Financial decision making about found oil and gas in Ghana : real options vs. traditional methods

This research is a study of the use of capital budgeting methods for investment decisions. It uses both the traditional methods and the newly introduced approach called the real options analysis to make a decision. The research elucidates how capital budgeting can be done when analysts encounter projects with high uncertainty and are capital intensive, for example oil and gas production. It then uses the oil and gas find in Ghana as a case study to support its argument. For a clear understanding a thorough literature review was done, which highlights the advantages and disadvantages of both methods. The revenue that the project will generate and the costs of production were obtained from the predictions by analysts from GNPC and compared to others experts’ opinion. It then applied both the traditional and real option valuation on the oil and gas find in Ghana to determine the project’s feasibility. Although, there are some short falls in real option analysis that are presented in this research, it is still helpful in valuing projects that are capital intensive with high volatility due to the strategic flexibility management possess in their decision making. It also suggests that traditional methods of evaluation should still be maintained and be used to value projects that have no options or those with options yet the options do not have significant impact on the project. The research points out the economic ripples the production of oil and gas will have on Ghana’s economy should the project be undertaken. These ripples include economic growth, massive job creation and reduction of the balance of trade deficit for the country. The long run effect is an eventually improvement of life of the citizens. It is also belief that the production of gas specifically can be used to generate electricity in Ghana which would enable the country to have a more stable and reliable power source necessary to attract more foreign direct investment.

CHARACTERIZATION OF ASPHALT MATERIALS CONTAINING BIO OIL FROM MICHIGAN WOOD

The objective of this research is to develop sustainable wood-blend bioasphalt and characterize the atomic, molecular and bulk-scale behavior necessary to produce advanced asphalt paving mixtures. Bioasphalt was manufactured from Aspen, Basswood, Red Maple, Balsam, Maple, Pine, Beech and Magnolia wood via a 25 KWt fast-pyrolysis plant at 500 °C and refined into two distinct end forms - non-treated (5.54% moisture) and treated bioasphalt (1% moisture). Michigan petroleum-based asphalt, Performance Grade (PG) 58-28 was modified with 2, 5 and 10% of the bioasphalt by weight of base asphalt and characterized with the gas chromatography-mass spectroscopy (GC-MS), Fourier Transform Infra-red (FTIR) spectroscopy and the automated flocculation titrimetry techniques. The GC-MS method was used to characterize the Carbon-Hydrogen-Nitrogen (CHN) elemental ratio whiles the FTIR and the AFT were used to characterize the oxidative aging performance and the solubility parameters, respectively. For rheological characterization, the rotational viscosity, dynamic shear modulus and flexural bending methods are used in evaluating the low, intermediate and high temperature performance of the bio-modified asphalt materials. 54 5E3 (maximum of 3 million expected equivalent standard axle traffic loads) asphalt paving mixes were then prepared and characterized to investigate their laboratory permanent deformation, dynamic mix stiffness, moisture susceptibility, workability and constructability performance. From the research investigations, it was concluded that: 1) levo, 2, 6 dimethoxyphenol, 2 methoxy 4 vinylphenol, 2 methyl 1-2 cyclopentandione and 4-allyl-2, 6 dimetoxyphenol are the dominant chemical functional groups; 2) bioasphalt increases the viscosity and dynamic shear modulus of traditional asphalt binders; 3) Bio-modified petroleum asphalt can provide low-temperature cracking resistance benefits at -18 °C but is susceptible to cracking at -24 °C; 3) Carbonyl and sulphoxide oxidation in petroleum-based asphalt increases with increasing bioasphalt modifiers; 4) bioasphalt causes the asphaltene fractions in petroleum-based asphalt to precipitate out of the solvent maltene fractions; 5) there is no definite improvement or decline in the dynamic mix behavior of bio-modified mixes at low temperatures; 6) bio-modified asphalt mixes exhibit better rutting performance than traditional asphalt mixes; 7) bio-modified asphalt mixes have lower susceptibility to moisture damage; 8) more field compaction energy is needed to compact bio-modified mixes.

