An economic analysis of crude oil exploration in Saskatchewan and Alberta
Date
2002-08-22
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
ORCID
Type
Degree Level
Masters
Abstract
The International market of crude oil and natural gas is well established and very competitive. Knowledge about costs is important in helping to understand the current position of producers within the industry. In the eyes of the producers, the lower the costs the more profitable they will become given the price of crude.
This thesis focuses on an economic analysis of crude oil exploration in Saskatchewan and Alberta. In a competitive market, the producers require estimates of finding costs in both regions. The public policies that are designed to encourage crude exploration also rely heavily on reliable estimates of these costs.
The results show that Saskatchewan’s per-unit finding cost is significantly lower than Alberta’s in spite of the geological differences between the two provinces. The finding costs are estimated by using a methodology (Uhler 1979) that has been widely accepted within economic literature of non-renewable resources. The results support the hypothesis that finding costs in both regions are increasing and the argument that these costs will converge in the long-run, except for the last six years of the analysis.
Description
Keywords
land, royalties, taxation, finding cost, discovery process, exploration activities, crude oil, oil prices, public policies
Citation
Degree
Master of Arts (M.A.)
Department
Economics
Program
Economics