Valuing Barrels of Oil Equivalent

B-Tier
Journal: The Energy Journal
Year: 2015
Volume: 36
Issue: 1_suppl
Pages: 179-194

Score contribution per author:

2.011 = (α=2.01 / 1 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

By convention, the petroleum industry relies on thermal equivalence to summarize the results of upstream oil and gas operations—measuring outputs in terms of barrels of “oil equivalent.” This despite the fact that the two commodities trade at nothing like thermal parity. Drawing on a well-known exponential production model of petroleum reserves, we demonstrate the potential for thermal equivalence to substantially distort common measures of exploration and development success. Drawing on a recent survey of actual upstream results, and relative to a proposed measure based on economic equivalence, we show that the extent of bias in estimates of value, cost, and profitability is indeed large.

Technical Details

RePEc Handle
repec:sae:enejou:v:36:y:2015:i:1_suppl:p:179-194
Journal Field
Energy
Author Count
1
Added to Database
2026-01-29