Investment In Overseas Oil Exploration And Development Project Risk Analysis

As a fossil energy, the importance of oil has been gradually recognized by governments with the record high price in recent years. The Chinese state-owned oil companies started their overseas journey at 20th century, and great achievement has been made in oil exploration and development. However, the high risks behind the huge margin of overseas oil business should be paid more attention.The purpose of this article is to analyze the comprehensive risks of international oil projects through two levels, the decision-making and the risk control in process of project execution. And the 7 kinds of risk in overseas oil business have been introduced, the magnitude and the possibility of risks are also discussed.Four international oil contract models are compared, the difference between the 4 models have been described in detail. A method, known as UTA, which is an effective way for risk evaluation, is introduced in the article. several methods to reduce and avoid the risk are also discussed. And some potential factors which could effect the real rate of return of project are analyzed by actual case study. So the result of the article could be benefit for decision-makers and also operators in execution of international oil project.