Pub Date : 2005-06-01DOI: 10.1111/j.1753-0237.2008.00145.x
Sadek Boussena, Catherine Locatelli
This article focuses on the volatility of crude oil futures prices on the New York Mercantile Exchange. It aims at examining whether this market creates excess volatility, which would not be observed in the absence of such a market. In order to reach this objective, price fluctuations are separated into two components: an information component that reflects a rational assessment of the information arrival, and an error component that represents the noise introduced by the trading process. We show that a significant part of the volatility recorded during exchange trading hours is caused by mispricing errors. In particular, this phenomenon affects the nearest futures contract.
{"title":"Towards a More Coherent Oil Policy in Russia?","authors":"Sadek Boussena, Catherine Locatelli","doi":"10.1111/j.1753-0237.2008.00145.x","DOIUrl":"https://doi.org/10.1111/j.1753-0237.2008.00145.x","url":null,"abstract":"This article focuses on the volatility of crude oil futures prices on the New York Mercantile Exchange. It aims at examining whether this market creates excess volatility, which would not be observed in the absence of such a market. In order to reach this objective, price fluctuations are separated into two components: an information component that reflects a rational assessment of the information arrival, and an error component that represents the noise introduced by the trading process. We show that a significant part of the volatility recorded during exchange trading hours is caused by mispricing errors. In particular, this phenomenon affects the nearest futures contract.","PeriodicalId":103205,"journal":{"name":"Wiley-Blackwell: OPEC Energy Review","volume":"25 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2005-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124903252","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2005-03-01DOI: 10.1111/J.0277-0180.2005.00143.X
D. Reynolds
Canada has chosen to define its 174 billion barrels of oil sand bitumen reserves as crude oil deposits, putting the country on a par with Saudi Arabia in potential oil production. However, the physical and economic definition of calling oil sand bitumen crude oil needs to be questioned. On the face of it, these definitions make Canada look as powerful as OPEC's leading producer, or Russia, on the world oil market. However, a fuller analysis shows that Canadian oil sand is quite different from crude oil and that Canada will have little if any effect on the global oil market, or on OPEC.
{"title":"The Economics of Oil Definitions: The Case of Canada's Oil Sands","authors":"D. Reynolds","doi":"10.1111/J.0277-0180.2005.00143.X","DOIUrl":"https://doi.org/10.1111/J.0277-0180.2005.00143.X","url":null,"abstract":"Canada has chosen to define its 174 billion barrels of oil sand bitumen reserves as crude oil deposits, putting the country on a par with Saudi Arabia in potential oil production. However, the physical and economic definition of calling oil sand bitumen crude oil needs to be questioned. On the face of it, these definitions make Canada look as powerful as OPEC's leading producer, or Russia, on the world oil market. However, a fuller analysis shows that Canadian oil sand is quite different from crude oil and that Canada will have little if any effect on the global oil market, or on OPEC.","PeriodicalId":103205,"journal":{"name":"Wiley-Blackwell: OPEC Energy Review","volume":"9 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2005-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"117074144","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2004-12-01DOI: 10.1111/J.0277-0180.2004.00137.X
O. Omole, T. A. Borisade, Ahmad Muhammad
Despite the risks and uncertainties associated with investment in the petroleum industry, Nigeria remains attractive to foreign investors, due (partly) to the high rate of return on investment, the presence of a prodigious hydrocarbon base and the existence of a reliable legal framework for the protection of such investment. This study attempts to identify the key elements of risks and uncertainties in the Nigerian oil and gas industry and their associated impacts on the economic performance of capital projects, using data obtained from experts in the industry. The study reveals that the reservoir area, the hydrocarbon formation thickness, the porosity, the production drive mechanism and, hence, the recovery factor are the most significant uncertainty factors in oil exploitation. The major economic uncertainties identified include the crude oil price and joint venture cash calls (the latter is currently on the decline, due to the improved Government commitment to its cash call obligations).
