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Hydrocarbons will remain essential to global economic development and prosperity for decades to come. Meeting rising energy demand needs to be reconciled with the goals of energy security and environmental protection. Energy efficiency and conservation can make a major contribution to moving the world onto a more sustainable energy path. Most of the potential for saving energy lies with end users, yet the oil and gas industry continues to invest heavily in further improving the energy efficiency of its own operations, reducing waste and helping final consumers to use less fuel. Major challenges remain, notably in countering the increased use of energy to exploit less accessible crude oil resources and to meet tougher fuel quality standards. The oil and gas industry, as a stakeholder in the energy debate, will play its part in further promoting rational energy use all along the supply chain for the good of everyone. Enhancing energy efficiency is an important issue for IPIECA members, and companies can contribute by implementing changes in their operations, planning and investments. There are many positive drivers for industry as energy efficiency can help in lowering operating costs and reducing environmental impacts. Energy efficiency can also extend the life of finite natural resources, and help keep energy affordable for consumers by lowering the investment costs and the effort required to meet rising demand. This paper draws on the new IPIECA publication, Saving Energy in the Oil and Gas Industry, which was launched at the 15th Session of the Commission for Sustainable Development. Case studies featured in the publication are included in the appendix.

The oil and gas industry is experiencing an ageing workforce and skills shortages, while petroleum engineering schools are struggling and many industry recruits are coming from other degree disciplines. This paper describes how these challenges are being addressed in a Western Australian (WA) context. The overall aim of the oil & gas engineering program at The University of Western Australia (UWA) is to give students an orientation to the extraction, processing and infrastructure requirements of the oil and gas industry. This is achieved by offering maximum flexibility in course offerings (entry level, duration and subject matter) and through maximum utilization of existing teaching resources. Strong industry interaction is another key feature of the program.

Oil and gas production cost keeps increasing because of going-up of water cut, going-down of oil connect, difficulty and expensive cost of treating polluted water. It is true especially for treating and discharging polluted water in Sichuan gas filed. Generally, oil and gas production procedures include producing oil of gas combined with water, separating oil or gas from water on surface, treating polluted water, and rejecting polluted water. The cost of treating polluted water is up to ¥20–30RMB/m3. The output of water on average is 60–80 m3/day and 200 m3/day maximally in the Northwest gas field of SPA. The cost of treating polluted water is about 30% of production cost, treat polluted water environment is the top goal for oil and gas company to pursuit. It is necessary to employ underneath close loop producing technology that oil or gas is separated underneath, polluted water is rejected, oil or gas is diverted on surface. The technology may in crease oil and gas production by 20–25%, due to increase of producing pressure drawdown, and reduce production cost by 50% because of improving working conditions of facilities, the cost of treating polluted water reduces by 50–60% and the pollution of water is avoided efficiently by employing new-type dual flow channel spiral separator.

This paper presents a method to forecast emissions to air from the offshore production of oil and gas. The method enables oil companies quickly to establish reliable forecasts of for instance CO2 and NOX emissions from offshore oil and gas fields that uses fossil fuels for power generation. The method can also be used to forecast emissions on aggregated levels. The background for developing the method is addressed, the algorithms used and the input data required are described and test results are presented. The method links the emissions to forecasts of oil and gas production and transport, gas and water injection, gas lift and drilling of exploitation wells. In addition, the efficiency in power generation and distribution, the type and LHV of fuel, emission factors for CO2 and NOX and effects of exhaust gas cleaning systems are incorporated in the algorithms. The method is suitable for estimation of annual emissions over the lifetime of the field in connection with field development planning, governmental reporting as well as for simulation of effects on emissions by altering production strategies and plans. Norsk Hydro has used the method for preparation of the company's annual report of lifetime emission forecasts to the Norwegian Authorities. Norsk Hydro's experience from utilization of the method, including system testing and preparation of prognoses will be presented.

