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Title: Essays on North Sea oil and gas economics : offshore safety economics and third party access to infrastructure in the upstream oil and gas industry
Author: Acheampong, Theophilus
ISNI:       0000 0004 6349 2815
Awarding Body: University of Aberdeen
Current Institution: University of Aberdeen
Date of Award: 2017
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This thesis explores two themes on upstream oil and gas economics centred on offshore safety economics and third party access to infrastructure in the United Kingdom Continental Shelf (UKCS). The first part involves work that explores the nexus between the offshore safety regime and safety outcomes. It contributes to the literature by explaining the post-Piper Alpha safety regime changes with regard to our understanding, framing of safety decision making and benchmarking of safety outcomes. The second part investigates third party access to infrastructure issues in the UKCS. It contributes to our understanding of how different third party access to infrastructure arrangements can be utilised to maximise economic recovery. Each chapter addresses fundamental issues of North Sea oil and gas operations through the application of microeconomic, operations research and econometric methods within a formal analytical framework. The results provide insights into decision-making complexities in the upstream oil and gas industry by guiding policy makers. Specifically, part one of this thesis looks at safety performance in the post-Piper Alpha era in the UKCS. It investigates ways through which a more comprehensive and theoretically informed framework can be used to understand the linkages that arise when dealing with safety regulations and their impacts on the offshore oil and gas industry. Our objective is to empirically ascertain the determinants of offshore hydrocarbon releases within the context of the post-Piper Alpha offshore safety regime regulations. This is done using an observed number of hydrocarbon releases linked to a population denominator data of the number of the installations present in the UKCS. Three research problems are examined: (1) the transmission mechanisms through which safety regulation influence firm and industry productivity; (2) the assessment methods utilised in measuring and benchmarking regulatory outcomes in terms of safety compliance; and (3) the extent to which safety policies contribute to enhancing safety levels in the oil and gas industry. We initially review the background and literature on offshore safety with a particular emphasis on the UKCS in Chapter 2. We also frame our research questions and underlying hypothesis here. In Chapter 3, we present our underlying empirical framework and model specifications followed by some descriptive analysis of the hydrocarbon releases data. The results of the various econometric model specifications are analysed in Chapter 4. The second part of the thesis explores how possible different ownership patterns (including access arrangements) might affect the economic viability of exploiting remaining resources in the UKCS. This section attempts to answer two critical questions namely how the impact of the separation of infrastructure and field ownership affect economic recovery and the impact of taxation on field and hub economics in a mature oil basin. We explore how possible different ownership structures and access arrangements might affect the economic viability of remaining UKCS reserves. We apply a mixed integer programming (MIP) model to field data from the Northern North Sea. Specifically, we examine how the unbundling of infrastructure and field ownership, as well as different cost sharing and tariff arrangements, affect the long-term economics of hubs and their user fields. Regarding the layout, Chapter 5 talks about access to infrastructure issues in the UKCS namely the regulatory framework for access and related legislation. It leads to the development of a conceptual framework and model based upon which extractions are made to capture the various potential market outcomes. In Chapter 6, the empirical model, which utilises the mixed integer programming approach, is discussed. The data sources and characterization, as well as the presentation of the results from the Baseline Model, are presented in Chapter 7. The analysis of the Tax Model and the Cost Sharing plus Tax Model including structure and simulated results with underlying assumptions are presented in Chapter 8. Finally, Chapter 9 leads to a thorough discussion of the results followed by conclusions and policy recommendations.
Supervisor: Not available Sponsor: University of Aberdeen
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID:  DOI: Not available
Keywords: Offshore gas industry ; Offshore oil industry ; Offshore gas well drilling ; Offshore oil well drilling