Petrofac's Essay On BP's Role And Operations As Duty Holder.

Accountability and Responsibilities of Duty Holder

The operational team of the duty holder is accountable for making sure the maintenance, management and safety of the assets by delivering bestowed and skills that are of the highest quality and examined and implemented the mechanism and the procedures. They manage, handle and monitor the performance management and provides accurate delivery of skilled human force in collaboration with the management and conclude the activities of the assets. These activities and operations lead to the establishment of partnerships. It aids the clients to perform as a license operator and delivering the resources on time. There are various predicted obligations that can be performed by the duty holders namely the operator of the wells and the pipelines and operational services. There exist an integrated operations model under the legislation of UKCS that connects the accountabilities of the reservoir operator, pipeline operator amd the duty holder.

In this discussion, Petrofac, a renowned oil and gas processing and the service provider has been taken into consideration. The British petroleum agency has given them the role of the duty holder for helping the late life management of Miller activities in the North Sea in the sector of United Kingdom. The company is accountable for the operations for undertaking the evolution of the Miller Platform for British Petroleum that does not produce recently. The company gets the Miller Platform ready for the nest step of a constructed decommissioning and the various other offshore components. The international activities of the British Petroleum have been helped by Petrofac with the help of generating a partnership. The collaboration of Petrofac with the British Petroleum discovers a compact alignment with the driver of the project of Miller decommissioning.

Petrofac is accountable for the construction, operations and designing of the oil and gas provisions that are supplied through or by integrating the variety of new and improved commercial framework. They are accountable for changing the asset value of the British Petroleum transversely through the lifecycle of oil and gas. The operations of British Petroleum and Petrofac are lined up in the regions of exploration of the production of oil and gas. These operations help in the even movement and the construction of the next step of British Petroleum decommissioning. The asset decommissioning can be increased by influencing the available knowledge of Petrofac and its experience and association with the team of the asset management. The employees of Petrofac who are concerned with the asset have the flexibility, understanding and proper set of skills for giving out the operations that are aligned with the necessities of British Petroleum. The process of contracting and comprehensive engagement in the market by Petrofac is highly in line to the project drivers of Miller decommissioning. The scope of British Petroleum regarding the sourcing of the isolation valve on the assets of the North Sea and the maintenance of the campaign are given out by Ptrofac so that their operations are in line with the operations of British Petroleum. The compact working association among the two parties is growing because the objectives of the business of the petroleum are in line with the operations of the service givers. They uphold compact concentration on this component of supply and employing the local resources and appointing in the supply chain that is available in the local area.

Collaboration between Petrofac and British Petroleum

Petrofac being the responsible duty holder to the British Petroleum has stayed concentrated on raising the cliental asset value by increasing the value by the exploitation of innovative and varied solutions. The main focus involves the operational success and the project innovation for the duty holders. There are several nucleus regions over which British Petroleum has engaged their operations. The collaborations with the service providers has created a strong cooperation that helps to work in the oil basins more efficiently. Therefore, from the above explanation, it can be discovered that there are numerous regions where the operations and interests of both the parties are aligned and thereby can accomplish the objectives of their business.

There are various probable conflicts that are faced by the parties in the offshore podium. These conflicts are mainly related to the regulations of the environment. British Petroleum tries to abide by the regulations of the environment and therefore gave the chances of facing conflicting concern with Petrofac if their operations are not aligned with the environmental regulations maintenance. The parties who are associated with the platform discussions in the offshore for the ventures for completing the operations for their customers and the process is featured by cost of significance and irreversibility. These systems may increase the disagreement for the desire for higher rivalry and competent resource utilization.  

There are certain disagreements that arise from the settings of the profit orientation of the duty holder where they fight for achieving vast profits and thus move their focus from security to environment and individuals. It is essential that the safety should not be undermined by the service providers or the holders as the feasibility of the commodity and the service is assured by that specific component. There are chances that conflict can take place among the client and the service provider because of the concern of safety.

