1. Intro Flashcards
What are constraining factors in resource projects
- Economic commodity demand, commodity price, extraction cost
- Society commodity need, impact on local population, political context
- Environment access, potential for pollution(immediate + long term)
Who are the stakeholders?
- Governments (own resources, regulate, tax activity and production)
- Population ( can benefit from the resource extration directly and indirectly, can be negatively impacted by pollution and corruption)
- Publically owned companies (shares are held privately and cannpn be openly traded) - many companies are public-private hybrids
- National (oil) companies (owned by the state to benefit the nation)
- Service companies (provide services only, no investment in E&P actvity and take no risk)
- Investors (People or institutions who are prepared for a level of risk)
What are the 3 types of resource companies? give expamples
National Oil Company
- owned by the government
- e.g. Saudi ARAMCO, KOC, NIOC, PDO
International company (‘majors’
- owned by shareholders and operate internationally, often in partnership with NOCs
- e.g. SHell, BP, AngloAmerican, Rio Tinto
Independent company, junior mining company
- Small, private of public companies. May focus solely on exploration, resource developement or production. May not pay dividends
- e.g. Nexus Gold (Canada)
Who owns the world’s oil?
- 88% owned by nation states
- '’Free market’’ companies have acces to 16%
- 6% held by new Russiam companies (‘‘quasi-free)
- Even the world’s largest public oil company, Exxon< has access to <1% of the world’s oil
- The idea that Western oil compamies have a ‘‘monopoly’’ is nonsense
What are reporting requirements
What is an environmental impact assessment (EIA)?
- actively identify and mitigate any impacts on envirinment from operations
- Done/required for each major step in project (e.g. seismic survey, construction of surface facilities)
- Usually required for investment
- Good business practice
What is a mining charter?
Creates a regulatory and policy environment to enhance investment, while delivering socio-economic impact
e.g. mine ownership and mining rights
Reporting requirements
employment equity
skills development
local empowerment and community development
How does bidding for licensing work?
- Exploration acreage is usually offered in bid rounds
- Drivers: lack of local expertise or funds, unattractive for NOC, local investment
- Companies support bids with regional knowlende and studies : New Ventures
- After successful bid companies enter either a licnece agreement (tax and royal) or a Contract agreement ( often production sharing agreement - PSA)
What are the stages of a resource project?
Exploration
Discovery
Appraisal
Development
Production
Abandonment
What is the aim of the exploration stage?
What are the three types of exploration?
Aim: Identify suitable licence areas and locate a commodity deposit within the licence area
- frontier or greenfield exploration: new area, work from conceptual models, high uncertainty and risk
- basin or province exporation: known area, some data and production but untested prospects; infrastructure may be in place
- near-field or brownfield exploration: near existing deposits, reduced uncertainty due to availability of some data and infrastructure
Descibe the start of the exploration stage
- Regional geology
- Define areas, mineral and petroleum systems
Collect data
- Government data packs
- Farm-in
- Consultant reports/ Scout data
- Publications
- In-house data ( when they have been to the block before
- maps of mineral and petroleum systems, risk maps
- Assess Value/ Risk
- Bid on BLock, Farm-In, Negotiate
Describe the exploration stage after the licence has been aquired
Assess data provided with licence, aquire more
- Reprocess seismic if available
- Gravity, magnetics
- Geochemical data (seeps, surface samples)
- Satellite data
- Structural Data
- New seismic ( regional 2D and /or 3D)
Environmental scientists involved
Descibe the 3 types of discovery
- commercial discovery is worth appraising
- Technical discovery is significant resources encountered, but not obviously economic to justify even appraisal
- fallow discovery is a discovery left undeveloped for many years
Descibe the aim of the appraisal stage
- determine grade/quality/volume and extent of deposit
- reduce uncertainty
- provide data to decision makers for next stept - assess viability
What tools/studies are involved in appraisal?
- geophysics
- drilling and core analyses
- focused geological, geochemical and petrophysical studies to descibe the deposit properties
- geological and statistical modelling
