Chasing Reserves - Incentives and Ownership

USAEE (U.S. Association of Energy Economics) WP 09-025

23 Pages Posted: 6 Dec 2009

See all articles by Petter Osmundsen

Petter Osmundsen

University of Stavanger; CESifo (Center for Economic Studies and Ifo Institute)

Date Written: December 2, 2009

Abstract

The oil companies are concerned to replace the petroleum reserves they produce in order to maintain their future level of activity. Booked reserves also represent an important input when analysts value these companies. Many producer countries want to control their own resources, a goal which can come into conflict with the desire of the international companies for booked reserves. Where oil companies do not own the reserves, they may have insufficient incentives to maximise value – harmonising goals between resource country and oil company can be difficult. This article discusses the relationship between reserves and financial incentives, and between reserves and valuation. The issues are illustrated throughout with reference to two cases: StatoilHydro’s projects on Shtokman in Russia and Peregrino in Brazil.

Suggested Citation

Osmundsen, Petter, Chasing Reserves - Incentives and Ownership (December 2, 2009). USAEE (U.S. Association of Energy Economics) WP 09-025, Available at SSRN: https://ssrn.com/abstract=1517154 or http://dx.doi.org/10.2139/ssrn.1517154

Petter Osmundsen (Contact Author)

University of Stavanger ( email )

4036 Stavanger
Norway

CESifo (Center for Economic Studies and Ifo Institute) ( email )

Poschinger Str. 5
Munich, DE-81679
Germany

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
70
Abstract Views
517
Rank
594,428
PlumX Metrics