Research On The Evaluation Of Heavy Oil Block Development Project Based On Real Option

At present, our country’s economy is developing very quickly. It needs more energy,especially oil. But the conventional oil resource which reserves in our country is not enough,the external dependence enhances unceasingly. But our country is irch in the resource of heavyoil, the potential of heavy oil development is great. The heavy oil development has highuncertainly and high irsk, it is necessary for heavy oil block development project to evaluatescientiifcally.This paper studies the existing evaluation method. Through the contrast analysis, realoption method is more obvious advantage than other method. According to the real optionrang and the characteirstics of heavy oil block development project, real option is applied tothe evaluation of heavy oil block development project At first, the real option type of heavyoil block development project is identiifed. Second, Geske compound option pircing model isselected for the pricing of the heavy oil block development project. Jing Lou126area of HeNan oilifeld which is used as the real evidence illustrates the advantage of real option. At thesame time, single well is evaluated and sensitivity analysis is made in this paper. According tosensitivity analysis, the volatility is greater effect than the irsk-free rate in the real option value,vertical well is more sensitive than horizontal well in the volatility. Above these evaluationresults which transfer a clear message to the investment managers have laid a good foundationfor the realization of efifcient development in our country’s heavy oil block developmentproject.