Expanding Conceptual Understanding of the Economics of Mature Petroleum Provinces

There are now many mature petroleum provinces around the world. These produce their own distinct issues including policy design to maximise economic recovery, which is generally agreed to be the overall objective. The issues which arise include economics of enhanced oil recovery schemes, optimising the use of infrastructure such as for use by third parties, financial liability for decommissioning, and tax relief for the decommissioning costs.

At the University of Aberdeen in the Department of Economics Professor Alex Kemp has produced many research papers on these subjects. They deal with both conceptual issues and empirical studies of the situation in several petroleum provinces. Many deal with the UK Continental Shelf. Examples include the Economics of EOR involving polymer flood injection, low salinity waterflood, miscible gas injection, and CO2 injection. With respect to decommissioning, studies have been undertaken on the comparative merits and demerits of letters of credit, decommissioning Trust Funds, and Surety Bonds as devices to deal with the problem of financial security. Studies have been undertaken on the design of various schemes for the relief of decommissioning costs for tax purposes and in production sharing agreements.

As well as a substantial body of relevant literature in the Department of Economics there are examples of past dissertations dealing with the topics outlined above.