Application and discussion of expected monetary value (EMV) method in domestic shale gas block bidding

Abstract

The result of mining right bidding, affected by many factors, has strong uncertainty. Especially in areas with low exploration degree, how to accurately carry out block economic evaluation is a key issue in current research. Based on the expected monetary value (EMV) method, this paper considers the "risk-value" two-factor model to quantify the geological risk, uses the probability distribution model to quantify the uncertainty of resources, defines the basis for the selection of key parameters, sorts out the economic evaluation scheme for shale gas blocks in areas with low exploration degree, and carries out the application to a shale gas block in the Guizhong Depression in Dianqiangui Basin, southern China. The results show that the method comprehensively considers multiple scenarios under different combinations of schemes, such as resource potential, engineering and technical conditions, development scheme, expected economic value, and oil and gas subsidy policies. The multiple sets of economic evaluation schemes formed can provide diversified block economic evaluation parameter data for decision makers, and can effectively guide the decision-making of block bidding scheme.

Keywords

• expected monetary value(emv) method
• economic evaluation
• shale gas block bidding
• exploration and development of oil and gas