SPE Member Summary This paper presents a review of managing oil and gas product price risk with the basic types of derivative products available to producers. Introducing the futures markets, basic types of hedges and factors affecting prices will be covered. Several case histories will be discussed in detail from the initial decision making process to actual performance to date. Introduction Risk management for product prices using the futures and commodities market is not a new concept. It has been available to the agricultural markets since before the Civil War and since 1933 for the precious metals markets. Crude oil was the first energy contract to be commoditized in 1983. The natural gas futures contract opened for trading on April 3, 1990. The market that transacts all energy futures is the New York Mercantile Exchange, conveniently known as the "NYMEX." Crude oil is traded up to 34 months into the future, in 1,000 barrel (bbl) increments, and listed in $/bbl Natural gas is traded up to 18 months into the future, in 10,000 MMBtu increments, and listed in $/MMBtu. Both oil and gas are also traded in the futures options market on the NYMEX which is subordinate to the futures market. The term "Derivatives," which means derived from the futures and options markets, is the common word used today to describe hedging and risk management. This paper will cover only the three basic derivative products: swaps, floors, and collars. Risk management does not mean eliminating price risk but rather transferring that risk to a determined price. The current industry view on oil and gas prices for the long term future is $18 to $20 per barrel and $1.90 to $2.00 per MMBtu with modest annual escalations. Because of the nature of oil and gas production and consumption, producers should plan on short-term price volatility always being present. The ability to protect against a fall in prices and be able to take some advantage of price increases, which hedging in the derivatives market provides, is invaluable to planning, budgeting, and financing. The use of derivatives for oil and gas interest will be necessary in order to remain competitive and profitable in the industry. Background To arrive at a description of the derivatives market one must understand the basics of the futures and options markets. A futures contract is the buying of a specified volume at the current quoted price for a specific month in the future. Once a futures contract is bought, it can be sold back to the market or held until it expires. Upon selling or expiration of the contract the buyer will receive the quoted price which may be more or less than the original purchase price. An options contract is the right to buy or sell a futures contract at a specified price and time. The specified price is often called a strike price. P. 275

Abstract This paper will describe Paragon Engineering Services' past and current work in designing oil and gas facilities for Western joint ventures located in northwestern Russia in the Timan-Pechora basin. Also, this paper will further describe our current joint venture with a local Russian design institute, a comparison of Russian and Western design philosophies, and our observations and conclusions about work in Russia. The civil and mechanical designs have been influenced by the arctic environment, sourcing of materials and equipment, local environmental regulations, geotechnical considerations, and logistics. The civil design discussion centers on issues dealing with pile supported foundations, roads, and pads, performed in permafrost regions. The project's civil design had to meet the goals of maintaining the thermal stability of the permafrost, minimizing physical damage to the tundra, and supporting equipment. The mechanical design discussion focuses on freeze protection, module sizing and configuration, and operating and maintenance practices for a development north of the Arctic Circle. Due to the high pour point of the crude oil, the mechanical design had to address the problem of a flow stoppage at low ambient temperatures, along with the usual freezing problems due to the arctic climate. The basis for selecting the size and configuration of equipment modules was based on sourcing materials and equipment in the U.S., the logistics of transportation, and operations and maintenance. Paragon began performing joint work with a local Russian design institute located in the Komi Republic while working on a recent project. Paragon became familiar with the institute's capabilities and gained greater understanding of the similarities and the differences between Russian and Western engineering firms. From past and ongoing work, we believe that to have a successful facilities project you must study the local logistics, consider environmental issues, gather geotechnical data, develop a plan of supply for equipment and materials, and involve a local Russian design institute as early as possible.

