Documentos|
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