IDEAS home Printed from https://ideas.repec.org/a/lpe/efijnl/201514.html
   My bibliography  Save this article

Oil Exploration Economics: Empirical Evidence from Indonesian Geological Basins

Author

Listed:
  • Harry Patria
  • Vid Adrison

    (EP Energy and Faculty of Economics and Business Universitas Indonesia)

Abstract

Oil exploration has been subject to economic research for decades. Earlier studies of exploration models are mostly discussed the behavior of exploration at the macro-level analysis such as field, firm, region, and continental. This paper then focuses on the geological and economic factors that determine the well-drilling decision at the micro-level using disaggregated panel data of 32 geological basins in Indonesia over the period of 2004–2013. This study shows that the number of drilled wells is determined significantly by the lag of success rate, lag of discovery size, lag of global oil price, and regional location of geological basin.

Suggested Citation

  • Harry Patria & Vid Adrison, 2015. "Oil Exploration Economics: Empirical Evidence from Indonesian Geological Basins," Economics and Finance in Indonesia, Faculty of Economics and Business, University of Indonesia, vol. 61, pages 196-213, December.
    • Handle: RePEc:lpe:efijnl:201514
    as

    Download full text from publisher

    File URL: https://lpem.org/repec/lpe/efijnl/201514.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Farzin, Y. H., 2001. "The impact of oil price on additions to US proven reserves," Resource and Energy Economics, Elsevier, vol. 23(3), pages 271-292, July.
    2. Mohn, Klaus & Osmundsen, Petter, 2008. "Exploration economics in a regulated petroleum province: The case of the Norwegian Continental Shelf," Energy Economics, Elsevier, vol. 30(2), pages 303-320, March.
    3. Boyce, John R. & Nøstbakken, Linda, 2011. "Exploration and development of U.S. oil and gas fields, 1955-2002," Journal of Economic Dynamics and Control, Elsevier, vol. 35(6), pages 891-908, June.
    4. Iledare, Omowumi O., 1995. "Simulating the effect of economic and policy incentives on natural gas drilling and gross reserve additions," Resource and Energy Economics, Elsevier, vol. 17(3), pages 261-279, November.
    5. Dahl, Carol & Duggan, Thomas E., 1998. "Survey of price elasticities from economic exploration models of US oil and gas supply," Journal of Energy Finance & Development, Elsevier, vol. 3(2), pages 129-169.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Harry Patria, 2021. "The Role of Success Rate, Discovery, Appraisal Spending, and Transitioning Region on Exploration Drilling of Oil and Gas in Indonesia in 2004–2015," Economics and Finance in Indonesia, Faculty of Economics and Business, University of Indonesia, vol. 67, pages 183-194, Desember.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Klaus Mohn & Petter Osmundsen, 2011. "Asymmetry and uncertainty in capital formation: an application to oil investment," Applied Economics, Taylor & Francis Journals, vol. 43(28), pages 4387-4401.
    2. Skjerpen, Terje & Storrøsten, Halvor Briseid & Rosendahl, Knut Einar & Osmundsen, Petter, 2018. "Modelling and forecasting rig rates on the Norwegian Continental Shelf," Resource and Energy Economics, Elsevier, vol. 53(C), pages 220-239.
    3. Osmundsen, Petter & Rosendahl, Knut Einar & Skjerpen, Terje, 2015. "Understanding rig rate formation in the Gulf of Mexico," Energy Economics, Elsevier, vol. 49(C), pages 430-439.
    4. Ringlund, Guro Bornes & Rosendahl, Knut Einar & Skjerpen, Terje, 2008. "Does oilrig activity react to oil price changes An empirical investigation," Energy Economics, Elsevier, vol. 30(2), pages 371-396, March.
    5. Taran Fæhn, Cathrine Hagem, Lars Lindholt, Ståle Mæland, and Knut Einar Rosendahl, 2017. "Climate policies in a fossil fuel producing country demand versus supply side policies," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1).