There is chances disagreement among the service provider and client on contribution of reward and risk of any project regarding petroleum in oil and gas companies and it is known as the elementary conflict. The cause is deducible to the information that both parties have the desire of shifting their risk to other concerned party to optimize the rewards. Trade off among the each party interest can be enhanced by creating the correct choice of the regime of fiscal.  

The problem of conflict arises due to the assurance of just service amount and even over the resource price that will be essential to make the changes in the assets. In this aspect, steady economic surroundings among the parties should be supported. Enhancing the resources effectively will aid in assuring the fees regarding the service and contribution of resources for providing fair and companionable choices. There are chances of probable interest conflict that comes out from the responsibility of client by staying in line with polices and the chances of the service provider for supervising their environmental and communal effect on the project.  

Asset decommissioning and improvements with Petrofac's help

The companies associated with oil and gas may face the challenges desertion and disagreement arising due to exploitation of manufacturing facilities and their elimination with various mechanisms utilized by the firms that may even lead to arousal of conflict.  

The problem of disagreement can be resolved by the parties with respect to the individual compulsions constructed under the present laws, which are required to be adhering by both the parties. It is essential to rectify such confects as fast as possible. The problem of conflict comes due to growing unsteadiness and feeble ascendancy of the parties. In order to restrict divergence in these circumstances, it is essential for the firms to reinforce the institutional infrastructure of the relations of oil and gas with the service providers. The collaboration among the parties should be undertaken on supportive manner. The unrestricted resource flow that would restrict divergence among the parties would need organization of non-discriminatory, translucent band satisfactory rules and mechanisms. The legal structure for directive of exercises in the gas and oil region requires to be made strong in order to circumvent these conflicts. There requires being a structure that would supply input to supervising, execution and designing of the plan among the parties. During the time of argument between numerous operations among the parties should be arbitrated and mediated. The main cause of conflict in the oil and gas industry is the nonattendance of participatory and well structured and participatory evaluation mechanism. Consequently, there requires being expansion of well structured judgment procedure of the service providers.

There have been numerous countries that have introduced the Product Sharing Agreement (PSA) government to rule the operations of oil and gas. It is seen that the main difference that widens regarding the contract of dispensation and PSA is the echelon of participation amongst the states. In the process of PSA, it is discovered that the state will be the proprietor of the entire manufacture of gas and oil and consequently will have superior authority and can have a say on the filtering, manufacture and control of oil. The oil conglomerates consequently act like the suppliers by providing monetary and technological services for the actions that are to be developed. It is because of these services that in arrival that the state splits the oil with the oil companies who purpose in the environmental sites within the state. The oil is split with respect to the quantity of capacity that has been thought upon in the agreement. The program of Product Sharing Agreement is an effective system for the development of the states and countries as they increase the profits as well as obtaining the benefit of accepting extra handling over the manufacture and organization of gas and oil. The functioning and the fiscal risks are even present among the diverse oil companies that are added advantages for the host countries and it is observed that only a scanty arbitration cost is missing if anything goes wrong during the functional actions.

Nucleus regions and operations of British Petroleum

On the opposing, it is described that the primary suppleness of the Product Sharing Agreement being the text that contains all the pertinent data and being the in one agreement is a inadequacy due to the fact that an attention or task is given on the arbitrations that occur efficiently. The host state may have less information than the oil companies, which operate as a fundamental scratch for the countries who are developing that has insufficient possessions with respect to the oil corporations that function in that country. Furthermore, despite the fact that host country will have the role of undertaking decisions, their inputs are very likely to be tedious and unskilled. The relation between the host country and the oil and gas corporations are contractual in nature, but it is seen that the Product Sharing Agreement can be regarded as damaging for the country by depending on the data that they will regularly fasten with the central government for numerous years without any changes in the taxation and guideline strategies as they extract the oil and augment their income. This commencement will assist the oil and gas corporations to estimate and uphold the equilibrium and constancy of their business operations and their communiqué.

