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Modifying the L ibyan fiscal regime to optimise its oil reserves and attract more foreign capital part 2: application to CO 2 ‐EOR project in L ibya
Author(s) -
Balhasan Saad A.,
Towler Brian F.,
Miskimins Jennifer L.
Publication year - 2013
Publication title -
opec energy review
Language(s) - English
Resource type - Journals
eISSN - 1753-0237
pISSN - 1753-0229
DOI - 10.1111/opec.12001
Subject(s) - profitability index , profit (economics) , start up , crude oil , economics , business , microeconomics , finance , business administration , engineering , petroleum engineering
This paper extends the analysis of our proposed modification to the first model of L ibyan E xploration and P roduction S haring A greement ( LEPSA I ) to field applications. Four decision‐making models are coded in a spreadsheet program to estimate profitability indicators for two development scenarios. These scenarios are primary and secondary recovery methods with water injection and enhanced oil recovery by injecting carbon dioxide. The paper concludes that the economic profit for the foreign investor (second party) under LEPSA I was improved compared with EPSA IV . Also, L ibya increased its oil reserves with a reasonable decrease of its production share. Moreover, the results showed that the profit indicators under the current production shares (cost recovery) of the fourth model of E xploration and P roduction S haring A greement ( EPSA IV ) were not favourable to the second party. Because of that, the second party would not be motivated to make a decision to invest any money for an oil development projects in L ibya. Finally, the paper investigates how EPSA IV should be redesigned to maximise the L ibyan N ational O il C orporation (first party) oil reserves and give more attention to the economic objectives of the second party.