This paper was prepared for the 1974 Eastern Regional Meeting of the Society of Petroleum Engineers of AIME, to be held in Washington, D.C., Nov 14–15, 1974. Permission to copy is restricted to an abstract of not more than 300 words. Illustrations may not be copied. The abstract should contain conspicuous acknowledgment of where and by whom the paper is presented. Publication elsewhere after publication in the JOURNAL paper is presented. Publication elsewhere after publication in the JOURNAL OF PETROLEUM ENGINEERS or the SOCIETY OF PETROLEUM ENGINEERS JOURNAL is usually granted upon request to the Editor of the appropriate journal provided agreement to give proper credit is made. provided agreement to give proper credit is made. Discussion of the paper is invited. Three copies of the discussion should be sent to the Society of Petroleum Engineers office. Such discussion may be presented at the above meeting and, with the paper, may be considered for publication in on of the two SPE magazines. In a recent talk at the Louisville meeting on "Coal and the Environment," I suggested that the conversion of coal to liquids and to gases has been practiced in one form or another since the early days of this century. These early conversions resulted from construction of slot type coke ovens which produced by-product tar and gas. In 1913, Bergius carried out his original coal hydrogenation experiments and the original Fischer Tropsch work was carried out in the early 1920's. As the U.S. love affair with the automobile grew, the interest in producing motor fuel from coal tended to be up or down as a function of the then projected worldwide supplies of crude oil. During World War II, the Axis Powers used coal as a basic raw material to provide fuel for their military aircraft. In the closing days of World War II, our Congress provided for a synthetic fuel program in the United States and demonstration program in the United States and demonstration plants were constructed at Rifle, Colorado, and plants were constructed at Rifle, Colorado, and Louisiana, Missouri. In the early 1960's, work by the Office of Coal Research (OCR) tended to reinforce and augment efforts by the Bureau of Mines in the fields of coal liquefaction and gasification. More recently, the American Gas Association entered into an agreement with the Office of Coal Research to accelerate the development of processes for converting coal into pipeline quality gas. Subsequent to that, as an energy crisis tended to develop in the United States, both the Bureau's programs and the OCR programs were provided with programs and the OCR programs were provided with additional funds to accelerate development of coal-based processes. The net result of all of the above work has been to provide the United States with a sound technological base for converting coal to fuel gas, pipeline-quality gas, liquid boiler fuels, refined petroleum products, and various chemical products. The key to a successful synthetic fuel products. The key to a successful synthetic fuel industry, however, involves both process technology and the process economics. Generally, processes are available that produce clean liquid products from coal at a produce clean liquid products from coal at a price competitive with crude oil ranging from price competitive with crude oil ranging from $8-$10 per barrel. How, you may ask, can this be done? The conversion of coal can be undertaken in four basic ways:Coal carbonization, or pyrolysis, followed by hydrogenation and carbonization liquid. Gas is produced in both the hydrogenation and carbonization operations.

Riley, Thomas E.; Member SPE-AIME, Pittsburgh National Bank Pittsburgh National Bank Copyright 1980, American Institute of Mining, Metallurgical, and Petroleum Engineers, Inc. Petroleum Engineers, Inc. This paper was presented at the 1980 Society of Petroleum Engineers of Aime Eastern Regional Meeting held in Morgantown, West Virginia, November 5–7, 1980. The material is subject to correction by the author. Permission to copy is restricted to an abstract of not more than 300 words. Write: 6200 N. Central Expwy., Dallas, Texas 75206. Introduction In recent years, the Appalachian area has experienced a resurgence of oil and gas drilling and development. Increases in prices and the outlook for continued growth in the value of oil and gas has generated this growth in activity. Most of this growth has come from the smaller, independent, operator and contractor. It is these companies who must rely on additional outside capital to achieve their growth. This capital can be generated either from new investors or from debt. This paper will deal with the various methods of securing and structuring debt for these different facets of the oil and gas business in the Appalachian area. BANKER'S VIEW POINT For the small, independent oil and gas or contracting companies, which comprise the majority of the business in the Appalachian area, the only available major debt structure is secured lending. Secured lending means that banks will loan money to a company using a part or all of a company's assets as collateral. For a contractor, this collateral is his equipment; for a pipeline owner, it is his pipeline and sales and purchase contracts; and for the pipeline and sales and purchase contracts; and for the producer it is his oil and gas reserves. It is the producer it is his oil and gas reserves. It is the bank's role, then, to determine (1) the value of this collateral and whether it will generate sufficient cash flow to pay interest and retire debt, as well as (2) the borrower's financial responsibility, character, integrity, business stability and potential, and business relationship to the bank. potential, and business relationship to the bank. This latter determination can be established with financial statements, earnings reports, business references, and credit reports. Determining the value of collateral presents a more difficult problem. For equipment, this can be done through an problem. For equipment, this can be done through an appraisal; in the case of oil and gas reserves, this requires a property evaluation by the bank's oil department or an outside consultant. FINANCING DRILLING AND SERVICE COMPANIES Capital requirements for drilling and service companies are usually for new or additional equipment. This equipment, then, is the collateral available for financing. Banks traditionally loan on the order of 80% of the purchase price of the equipment. The term of the loan is usually three to seven years depending upon the physical life of the machinery, area of activity, and company/bank relationship. Although the bank must ascertain the market value of the equipment, attention must also he paid to the estimated cash flows, annual usage, general market demand, and borrower's past operational performance. Generally, the company's financial performance. Generally, the company's financial statements and pro forma income statements would be necessary also. The interest rate would be negotiable usually a fixed rate over prime. Another means of financing equipment is Leasing. Although, suffice it to say that leasing is beyond the scope of this paper there are sufficient pros and cons as to whether to lease or to purchase and mortgage, that each should be investigated as the rates, tax implications, and overall costs. Financing equipment usually forms a relatively small portion of an energy hank's overall portfolio. PRODUCT PIPELINES PRODUCT PIPELINES Traditionally, except in the case of utilities, pipeline construction has been almost solely for the pipeline construction has been almost solely for the purpose of expediting the delivery of one's product purpose of expediting the delivery of one's product to market, rather than as an economic venture in and of itself. Due to the passage of the Natural Gas Policy Act of 1978, higher wellhead and transportation Policy Act of 1978, higher wellhead and transportation rates, pipelines have become self-supporting business ventures. In addition, increased inability of purchasers to generate construction capital and purchasers to generate construction capital and increased overall supply has left it to the Independent to be more aggressive in taking his product to market. product to market. The major considerations of a bank in reviewing a loan for a pipeline are:Engineering - The pipeline design and costs must be reviewed as to the pipeline design and costs must be reviewed as to the adequacy of such numbers.