It is observed that the major dissimilarity that is present among the concession and the PSA is the relationship that is extant among the oil and gas organizations and the state. It is observed that the state has the higher hand in the concessions agreements, but the relationship between the state and the oil and gas corporations are exposed to be equivalent when both the parties undertake the PSA. Hence, it is seen that PSA are utilized efficiently by the countries that are still embryonic as the extraction cost is lofty for these countries and thus the risks connected with them are higher as well. Consequently, it is seen that it is more level-headed to come into a PSA as the oil and gas companies will refrain from the procedure of construction if the agreement is not considered to be profitable by them. Regardless of the fact that the state can stay connected to the PSA for a vast time, it is perceived that it make more rationality to undergo such conformities if they are browbeaten as efficient apparatus for foreign investment undertakings.

It is evident that both the concession and the PSA accord have diverse pros and cons. Nevertheless, it is seen that concession agreements authorizes the state to raise control and supervision about the method of how the administration and the manufacturing of the oil and gas are carried out, PSA on the other hand have the aptitude to be lucrative and is more suitable to the wants of the developing countries. It is has a clear confirmation through the collision that occurred in Iraq after PSA have started foreign investment and consequently is a important gear for the countries who are still developing. Therefore, it is seen that without making use of foreign investments, the embryonic countries will not have the possibility go forward monetarily and inexpensively and therefore, the significance of PSA over these countries can be identified. However, it is seen that the states utilizing PSA have very partial rule overt the management and manufacturing of the oil and gas procedure and thus it can be seen that this agreement may not be always appropriate for a developed or a developing country.

Potential conflicts in the offshore industry

There are a variety of other contracts that are seen accessible in the market that is comparable to PSA. The examination of PSA has discovered that the concord has its pros and cons alike other agreements but it is required to appreciate the whether this agreement is significant according to the requirements of the country where it will be introduced. The negative feature of PSA for a convinced country may be productive for the other country. With regards to the oil and gas industries it is observed that PSA contracts are suitable and needs to be introduced as the oil companies along with the states will have similar influence and power to monitor control the management and the manufacturing of oil. Therefore, the organizations will even have the authority to check and implement transformations if required. They will have the supremacy to converse and if needed can even create innovative strategies to make the management and the production more resourceful. The state may not have the same authority to arbitrate or create a preparation that can transform the sharing ratio of the oil and therefore PSA administration should be put into practice as it will be advantageous for the oil and gas industries along with the state. 

Statement Showing IRR and NPV at different range of capital costs inflation
Particular	Year 0	Year 1	Year 2	Year 3	Year 4	Year 5	Total
Revenue		$         500.00	$    600.00	$          720.00	$        864.00	$    1,036.80
Expenses		$        (200.00)	$   (250.00)	$        (312.50)	$       (390.63)	$     (488.28)
Net cash flow	$   (1,000.00)	$         300.00	$    350.00	$          407.50	$        473.38	$       548.52
IRR							27%
Capital Cost @0%
Discounting factor		1.00	1.00	1.00	1.00	1.00
Discounted Cash flow		$         300.00	$    350.00	$          407.50	$        473.38	$       548.52	$ 2,079.39
Initial Investment							$ 1,000.00
Net Present Value							$ 1,079.39
Capital Cost @2.5%
Discounting rate		0.91	0.83	0.75	0.68	0.62
Discounted Cash flow		$         272.73	$    289.26	$          306.16	$        323.32	$       340.59	$ 1,532.05
Intital Investment							$ 1,000.00
Net Present Value							$    532.05
Caspital Cost @5%
Discounting rate		0.95	0.91	0.86	0.82	0.78
Discounted Cash flow		$         285.71	$    317.46	$          352.01	$        389.45	$       429.78	$ 1,774.41
Intital Investment							$ 1,000.00
Net Present Value							$    774.41
Capital Costs @ 7.5%
Discounting rate		0.93	0.87	0.80	0.75	0.70
discounted Cash flow		$         279.07	$    302.87	$          328.02	$        354.46	$       382.08	$ 1,646.50
Intital Investment							$ 1,000.00
Net Present Value							$    646.50
Capital costs @ 25%
Discounting rate		0.80	0.64	0.51	0.41	0.33
discounted Cash flow		$         240.00	$    224.00	$          208.64	$        193.89	$       179.74	$ 1,046.27
Intital Investment							$ 1,000.00
Net Present Value							$      46.27