    6. Osmundsen, Petter & Rosendahl, Knut Einar & Skjerpen, Terje, 2012. "Understanding Rig Rates," UiS Working Papers in Economics and Finance 2012/9, University of Stavanger.
    7. Mohn, Klaus & Osmundsen, Petter, 2008. "Exploration economics in a regulated petroleum province: The case of the Norwegian Continental Shelf," Energy Economics, Elsevier, vol. 30(2), pages 303-320, March.
    8. Jamil, Faisal, 2012. "Impact of different public E&P policies on natural gas reserves and production in Pakistan," Resources Policy, Elsevier, vol. 37(3), pages 368-374.
    9. Güntner, Jochen H.F., 2019. "How do oil producers respond to giant oil field discoveries?," Energy Economics, Elsevier, vol. 80(C), pages 59-74.
    10. Mohn, Klaus, 2009. "Elastic Oil. A primer on the economics of exploration and production," UiS Working Papers in Economics and Finance 2009/10, University of Stavanger.
    11. Chen, Fan & Linn, Scott C., 2017. "Investment and operating choice: Oil and natural gas futures prices and drilling activity," Energy Economics, Elsevier, vol. 66(C), pages 54-68.
    12. Osmundsen, Petter & Mohn, Klaus & Misund, Bard & Asche, Frank, 2007. "Is oil supply choked by financial market pressures?," Energy Policy, Elsevier, vol. 35(1), pages 467-474, January.
    13. Johannes Mauritzen, 2017. "The Effect of Oil Prices on Field Production: Evidence from the Norwegian Continental Shelf," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 79(1), pages 124-144, February.
    14. Pernille Parmer & Steinar Strøm & Helge Sandvig Thorsen & Inger Ubbe & Bjørnar Andreas Kvinge, 2018. "Investments on the Norwegian Continental Shelf - An Empirical Analysis," CESifo Working Paper Series 7370, CESifo.
    15. Khalifa, Ahmed & Caporin, Massimiliano & Hammoudeh, Shawkat, 2017. "The relationship between oil prices and rig counts: The importance of lags," Energy Economics, Elsevier, vol. 63(C), pages 213-226.
    16. Gerhard Toews and Alexander Naumov, 2015. "The Relationship Between Oil Price and Costs in the Oil Industry," The Energy Journal, International Association for Energy Economics, vol. 0(Adelman S).
    17. Dahl, Roy Endré & Lorentzen, Sindre & Oglend, Atle & Osmundsen, Petter, 2017. "Pro-cyclical petroleum investments and cost overruns in Norway," Energy Policy, Elsevier, vol. 100(C), pages 68-78.
    18. Chevillon, Guillaume & Rifflart, Christine, 2009. "Physical market determinants of the price of crude oil and the market premium," Energy Economics, Elsevier, vol. 31(4), pages 537-549, July.
    19. Aune, Finn Roar & Mohn, Klaus & Osmundsen, Petter & Rosendahl, Knut Einar, 2010. "Financial market pressure, tacit collusion and oil price formation," Energy Economics, Elsevier, vol. 32(2), pages 389-398, March.
    20. Carlos Pestana Barros & Guglielmo Maria Caporale & Luis A. Gil-Alana, 2012. "Long Memory in German Energy Price Indices," CESifo Working Paper Series 3935, CESifo.

    More about this item

    Keywords

    Drilling; Geological Variables; Economic Variables; Exploration;
    All these keywords.

    JEL classification:

    • L71 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Mining, Extraction, and Refining: Hydrocarbon Fuels
    • Q35 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Hydrocarbon Resources

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:lpe:efijnl:201514. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Muhammad Halley Yudhistira The email address of this maintainer does not seem to be valid anymore. Please ask Muhammad Halley Yudhistira to update the entry or send us the correct address (email available below). General contact details of provider: https://edirc.repec.org/data/feuinid.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.