{"title":"Risk Impacts on the Economic Performance of Oil and Gas Projects in Nigeria","authors":"O. Omole, T. A. Borisade, Ahmad Muhammad","doi":"10.1111/J.0277-0180.2004.00137.X","DOIUrl":"https://doi.org/10.1111/J.0277-0180.2004.00137.X","url":null,"abstract":"Despite the risks and uncertainties associated with investment in the petroleum industry, Nigeria remains attractive to foreign investors, due (partly) to the high rate of return on investment, the presence of a prodigious hydrocarbon base and the existence of a reliable legal framework for the protection of such investment. This study attempts to identify the key elements of risks and uncertainties in the Nigerian oil and gas industry and their associated impacts on the economic performance of capital projects, using data obtained from experts in the industry. The study reveals that the reservoir area, the hydrocarbon formation thickness, the porosity, the production drive mechanism and, hence, the recovery factor are the most significant uncertainty factors in oil exploitation. The major economic uncertainties identified include the crude oil price and joint venture cash calls (the latter is currently on the decline, due to the improved Government commitment to its cash call obligations).","PeriodicalId":103205,"journal":{"name":"Wiley-Blackwell: OPEC Energy Review","volume":"20 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2004-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125954148","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2004-12-01DOI: 10.1111/J.0277-0180.2004.00138.X
A. Al-Attar
Since 1993, Kuwait's legislative bodies have been looking closely at the prospect of opening-up the country's upstream oil sector for development and production to international oil companies (IOCs). The country has proposed doing this by means of a mechanism called an "operating service agreement" (OSA). This has generated controversy. One side argues that opening-up the oil sector embodies a pattern of denationalisation and is reminiscent of the country's former concession agreement of 1934. And the other side maintains that the proposed OSA is unquestionably different to the concession agreement, in terms of legal framework, fiscal system and the role of the state. This paper reviews and compares the two types of agreement. Copyright 2004 Organization of the Petroleum Exporting Countries.
{"title":"A Review of Upstream Development Policies in Kuwait","authors":"A. Al-Attar","doi":"10.1111/J.0277-0180.2004.00138.X","DOIUrl":"https://doi.org/10.1111/J.0277-0180.2004.00138.X","url":null,"abstract":"Since 1993, Kuwait's legislative bodies have been looking closely at the prospect of opening-up the country's upstream oil sector for development and production to international oil companies (IOCs). The country has proposed doing this by means of a mechanism called an \"operating service agreement\" (OSA). This has generated controversy. One side argues that opening-up the oil sector embodies a pattern of denationalisation and is reminiscent of the country's former concession agreement of 1934. And the other side maintains that the proposed OSA is unquestionably different to the concession agreement, in terms of legal framework, fiscal system and the role of the state. This paper reviews and compares the two types of agreement. Copyright 2004 Organization of the Petroleum Exporting Countries.","PeriodicalId":103205,"journal":{"name":"Wiley-Blackwell: OPEC Energy Review","volume":"49 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2004-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133007290","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2004-12-01DOI: 10.1111/J.0277-0180.2004.00139.X
Opec Secretariat
This article looks at the difficulties experienced by the international oil market in 2004, in the context of the heavy pressure that has been put on stability and prices by downstream refinery problems, even though the market has remained well-supplied with crude. It notes the efforts OPEC has made to maintain a reasonable market balance, in particular by accelerating the implementation of production expansion plans to increase the excess supply cushion. But it seems that, along with a tight market for light sweet crude oil, problems in the downstream sector will remain major upside risks for the market in 2005, risks that require urgent attention.
{"title":"The Impact of Downstream Refinery Concerns on the International Oil Market","authors":"Opec Secretariat","doi":"10.1111/J.0277-0180.2004.00139.X","DOIUrl":"https://doi.org/10.1111/J.0277-0180.2004.00139.X","url":null,"abstract":"This article looks at the difficulties experienced by the international oil market in 2004, in the context of the heavy pressure that has been put on stability and prices by downstream refinery problems, even though the market has remained well-supplied with crude. It notes the efforts OPEC has made to maintain a reasonable market balance, in particular by accelerating the implementation of production expansion plans to increase the excess supply cushion. But it seems that, along with a tight market for light sweet crude oil, problems in the downstream sector will remain major upside risks for the market in 2005, risks that require urgent attention.","PeriodicalId":103205,"journal":{"name":"Wiley-Blackwell: OPEC Energy Review","volume":"76 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2004-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133916012","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2004-09-01DOI: 10.1111/J.0277-0180.2004.00134.X
M. Mazraati, S. Jazayeri
The purpose of this technical exercise is to apply econometric modelling to study the relationship between movements in the oil price and compliance by the Organization of the Petroleum Exporting Countries (OPEC) with its self-assigned production agreements, whose purpose is to bring order and stability to the international oil market. Copyright 2004 Organization of the Petroleum Exporting Countries.