Abstract Acquisition plays an important part for most companies in their continued growth, expansion and diversification. Oil and gas companies are no exception. There are numerous methods and yardsticks for evaluation of oil and gas properties and/or companies. The aim, in each case, is to arrive at a fair market value of the properties based on the information available. A systematic approach is presented here for a quick, easy and accurate evaluation of an oil and gas company. The criteria of profitable acquisitions lie in understanding the basic concepts of discounted cash flow, rate of return, etc. Two computer programs are described - one to evaluate oil and gas properties and the other to analyze financial state of the company. Income tax, write-offs, cost of money, etc., should also be considered before reaching a final value. Introduction Very few papers have been published on the evaluation of oil and gas companies from the engineer's point of view. The papers cover only a general outline of the procedure to be followed. The details are not spelled out. This paper presents a brief discussion into all aspects of engineering and financial evaluations of oil and gas companies. One does not have to have a strong financial background to understand, to interpret and to make intelligent use of the financial data available on a company. The subject matter is described in three parts, namely, engineering evaluation of the properties, financial analysis of the company and consideration of some of the other factors. PROPERTY EVALUATION This is the first step of any evaluation of an oil and gas company. To arrive at a fair market value of its properties, the reserves of oil and gas are estimated and a reasonable production forecast is made. The geological production forecast is made. The geological and engineering considerations take into account location of the field, type of structure, net pay, type of formation, past performance, pay, type of formation, past performance, productive capacity of the wells, recovery productive capacity of the wells, recovery schemes, e.g., waterflood, gas injection, different types of solvent flood, thermal recovery methods, etc. The future production forecast depends on domestic demand, exports, etc. For example, in Alberta, Canada, the Energy Resources Conservation Board sets the allowable based on demand for oil in Canada and exports to the U. S.

