This paper studies how drilling costs are affected by the business cycle. We decompose the major elements in these costs – rig rates and drilling speed – and examine how they interact with variations in oil prices. A highly relevant consideration in the current circumstances is whether oil...

We examine drivers of cost overruns in Norwegian development projects in the oil and gas sector. The multivariate longitudinal econometric analysis employs a unique and detailed dataset consisting of 80 different projects between 2000 and 2015. Among the significant results, we find that the...

In this paper we analyse rig rate formation of floaters operating on the Norwegian Continental Shelf. We first develop a simple bargaining model for rig markets. Then we examine empirically the most important drivers for rig rate formation in the period 1991q4 to 2013q4. We use reduced form time...

We investigate the potential for statistical forecasting of aggregate oil and gas investment on the Norwegian Continental Shelf (NCS). A unique and detailed dataset containing data from 109 different fields on the NCS between 1970 and 2015 was employed. A set of 1080 autoregressive distributed...

Socio-economic criteria for climate projects have been used in analysing the value of the climate benefit of a reduction in CO2. These reports are optimistic, yet CCS demonstration plants are not implemented as expected. Little attention has been devoted to profitability assessments based on...

Drilling expenses has increased sharply in recent years. The productivity of drilling operations - in terms of meters drilled per day - significantly influences exploration costs. Hence it is important to understand the factors that determine drilling productivity. In this study we analyze the...

Development projects in the oil industry often have cost overruns. Through analysis of data from Norwegian development projects in the petroleum industry, this paper investigates the common effect of business cycle developments on cost overruns. Lack of capacity and expertise in a tight supplier...

The recent fall in oil prices has led to extensive capital rationing, and thereby given rise to a renewed focus on parameters for project selection which supplement net present value. While the financial crisis was creating capital constraints, the oil industry seemed to be paying great...

The recent dramatic fall in oil prices has led to extensive capital rationing in international oil companies, and subsequent fierce competition between resource extraction countries to attract scarce investment. This situation is not adequately addressed by the large literature on international...

The oil and gas sector plays a crucial role in the Norwegian economy. It accounts for a very large proportion of gross domestic product, government revenues, investment and exports. A sharp fall in oil prices has had a significant impact on the economy and focused great attention on the cost...