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A Note on Petroleum Industry Exploration Efficiency

The concern over natural resource adequacy has led to the development of new theoretical models designed to predict behavior of firms exploring for and exploiting nonrenewable natural resources. However, advances in the theory of the mining firm have generally outpaced our ability to describe the exploration and discovery process empirically. An important topic is the industry's technical exploration efficiency-that is, how much exploration effort is needed to identify the fields with lowest unit production costs, so that extraction can proceed from the lowest to higher-cost resources.

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Energy Specializations: Petroleum – Exploration and Production

JEL Codes: Q35: Hydrocarbon Resources, Q41: Energy: Demand and Supply; Prices, Q40: Energy: General, Q32: Exhaustible Resources and Economic Development, L71: Mining, Extraction, and Refining: Hydrocarbon Fuels

Keywords: Oil industry, Oil exploration efficiency, Firm behavior

DOI: 10.5547/ISSN0195-6574-EJ-Vol5-No3-9

Published in Volume 5, Number 3 of the bi-monthly journal of the IAEE's Energy Economics Education Foundation.


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