The above table reveals the effect of the variable cost capital inflation on the NPV value and the IRR of the venture. In order to undertake this evaluation, the initial investment for the venture is estimated to be $1000 and the revenue has been raised to 20% and the cost has been increased by 25%. The venture IRR is 27% and the above measurement discovers the NPV at various degrees of the capital cost inflation is found to be positive.

There are various graphical and numerical simulations tools that are exploited by the different gas and oil companies that aid them to absorb knowledge with respect to the risks that are associated with the development of reservoirs. It is vital to estimate the reserves and the sources that come across the fundamentals among the oil engineers and the geoscientists. It is the function of the engineers to undertake the reserve framework effectively so that they can be exploited for the restriction of the risks that are related to the reservoir development. The reserve and the source predictions are important in their way and additionally, the predictions are done as inputs and drivers for production, cash flow models and capital expenditure. The various methods are inclusive of:

Disagreements related to regulation of environment

Volumetric Estimations

This procedure is the only standard that is obtainable to assess the hydrocarbons in the place prior to launching ample force and the developed data to relate material constancy techniques. The hydrocarbons that are obtainable are estimated from the in place and revival characteristic that is forecasted from the analogue performance set and the researches of imitation.

Therefore, it is observed that this method is really exploited to assess the hydrocarbons in place within the new wells and pools and in the fresh petroleum basins. Volumetric estimates provides a precious checking on the estimations that are revealed from the material steadiness and descend in the assessment techniques.  

Production Decline Analysis

The course of Production decline analysis is an elementary instrument utilized for approximation of production from a group of pools or from a pool when it is ample producing to the establishment of a diminishing prototype as a job of increasing time or production. The instrument is more accurate than the volumetric procedure when passable data is obtainable to start a reliable proclivity and is relevant to both gas and oil pools.

Nonetheless, production decline analysis is most appropriate to producing pools with established trends. It is often used to foresee lingering recoverable reservoirs for analysis but it is even cooperative for water flood and enhanced act oil recovery assessment and in identifying technical issues and production challenges.

Material Balance Analysis

Material balance calculations are usually made to concentrate on reservoir improvement questions but the instrument can assist with the perceptive of the reservoir geometry. Geological and Geophysical mapping gives a proposal to the orientation and shape of the pool but typically the guarantee in the in-place amount is not high apart from the seismic rule and reservoir, which is abundant. Uniformly, material balance reveals a growing contract about the ability of a reservoir but not anything about its direction and figure. The combination of the two often develops the discerning and description of the pool parameters.

The material balance procedure describes the growth of, gas, rock water and oil over a time period when the pool is erected. When liquid is removed from a basin, force of the reservoir has a propensity to reduce and the stupendous liquids increase to jam the single fissure. Injection conditions, like water flooding and gas storage are controlled by spoiling the immunization quantity known as manufacturing that is negative in nature.

Essentiality of safety in commodity and service

The rise in the demand for energy in the global economy is seen within the organization for the purpose of development and cooperation. It is due to the fact that the rise in the population and the healthy growth in the economy has increased the use of energy within the world. The consumption of energy globally has mainly been due to the infrastructural transformations simultaneously with the growth of the economy. The demand for energy has expanded at a swift rate due to the enhancement in the standard of living and the progress of a country.

There are two vital patterns that is related to the rise in the energy consumption and this consists of rise in the per capita consumption and rise in the population.

