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Economic Considerations and Framing-Chapter 6

Elsevier Inc.
DOI: 10.1016/b978-1-85617-855-6.00012-7
  • Economics


Publisher Summary This chapter explores “economic considerations and framing”. For any venture of any magnitude, the decision to commit recourses lies with an individual, organization or group of people. Skinner (1999) defines a decision thus: “A decision is a conscious/ rational irrevocable allocation of resources with the purpose of achieving a desired objective.” It's most likely that the decision-making authority proceeds with a clear, well-defined objective in mind; in other words, he decides through a rational process. Given the complexities of enhanced oil recovery (EOR) evaluation, variables such as well spacing and injection volumes are evaluated as early as possible during the screening phases to validate the economic feasibility of a particular EOR method. Concepts of Capital Expenditures (CAPEX) and Operational Expenditures (OPEX), tax incentives by the State to facilitate EOR from marginal and mature fields are also discussed. The main objective of these incentives is to recover additional reserves and extend the productive life of the reservoirs by implementing EOR methods.

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