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VALUE CHAIN - OIL AND GAS
Value Chain – Oil and Gas
- Land
- Mineral rights
- Establishing a legal framework
- Geological data
- Exploration concession auction
- Exploration
- Production concession auction
- Test drilling
- Production drilling
- Pipelines
- Storage
- Royalties
- Flares
- Air pollution (flares, gases)
- Water and ground pollution (oil)
- Oil field supplies
- Drill casing
- Drill mud
- Drill pipe
- Drill bits
- Pumps
- Derricks
- People
- People services – hotels / entertainment
- People services – food / water / clothing
- Oil storage
- Oil export terminals
- Crude oil transport – tankers
- Crude oil transport - pipelines
- Oil import terminals
- Oil storage
- Pollution
- Refining
- Refined product storage
- Refined product transport – pipeline
- Refined product transport – tanker truck
- Refined product transport – tanker ship
Value Chain – Oil and Gas
Item Community National
Interests
Local Investors External
investors
Land Traditionally an
assets of the
community and the
people ... now the
basis of a culture
of property rights
based on new laws
Mineral rights Under modern law
are deemed to
belong to the
nation
Establishing a legal
framework
Geological data This is the key to
getting results from
investment in
exploration and
drilling.
Exploration
concession auction
This is the key to
getting wealth
flows accruing to
national interests .
How is this
received? How is
this accounted for?
A necessary
investment.
How is this paid?
Exploration A necessary
investment
Production
concession auction
This is a second
key to getting
wealth flows
accruing to national
interests .
How is this
received? How is
this accounted for?
A necessary
investment.
How is this paid?
Test drilling A necessary
investment
Production drilling A necessary
investment
Pipelines A necessary
investment
Storage tanks A necessary
investment
Item Community National Interests Local Investors External investors
Royalties
How is this received and accounted for?
How is this calculated?
How is this paid?
Flares – air pollution
Pollutes the local area
Cheapest way of handling gas that cannot be processed
Water and ground pollution (oil)
Pollutes the land, pollutes the water.
Kills the fish.
Destroys livelihood.
Oil field supplies
Drill casing
Drill mud
Drill pipe
Drill bits
Pumps
Derricks
Opportunity for others to be suppliers
Need to be purchased and used all the time
People
Few local people have training and experience needed for the available work
Some employment generated in the services and support businesses
Most critical staff are international and very well paid
People services – hotels / entertainment
Opportunities for local business to provide services
People services – food / water / clothing
Opportunities for local business to provide services
Oil storage A necessary investment
Oil export terminals A necessary investment
Export taxes, fees
How is this received?
How is this paid?
Crude oil transport – tankers A necessary investment
Crude oil transport - pipelines A necessary investment
Oil import terminals A necessary investment
Oil storage A necessary investment
Pollution Local pollution a matter of course ... nobody cares
Expensive ... very low public tolerance of pollution in any
Item Community National
Interests Local Investors External investors form
Refining A necessary investment
Refined product storage A necessary investment
Refined product transport – pipeline A necessary investment
Refined product transport – tanker truck A necessary investment
Refined product transport – tanker ship A necessary investment
Distribution depots A necessary investment
Gas stations A necessary investment
Profiting from the Value Chain – Oil and Gas
Item Community National Interests Local Investors External investors
Case A Case B Case A Case B Case A Case B Case A Case B
Land
Mineral rights
Establishing a legal framework
Geological data
Exploration
concession auction
Exploration
Production
concession auction
Test drilling
Production drilling
Pipelines
Storage
Royalties 100
Flares
Air pollution (flares, gases) -10 0 0 +10
Water and ground pollution (oil) -10 +10
Oil field supplies
Drill casing
Drill mud
Drill pipe
Drill bits
Pumps
Derricks
People
People services – hotels / entertainment
People services – food / water / clothing
Oil storage
Oil export terminals
Item Community National Interests Local Investors External investors
Case A Case B Case A Case B Case A Case B Case A Case B
Crude oil transport – tankers
Crude oil transport - pipelines
Oil import terminals
Oil storage
Pollution
Refining
Refined product storage
Refined product transport – pipeline
Refined product transport – tanker truck
Refined product transport – tanker ship
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