The rise in the consumption of increased energy has resulted from the transportation mechanisms and the tools and expanding ability of both foreign and domestic market for the manufacture of services and goods. The economic growth has been due to the strong demand growth of the consumption of energy. The energy demanded by the world has raised and the significant factors is seen to be the increased growth of the non-OECD in Asia. There have been certain non-OECD regions who have even witnessed a significant increase in the demand for the consumption of energy and the factor has mainly been due to the permissibility of adequate domestic supplies and the increased expansion in the population.  

The renewable energy is witnessed to be the fastest growing energy with the policies and the incentives of the government that is advertising the use of non-fossil source of energy. A significant amount of the energy of the world is given by the fossil fuels and it is seen that 78% of the global consumption of energy is taken from the natural gases, gas and liquid fuels. The other petroleum and liquid fuel has still been the largest source in spite of the reason that their actual share in the marketed energy in the world has reduced.

There are numerous sectors that would lead to annual expansion in the demand for the energy consumption and they are discussed below:

• The rise in the use of energy is due to the demand for energy and the stock from the chemical industry. The rise in the demand for energy from this area would be double to the total demand at the annual rate of growth of 1.8%.
• With relation to the electricity variety, electricity would be the winner initially due to the electrification of the companies and the real estates in the various parts of the world. The requirement to meet the expansion would be due to 80% of the capacity that is created from the wind and solar energy and the movement towards the renewable sources that are long term.
• The retail firms are forced by the economic remunerations of the consumption of the energy. However, they are worried about the rise in the price of gas and oil over their profit level.  
• There would be a transformation in the refining of oil in USA due to rising population and global warming along with the new interests towards urbanization, rise in the electric motor industry and the expansion of the high speed electronic telecommunications that are inclusive of the lush exploitation of the personal computers and the internet.

It is seen that as per the estimations that the demand for the for energy in the developing countries will gradually be overtaken with respect to the countries that are industrialized, In order to fore the countries to gain the future sustainable energy, it is essential to maintain a regulatorty institutional and economic model with the support of which the suitable investments would be upgraded with the accurate accounting for the social externalities and the environment.  

Elementary conflict related to reward and risk

Reference List and Bibliography

Adgate, John L., Bernard D. Goldstein, and Lisa M. McKenzie. "Potential public health hazards, exposures and health effects from unconventional natural gas development." Environmental science & technology 48.15 (2014): 8307-8320.

Barati, Reza, and Jenn?Tai Liang. "A review of fracturing fluid systems used for hydraulic fracturing of oil and gas wells." Journal of Applied Polymer Science 131.16 (2014).

Bedrikovetsky, Pavel. Mathematical theory of oil and gas recovery: with applications to ex-USSR oil and gas fields. Vol. 4. Springer Science & Business Media, 2013.

Birdi, K. and S., ed. Handbook of surface and colloid chemistry. CRC Press, 2015.

Brittingham, Margaret C., et al. "Ecological risks of shale oil and gas development to wildlife, aquatic resources and their habitats." Environmental Science & Technology 48.19 (2014): 11034-11047.

Caulton, Dana R., et al. "Toward a better understanding and quantification of methane emissions from shale gas development." Proceedings of the National Academy of Sciences 111.17 (2014): 6237-6242.

Davies, Richard J., et al. "Oil and gas wells and their integrity: Implications for shale and unconventional resource exploitation." Marine and Petroleum Geology 56 (2014): 239-254.

Edwards, Peter M., et al. "High winter ozone pollution from carbonyl photolysis in an oil and gas basin." Nature 514.7522 (2014): 351-354.

Finšgar, Matjaž, and Jennifer Jackson. "Application of corrosion inhibitors for steels in acidic media for the oil and gas industry: a review." Corrosion science 86 (2014): 17-41.

Harkness, Jennifer S., et al. "Iodide, bromide, and ammonium in hydraulic fracturing and oil and gas wastewaters: environmental implications." Environmental science & technology 49.3 (2015): 1955-1963.

