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Oil Exploration Economics: Empirical Evidence from Indonesian Geological Basins

Author

Listed:
  • Harry Patria
  • Vid Adrison

    (EP Energy and Faculty of Economics and Business Universitas Indonesia)

Abstract

Oil exploration has been subject to economic research for decades. Earlier studies of exploration models are mostly discussed the behavior of exploration at the macro-level analysis such as field, firm, region, and continental. This paper then focuses on the geological and economic factors that determine the well-drilling decision at the micro-level using disaggregated panel data of 32 geological basins in Indonesia over the period of 2004–2013. This study shows that the number of drilled wells is determined significantly by the lag of success rate, lag of discovery size, lag of global oil price, and regional location of geological basin.

Suggested Citation

  • Harry Patria & Vid Adrison, 2015. "Oil Exploration Economics: Empirical Evidence from Indonesian Geological Basins," Economics and Finance in Indonesia, Faculty of Economics and Business, University of Indonesia, vol. 61, pages 196-213, December.
    • Handle: RePEc:lpe:efijnl:201514
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    References listed on IDEAS

    as
    1. Dahl, Carol & Duggan, Thomas E., 1998. "Survey of price elasticities from economic exploration models of US oil and gas supply," Journal of Energy Finance & Development, Elsevier, vol. 3(2), pages 129-169.
    2. Mohn, Klaus & Osmundsen, Petter, 2008. "Exploration economics in a regulated petroleum province: The case of the Norwegian Continental Shelf," Energy Economics, Elsevier, vol. 30(2), pages 303-320, March.
    3. Boyce, John R. & Nøstbakken, Linda, 2011. "Exploration and development of U.S. oil and gas fields, 1955-2002," Journal of Economic Dynamics and Control, Elsevier, vol. 35(6), pages 891-908, June.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Harry Patria, 2021. "The Role of Success Rate, Discovery, Appraisal Spending, and Transitioning Region on Exploration Drilling of Oil and Gas in Indonesia in 2004–2015," Economics and Finance in Indonesia, Faculty of Economics and Business, University of Indonesia, vol. 67, pages 183-194, Desember.

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    More about this item

    Keywords

    Drilling; Geological Variables; Economic Variables; Exploration;
    All these keywords.

    JEL classification:

    • L71 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Mining, Extraction, and Refining: Hydrocarbon Fuels
    • Q35 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Hydrocarbon Resources

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