{"title":"Oil Price Movements and Production Agreements","authors":"M. Mazraati, S. Jazayeri","doi":"10.1111/J.0277-0180.2004.00134.X","DOIUrl":"https://doi.org/10.1111/J.0277-0180.2004.00134.X","url":null,"abstract":"The purpose of this technical exercise is to apply econometric modelling to study the relationship between movements in the oil price and compliance by the Organization of the Petroleum Exporting Countries (OPEC) with its self-assigned production agreements, whose purpose is to bring order and stability to the international oil market. Copyright 2004 Organization of the Petroleum Exporting Countries.","PeriodicalId":103205,"journal":{"name":"Wiley-Blackwell: OPEC Energy Review","volume":"67 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2004-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126299476","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2004-06-01DOI: 10.1111/J.0277-0180.2004.00132.X
Opec Secretariat
Before and during the United States' summer driving season, concern over the country's gasoline supply can potentially influence the direction of the petroleum market. There are three causes of concern: a persistent lack of gasoline-producing capacity; a patchwork of as many as 18 different kinds of gasoline specifications; and the introduction of stringent new specifications for reformulated gasoline. However, gasoline stocks should be able to meet the needs of this year's driving season, at a time of ample crude oil availability, with strong imports. But, unplanned outages in the US logistics system and refining centres, or major disruptions in external gasoline supplies, could trigger price spikes that would, in turn, lead to frequently stronger crude oil prices, especially with the observed robust oil demand growth in China.
{"title":"The Us Gasoline Situation and Crude Oil Prices","authors":"Opec Secretariat","doi":"10.1111/J.0277-0180.2004.00132.X","DOIUrl":"https://doi.org/10.1111/J.0277-0180.2004.00132.X","url":null,"abstract":"Before and during the United States' summer driving season, concern over the country's gasoline supply can potentially influence the direction of the petroleum market. There are three causes of concern: a persistent lack of gasoline-producing capacity; a patchwork of as many as 18 different kinds of gasoline specifications; and the introduction of stringent new specifications for reformulated gasoline. However, gasoline stocks should be able to meet the needs of this year's driving season, at a time of ample crude oil availability, with strong imports. But, unplanned outages in the US logistics system and refining centres, or major disruptions in external gasoline supplies, could trigger price spikes that would, in turn, lead to frequently stronger crude oil prices, especially with the observed robust oil demand growth in China.","PeriodicalId":103205,"journal":{"name":"Wiley-Blackwell: OPEC Energy Review","volume":"115 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2004-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131183512","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2004-06-01DOI: 10.1111/J.0277-0180.2004.00130.X
A. Jalali-Naini, M. Asali
Oil prices behave differently over different time-horizons. For the short run, we examine the pattern of movements in crude oil prices over business cycles and test whether price increases influence global output and/or are influenced by economic cycles. For the long run, we focus on whether "shocks" to crude oil prices are persistent or not. Our findings indicate that the price of crude oil exhibits substantial cyclical behaviour, as verified by several tests carried out in this paper. The VAR analysis indicates that the price of oil is a pro-cyclical variable. Moreover, the results show that, while, during the 1972-2003 period (when OPEC exerted more influence in the oil market), the oil market experienced substantial fluctuations in price, the price cycles were mean-reverting and not shock-persistent. This could indicate that OPEC market power can have stabilising effects. Copyright 2004 Organization of the Petroleum Exporting Countries.
{"title":"Cyclical Behaviour and Shock-Persistence: Crude Oil Prices","authors":"A. Jalali-Naini, M. Asali","doi":"10.1111/J.0277-0180.2004.00130.X","DOIUrl":"https://doi.org/10.1111/J.0277-0180.2004.00130.X","url":null,"abstract":"Oil prices behave differently over different time-horizons. For the short run, we examine the pattern of movements in crude oil prices over business cycles and test whether price increases influence global output and/or are influenced by economic cycles. For the long run, we focus on whether \"shocks\" to crude oil prices are persistent or not. Our findings indicate that the price of crude oil exhibits substantial cyclical behaviour, as verified by several tests carried out in this paper. The VAR analysis indicates that the price of oil is a pro-cyclical variable. Moreover, the results show that, while, during the 1972-2003 period (when OPEC exerted more influence in the oil market), the oil market experienced substantial fluctuations in price, the price cycles were mean-reverting and not shock-persistent. This could indicate that OPEC market power can have stabilising effects. Copyright 2004 Organization of the Petroleum Exporting Countries.","PeriodicalId":103205,"journal":{"name":"Wiley-Blackwell: OPEC Energy Review","volume":"21 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2004-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121554164","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2004-03-01DOI: 10.1111/J.0277-0180.2004.00078.X
F. Banks
Both the teaching and the studying of energy economics have been severely disadvantaged by the emphasis placed on the Hotelling theory of resource exhaustion. For example, in the study of oil and gas economics, this unrealistic construction is fundamentally irrelevant, because it does not consider fixed investment, nor the (real) options associated with such things as starting or interrupting production. In addition, both economics students and teachers have failed to recognize the crucial importance of the reserves-to production ratio, as well as the research of M. King Hubbert. Among other things, this oversight has led to an irrational optimism, where expectations of the future availability of oil are concerned. To be more specific, the probability that the oil pessimists are correct is large enough to justify the attachment of a sizable discount factor to any claim of future oil abundance.