The Laboratory Evaluation of Bio Oil Derived From Waste Resources as Extender for Asphalt Binder

A shortage of petroleum asphalt is creating opportunities for engineers to utilize alternative pavement materials. Three types of bio oils, original bio oil (OB), dewatered bio oil (DWB) and polymer-modified bio oil (PMB) were used to modify and partially replace petroleum asphalt in this research. The research investigated the procedure of producing bio oil, the rheological properties of asphalt binders modified and partially replaced by bio oil, and the mechanical performances of asphalt mixtures modified by bio oil. The analysis of variance (ANOVA) is conducted on the test results for the significance analysis. The main finding of the study includes: 1) the virgin bioasphalt is softer than the traditional asphalt binder PG 58-28 but stiffer after RTFO aging because bio oil ages much faster than the traditional asphalt binder during mixing and compaction; 2) the binder test showed that the addition of bio oil is expected to improve the rutting performance while reduce the fatigue and low temperature performance; 3) both the mass loss and the oxidation are important reasons for the bio oil aging during RTFO test; the mixture test showed that 1) most of the bio oil modified asphalt mixture had slightly higher rutting depth than the control asphalt mixture, but the difference is not statistically significant; 2) the dynamic modulus of some of the bio oil modified asphalt mixture were slightly lower than the control asphalt mixture, the E* modulus is also not statistically significant; 3) most of the bio oil modified asphalt mixture had higher fatigue lives than the control asphalt mixture; 4) the inconsistence of binder test results and mixture test results may be attributed to that the aging during the mixing and compaction was not as high as that in the RTFO aging simulation. 5) the implementation of Michigan wood bioasphalt is anticipated to reduce the emission but bring irritation on eyes and skins during the mixing and compaction.

Induction of Microalgal Lipids for Biodiesel Production in Tandem with Sequestration of High Carbon Dioxide Concentration

There is no doubt that sufficient energy supply is indispensable for the fulfillment of our fossil fuel crises in a stainable fashion. There have been many attempts in deriving biodiesel fuel from different bioenergy crops including corn, canola, soybean, palm, sugar cane and vegetable oil. However, there are some significant challenges, including depleting feedstock supplies, land use change impacts and food use competition, which lead to high prices and inability to completely displace fossil fuel [1-2]. In recent years, use of microalgae as an alternative biodiesel feedstock has gained renewed interest as these fuels are becoming increasingly economically viable, renewable, and carbon-neutral energy sources. One reason for this renewed interest derives from its promising growth giving it the ability to meet global transport fuel demand constraints with fewer energy supplies without compromising the global food supply. In this study, Chlorella protothecoides microalgae were cultivated under different conditions to produce high-yield biomass with high lipid content which would be converted into biodiesel fuel in tandem with the mitigation of high carbon dioxide concentration. The effects of CO2 using atmospheric and 15% CO2 concentration and light intensity of 35 and 140 µmol m-2s-1 on the microalgae growth and lipid induction were studied. The approach used was to culture microalgal Chlorella protothecoides with inoculation of 1×105 cells/ml in a 250-ml Erlenmeyer flask, irradiated with cool white fluorescent light at ambient temperature. Using these conditions we were able to determine the most suitable operating conditions for cultivating the green microalgae to produce high biomass and lipids. Nile red dye was used as a hydrophobic fluorescent probe to detect the induced intracellular lipids. Also, gas chromatograph mass spectroscopy was used to determine the CO2 concentrations in each culture flask using the closed continuous loop system. The goal was to study how the 15% CO2 concentration was being used up by the microalgae during cultivation. The results show that the condition of high light intensity of 140 µmol m-2s-1 with 15% CO2 concentration obtain high cell concentration of 7 x 105 cells mL-1 after culturing Chlorella protothecoides for 9 to 10 day in both open and closed systems respectively. Higher lipid content was estimated as indicated by fluorescence intensity with 1.3 to 2.5 times CO2 reduction emitted by power plants. The particle size of Chlorella protothecoides increased as well due to induction of lipid accumulation by the cells when culture under these condition (140 µmol m-2s-1 with 15% CO2 concentration).

ECONOMIC PROFITABILITY OF THE BAKKEN, NORTH DAKOTA UNCONVENTIONAL OIL PLAYS BASED ON A TYPICAL WELL PERFORMANCE WITH CURRENT MARKET CONDITIONS

Increases in oil prices after the economic recession have been surprising for domestic oil production in the United States since the beginning of 2009. Not only did the conventional oil extraction increase, but unconventional oil production and exploration also improved greatly with the favorable economic conditions. This favorable economy encourages companies to invest in new reservoirs and technological developments. Recently, enhanced drilling techniques including hydraulic fracturing and horizontal drilling have been supporting the domestic economy by way of unconventional shale and tight oil from various U.S. locations. One of the main contributors to this oil boom is the unconventional oil production from the North Dakota Bakken field. Horizontal drilling has increased oil production in the Bakken field, but the economic issues of unconventional oil extraction are still debatable due to volatile oil prices, high decline rates of production, a limited production period, high production costs, and lack of transportation. The economic profitability and viability of the unconventional oil play in the North Dakota Bakken was tested with an economic analysis of average Bakken unconventional well features. Scenario analysis demonstrated that a typical North Dakota Bakken unconventional oil well is profitable and viable as shown by three financial metrics; net present value, internal rate of return, and break-even prices.