The petroleum business, especially exploration is characterized by its extremely high risk nature. Firstly in this review, the key concepts and terms such as return, risk and uncertainty are clearly defined. Then, the existing risk evaluation methods are critically reviewed in terms of their strength and weakness in relation to their application to petroleum business.
The existing risk evaluation methods are not exactly adequate for the petroleum business. To cope with their problems, the new risk evaluation method, “RACE” (Risk Adjusted Certain Equivalent) is introduced. It effectually represents the subjective judgment of risk aversion in petroleum business, and may also be applicable to the evaluation of the “Knight's uncertainty”. It is also practically useful in evaluating and establishing petroleum exploration strategy.
Carbon Dioxide Capture and Storage (CCS) is a key technology to reduce carbon dioxide emission to the atmosphere and needed to be widely deployed in the world as early as possible. The G8 leaders declared at the Hokkaido Toyako Summit in 2008 to “strongly support the launching of 20 large-scale CCS demonstration projects globally by 2010, with a view to beginning broad deployment of CCS by 2020.” The Japanese Government accelerated development of CCS since around the summit and Japan CCS Co., Ltd. was established just before the summit. The company has been carrying out comprehensive investigations for large scale demonstrations in Japan. Similar to the petroleum exploration and production (E & P), CCS deals with the invisible nature of deep underground. Therefore, expertise and technologies acquired and developed in the petroleum E & P will play an important role in CCS to assure safe and effective operations.
Five onshore oil fields are producing in south east Papua New Guinea. The surface operations in the fields are quite hard and tough due to steep mountainous terrain and insufficient infrastructure. Serious problems have been encountered in drilling operation while drilling through Karst limestone over the surface and volcanic rocks formation. In addition, a complexity of the structure and compartmentalized reservoirs, which have been caused by strong tectonic movement and stress make an effective reservoir management more complex and difficult. Typical examples of the operations under such difficult circumstances are introduced and after that a status of commercialization of associated gas is briefly discussed.