{"title":"Beautiful and Not so Beautiful Minds: An Introductory Essay on Economic Theory and the Supply of Oil","authors":"F. Banks","doi":"10.1111/J.0277-0180.2004.00078.X","DOIUrl":"https://doi.org/10.1111/J.0277-0180.2004.00078.X","url":null,"abstract":"Both the teaching and the studying of energy economics have been severely disadvantaged by the emphasis placed on the Hotelling theory of resource exhaustion. For example, in the study of oil and gas economics, this unrealistic construction is fundamentally irrelevant, because it does not consider fixed investment, nor the (real) options associated with such things as starting or interrupting production. In addition, both economics students and teachers have failed to recognize the crucial importance of the reserves-to production ratio, as well as the research of M. King Hubbert. Among other things, this oversight has led to an irrational optimism, where expectations of the future availability of oil are concerned. To be more specific, the probability that the oil pessimists are correct is large enough to justify the attachment of a sizable discount factor to any claim of future oil abundance.","PeriodicalId":103205,"journal":{"name":"Wiley-Blackwell: OPEC Energy Review","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2004-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128226771","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2004-03-01DOI: 10.1111/J.0277-0180.2004.00079.X
S. Bhattacharyya, Dang Ngoc Quoc Thang
Vietnam produces about 15 million tons (mt) of sugarcane per year and about 5 mt of bagasse. There is the potential for cogeneration using bagasse, which can also help overcome power shortages in the country. This paper analyses the potential for cogeneration from the sugar industry in Vietnam under three different scenarios and finds that between 100 to 300 megawatts of power-generating capacity could be supported by the bagasse generated from sugar mills, depending on the technology considered for sugar mills and cogeneration and the possibility of renovation of the existing mills. The paper also assesses the expense of cogeneration and finds it to be a cost effective option for all types of sugar mills. It is found that the cost savings from cogeneration would more than offset the cost of introducing cogeneration in sugar mills with inefficient cane processing technologies. Sugar mills with modern technologies would have a significant amount of excess power and most of these plants would break-even if they sell excess power at around 4.5 cents/kWh. The break-even cost and the average production cost are sensitive to the investment cost assumptions. The paper thus suggests that cogeneration from sugar industry is an attractive option for the investors for existing mills or new sugar mills alike.
{"title":"The Cogeneration Potential of the Sugar Industry in Vietnam","authors":"S. Bhattacharyya, Dang Ngoc Quoc Thang","doi":"10.1111/J.0277-0180.2004.00079.X","DOIUrl":"https://doi.org/10.1111/J.0277-0180.2004.00079.X","url":null,"abstract":"Vietnam produces about 15 million tons (mt) of sugarcane per year and about 5 mt of bagasse. There is the potential for cogeneration using bagasse, which can also help overcome power shortages in the country. This paper analyses the potential for cogeneration from the sugar industry in Vietnam under three different scenarios and finds that between 100 to 300 megawatts of power-generating capacity could be supported by the bagasse generated from sugar mills, depending on the technology considered for sugar mills and cogeneration and the possibility of renovation of the existing mills. The paper also assesses the expense of cogeneration and finds it to be a cost effective option for all types of sugar mills. It is found that the cost savings from cogeneration would more than offset the cost of introducing cogeneration in sugar mills with inefficient cane processing technologies. Sugar mills with modern technologies would have a significant amount of excess power and most of these plants would break-even if they sell excess power at around 4.5 cents/kWh. The break-even cost and the average production cost are sensitive to the investment cost assumptions. The paper thus suggests that cogeneration from sugar industry is an attractive option for the investors for existing mills or new sugar mills alike.","PeriodicalId":103205,"journal":{"name":"Wiley-Blackwell: OPEC Energy Review","volume":"14 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2004-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131788987","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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