Introduction Under the word "policy", Webster offers the definition of "prudence or wisdom in the management of affairs." An alternate definition is "a settled course adopted and followed by a government. . ." In the preface to the dictionary, the reader is informed that in general the order of the definitions given for any of the words follows the practice of placing the earliest ascertainable meaning first, and that later meanings are arranged in the order shown to be the most probable by dated citations and semantic development. Does this mean then, in the strictest sense of the word, that when a government sets about to develop policy for whatever it has in mind at the moment, it policy for whatever it has in mind at the moment, it is first glided by "prudence and wisdom", but then after a certain amount of time has passed and after our semantics experts have had a go at it, policy becomes a settled course adopted and followed by a government", and "prudence and wisdom" have fallen by the wayside? I do not wish to challenge Webster nor do I wish to attempt to offer you a more acceptable definition of policy. But I would emphasize that transfer from the sometimes abstract of the dictionary to the realities of everyday life is not without its contradictions. So it is with our energy policies, and certainly with respect to the policies on oil and gas of the U. S. Government. I can list for you the objectives of energy policy objectives so broad and so unchallengeable that virtually any nation in the world would be willing to subscribe to them. These objectives are in essence an adequate supply of cheap energy, from stable and diverse sources, whose production and use are as free as possible of damage to our environment. We can all agree on these points, and they indeed form the guidelines your government attempts to follow when undertaking courses of action that may have impact upon the current or future well-being of energy producer and consumer alike. To describe the objectives of an energy policy is one thing; but it is quite a different matter to define succinctly just what this energy policy is, and even more difficult to make this policy work. problems are so complex, so diverse, that they problems are so complex, so diverse, that they literally defy solution through the formulation of standing policy that may be applicable now and for some time to come. Rather, we continue to seek fulfillment of our broad objectives through judicious interplay among federal and state governments and the private sector. Role of Federal, State, and Local Authority There is no single agency to bring about coordination and eliminate overlapping that adds to the difficulties of our task. All branches of the federal government have inputs that affect energy policy. To this must be added the several independent agencies such as the Federal Power Commission (FPC) and the Atomic Energy Commission (AEC) that play a major role in their own areas of competence. But in the petroleum industry, government activity-both Federal and local-has been confined almost exclusively to regulatory functions. Private enterprise has had the responsibility for the development and our oil and gas. In the legislative branch nearly all of the congressional committees affect one or another aspect of energy policy, and in the executive branch we have some 61 bureau-level organizations that have substantial concern with one or another aspect of the energy field. The Post Office probably has been the lone organization not probably has been the lone organization not involved in energy policy in some fashion. State and local governments hold considerable authority over the energy-producing industries, especially in pollution control, taxation and conservation. The procedures and policies that these state and local governments follow are in no way uniform, although some attempts toward solution of mutual problems, notably the interstate Oil Compact Commission (IOCC), have been successful. The Private Sector Scholarly works do not usually identify the private sector as a force in policy decisions in private sector as a force in policy decisions in countries outside the United States. P. 23

Abstract My expositions are divided into four parts. The first part defines the whole system of economic optimizations, part defines the whole system of economic optimizations, whereby the connection and interdependence between the optimization of new storage systems and that of the routine operation of new and/or present storage systems are identified. In the second part a global model is described for the optimization of a storage system from the point of view of layout and operation. The third part is devoted to structural investment optimization; specimen cases for enlargement strategy are described which deal, with regard to the long-term profit maximization with the adoption of the storage systems to the demand which grows according to the individual concern and the optimum price strategy in combination with the optimum enlargement capacity profile. The final section of the work is concerned with short-term production, transport and storage planning. The expositions are valid only in so far as-long term profit maximization is accepted as the sole criterium of profit maximization is accepted as the sole criterium of decision. We must depart from the optimum layout and operating conditions to the extent to which political, urbanistic and supply-securing considerations limit the profit-objective. Introduction 1. Aim and sphere of application of the expositions The economic and technical problems of underground storage of petroleum and natural gas are among the most interesting and, at the same time, the most complicated spheres of company management in the oil industry. It is precisely here, however, that clear ideas oil the basic procedures and associations are the indispensable prerequisite for the optimum layout and operation of the underground storage systems I have endeavored to reduce the problems of underground storage to their essentials and renouncing unnecessary technical and economic details to work out the central procedures and basic principles. principles. My expositions are divided into four parts. The first part defines the whole system of economic optimizations, whereby the connections and interdependence between the optimization of new storage systems and that of the routine operation of new and/or present storage systems are identified. present storage systems are identified. In the second part a global model is described for the optimization of a storage system from the point of view of layout and operations. The third part is devoted to structural investment optimization; specimen cases for enlargement strategy are described which deal, with regard to the long-term profit maximization, with the adoption of the storage systems to the demand which grows according to the individual concern and the optimum price strategy in combination with the optimum enlargement capacity profile. The final section of the work is concerned with short-term production, transport and storage planning. production, transport and storage planning. The expositions are valid only in so far as long-term profit maximization is accepted as the sole criterium of decision. We must depart from the optimum layout and operating conditions to the extent to which political, urbanistic and supply-securing considerations limit the profit-objective.