Harriss, Robert, et al. "Using multi-scale measurements to improve methane emission estimates from oil and gas operations in the Barnett Shale region, Texas." (2015): 7524-7526.

Hickenbottom, Kerri L., et al. "Forward osmosis treatment of drilling mud and fracturing wastewater from oil and gas operations." Desalination 312 (2013): 60-66.

Ingraffea, Anthony R., et al. "Assessment and risk analysis of casing and cement impairment in oil and gas wells in Pennsylvania, 2000–2012." Proceedings of the National Academy of Sciences 111.30 (2014): 10955-10960.

Jackson, Robert B. "The integrity of oil and gas wells." Proceedings of the National Academy of Sciences 111.30 (2014): 10902-10903.

Kang, Mary, et al. "Direct measurements of methane emissions from abandoned oil and gas wells in Pennsylvania." Proceedings of the National Academy of Sciences 111.51 (2014): 18173-18177.

Kelland, Malcolm A. Production chemicals for the oil and gas industry. CRC press, 2014.

Li, Huishu, and Kenneth H. Carlson. "Distribution and origin of groundwater methane in the Wattenberg oil and gas field of northern Colorado." Environmental science & technology 48.3 (2014): 141491.

Llewellyn, Garth T., et al. "Evaluating a groundwater supply contamination incident attributed to Marcellus Shale gas development." Proceedings of the National Academy of Sciences 112.20 (2015): 6325-6330.

Lutz, Brian D., Aurana N. Lewis, and Martin W. Doyle. "Generation, transport, and disposal of wastewater associated with Marcellus Shale gas development." Water Resources Research 49.2 (2013): 647-656.

Macey, Gregg P., et al. "Air concentrations of volatile compounds near oil and gas production: a community-based exploratory study." Environmental Health 13.1 (2014): 82.

Mauter, Meagan S., et al. "Regional variation in water-related impacts of shale gas development and implications for emerging international plays." (2014): 8298-8306.

McKenzie, Lisa M., et al. "Birth outcomes and maternal residential proximity to natural gas development in rural Colorado." Environmental Health Perspectives (Online) 122.4 (2014): 412.

Murray, Kyle E. "State-scale perspective on water use and production associated with oil and gas operations, Oklahoma, US." Environmental science & technology 47.9 (2013): 4918-4925.

Perry, Simona L. "Using ethnography to monitor the community health implications of onshore unconventional oil and gas developments: examples from Pennsylvania's Marcellus Shale." New solutions: a journal of environmental and occupational health policy 23.1 (2013): 33-53.

Rahm, Brian G., et al. "Wastewater management and Marcellus Shale gas development: Trends, drivers, and planning implications." Journal of environmental management 120 (2013): 105-113.

Scanlon, Bridget R., Robert C. Reedy, and J-P. Nicot. "Comparison of water use for hydraulic fracturing for unconventional oil and gas versus conventional oil." Environmental science & technology 48.20 (2014): 12386-12393.

Schneising, Oliver, et al. "Remote sensing of fugitive methane emissions from oil and gas production in North American tight geologic formations." Earth's Future 2.10 (2014): 548-558.

Siegel, Donald I., et al. "Methane concentrations in water wells unrelated to proximity to existing oil and gas wells in northeastern Pennsylvania." Environmental science & technology 49.7 (2015): 4106-4112.

Tustin, Aaron W., et al. "Associations between unconventional natural gas development and nasal and sinus, migraine headache, and fatigue symptoms in Pennsylvania." Environmental health perspectives 125.2 (2017): 189.

Vengosh, Avner, et al. "A critical review of the risks to water resources from unconventional shale gas development and hydraulic fracturing in the United States." Environmental science & technology 48.15 (2014): 8334-8348.

Vidic, Radisav D., et al. "Impact of shale gas development on regional water quality." Science 340.6134 (2013): 1235009.

Warner, N. R., et al. "New tracers identify hydraulic fracturing fluids and accidental releases from oil and gas operations." Environmental science & technology 48.21 (2014): 12552-12560.