Construction of contingency estimation method for overseas oil and gas acquisition evaluation based on risk quantification

Rong Chen; Zeping Hu; Ya Qian Liu; Cheng Gao Yi; Yuan Yuan He; Wan Ting Li

doi:10.1117/12.2689502

7 September 2023 Construction of contingency estimation method for overseas oil and gas acquisition evaluation based on risk quantification

Rong Chen, Zeping Hu, Ya Qian Liu, Cheng Gao Yi, Yuan Yuan He, Wan Ting Li

Author Affiliations +

Proceedings Volume 12790, Eighth International Conference on Electromechanical Control Technology and Transportation (ICECTT 2023); 127901J (2023) https://doi.org/10.1117/12.2689502
Event: 8th International Conference on Electromechanical Control Technology and Transportation (ICECTT 2023), 2023, Hangzhou, China

Abstract

In the acquisition and evaluation stage of overseas oil and gas projects, the uncertain risk factors of surface engineering investment estimation are very different from those in the project design and construction stage. There are political, economic, social, security, and other macro risks, the project’s construction conditions, and other uncertain risk factors. The risk factors are complex and changeable, difficult to quantify, and the estimation of contingency is more difficult. At present, the contingency mainly adopts the rate method, which is based on the experience of previous similar projects. It is simple and practical, but it fails to quantify various risks and cannot fully reflect the impact of various risk factors on the final investment result of the project. Based on the historical evaluation projects, this paper analyzes and determines the risk factors affecting investment in the acquisition and evaluation stage of overseas oil and gas projects, determines the degree of influence of risk factors on the investment, determines the probability distribution function of the corresponding cost of each risk factor, and gives the contingency estimation results through Monte Carlo algorithm simulation. This paper discusses a method to solve the traditional method of determining the contingency rate mainly by subjective judgment, and quantifies the value of contingency by probability method, to improve the accuracy of the project tender offer and reduce the investment risk after the project acquisition.

Citation Download Citation

Rong Chen, Zeping Hu, Ya Qian Liu, Cheng Gao Yi, Yuan Yuan He, and Wan Ting Li "Construction of contingency estimation method for overseas oil and gas acquisition evaluation based on risk quantification", Proc. SPIE 12790, Eighth International Conference on Electromechanical Control Technology and Transportation (ICECTT 2023), 127901J (7 September 2023); https://doi.org/10.1117/12.2689502

ACCESS THE FULL ARTICLE

INSTITUTIONAL
Select your institution to access the SPIE Digital Library.

SELECT YOUR INSTITUTION

PERSONAL
Sign in with your SPIE account to access your personal subscriptions or to use specific features such as save to my library, sign up for alerts, save searches, etc.

PERSONAL SIGN IN

No SPIE Account? Create one

PURCHASE THIS CONTENT

SUBSCRIBE TO DIGITAL LIBRARY

50 downloads per 1-year subscription

Members: $195

Non-members: $335 ADD TO CART

25 downloads per 1 - year subscription

Members: $145

Non-members: $250 ADD TO CART

PURCHASE SINGLE ARTICLE

Includes PDF, HTML & Video, when available

Members: $17.00

Non-members: $21.00 ADD TO CART

PROCEEDINGS
6 PAGES

DOWNLOAD PAPER SAVE TO MY LIBRARY

GET CITATION

RIGHTS & PERMISSIONS

Get copyright permission Get copyright permission on Copyright Marketplace

KEYWORDS

Engineering

Monte Carlo methods

Data acquisition

Design and modelling

Reflection

Civil engineering

Environmental sensing

Show All Keywords

Keywords/Phrases

Search In:

Publication Years