Industry size and 'destruction competition' in Cournot oligopoly models of exhaustible resource exploration and extraction

Article Abstract:

A study shows that exploration can be a pseudo natural barrier to entry that results in the oil and gas industry's high degree of concentration. It is proven that requiring all firms to perform non-negative levels of exploration limits the number of firms in exhaustible resource industries which in turn limits its degree of competition. It is also shown that oligopolists relative to the competitive case over-explore and over-extract in the first period, and that increasing the industry's number of firms decreases the exploration and extraction levels of an oligopolist but increases that of the industry.

Discovery and exploration, Corporate size

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Modeling and forecasting the supply of oil and gas: a survey of existing approaches

Article Abstract:

The individual strengths and weaknesses of existing oil and gas supply models are studied, including geologic/engineering and econometric models. A special hybrid of the two types is also analyzed. Various dynamic and external factors of each supply process are focused on, such as dynamic optimization, price and cost forecasting, physical qualities and overall performance. Specific areas for future research in this topic are also suggested, with the recommendation that hybrid models must obtain its econometric component from a stochastic dynamic optimization model of exploration behavior.

Gasoline supply

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Optimal extraction of petroleum resources: an empirical approach

Article Abstract:

Petroleum reservoir behavior is analyzed by having a dynamic optimization model calculate the profit-maximizing extraction rates for oil and natural gas production, using various pressures as control variables. The impact of discount rates, state and corporate income taxes and depletion allowance on revenues of both a firm and its government is examined. This optimal control model is practical enough to make it applicable to joint production planning of exhaustible resources, although its accuracy remains limited.

Petroleum engineering

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