Publication Rights Reserved This paper is to be presented at the SPE Regional Meeting in Liberal, Kansas, November 18–19, 1965, and is considered the property of the Society of Petroleum Engineers. Permission to publish is hereby restricted to an abstract of not more than 300 words, with no illustration, unless the paper is specifically released to the press by the Editor of the Journal of Petroleum Technology or the Executive Secretary. Such abstract should contain conspicuous acknowledgment of where and by whom the paper is presented. Publication elsewhere after publication in Journal of Petroleum Technology or Society of Petroleum Engineers Journal is granted on request, providing proper credit is given that publication and the original presentation of the paper. The purpose of this paper is to try to present an industry picture which is based upon trends and statistics that may enable you to see what the overall future outlook may be for the petroleum engineer. No attempt is being made to quantify you as individuals. The obligation which you as an individual have, and the experience and success which you may achieved is pretty much up to you. The prime objective of engineering training is to gain knowledge and, through the application of such knowledge, to make possible the production of the required supply of minerals and raw materials and to utilize such materials to provide a better product to the ultimate consumer at a lower cost. The participation of the petroleum engineer in industry is governed by knowledge, desire, and effort, or, perhaps, they should be re-arranged with effort heading the list. The value of the petroleum engineer is dependent upon what he achieves for himself and for his employer. Petroleum engineering is a relatively new field. In 1900 there were only 3000 engineers classed as metallurgical and mining.

ABSTRACT As a result of the Santa Barbara Channel oil pollution incident in early 1969, various California State agencies undertook a thorough joint study of state regulations and inspection practices. Recommendations were made to assure that public safety, property and environmental quality received maximum protection consistent with proper economic development of the oil and gas resources of an increasingly urbanized California. State agencies have various responsibilities in regard to oil operations and oil pollution. The Division of Oil and Gas is responsible for the conservation and protection of oil, gas and fresh water. The State Lands Commission, operating through the State Lands Division, represents the State as a land and mineral owner, and protects the State's interest in the development of same. The State Water Resources Control Board and the Regional Water Quality Control Boards are responsible for water quality and control of water pollution. The Department of Fish and Game is responsible for fish and wildlife resources in California and, in carrying out its duties, also enforces state and federal pollution laws. The Division of Industrial Safety is responsible for assuring safe working environments. Under state regulation and supervision, the California oil industry has an excellent record in the prevention of major oil spills. State regulations are not so rigid as to preclude discretion. This approach has been successful and should be continued. INTRODUCTION The uncontrolled oil discharge near Platform 402A in federal waters off Santa Barbara during January and February, 1969, gave ample proof of the adverse effects of such threats to the environment on public opinion, even though studies of this discharge and several large tanker spills have definitely established the fact that such discharges of oil have yet to alter the ecology of the aquatic environment. The Department of the Interior immediately halted drilling operations on all wells on federal leases in the Santa Barbara Channel; but after a departmental review of the proposed programs, most of the operators were permitted to resume operations. Several days later, the Secretary of the Interior imposed a drilling ban until regulations could be reviewed and strengthened as needed. An exception to this ban was the remedial program being conducted on the Union Oil Company of California lease. As an aftermath of the Santa Barbara incident, on February 27, 1969, the State Resources Agency requested the departments concerned to critically assess current State of California offshore oil and gas regulations and inspection practices as they related to public safety and the environment. A State Ad Hoc Committee was designated to review state regulations and inspection practices on offshore oil and gas operations, and to develop recommendations "felt to be necessary and which are desirable with relation to both safety and esthetics. This study was soon expanded to include a review of the onshore, or upland areas.