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OIL, LIVELIHOODS AND ENVIRONMENT. Four days of training, information and ideas: 1) Oil, ownership and ‘development’ 2) Companies 3) Environmental impacts & communities 4) Livelihoods and community mapping. Day 1: Oil, ownership and ‘development’. 4,000,000,000 years. Humans. Mammals.
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OIL, LIVELIHOODS AND ENVIRONMENT Four days of training, information and ideas: 1) Oil, ownership and ‘development’ 2) Companies 3) Environmental impacts & communities 4) Livelihoods and community mapping
Day 1: Oil, ownership and ‘development’ 4,000,000,000 years Humans Mammals Bacteria Dinosaurs Multi cellular organisms Complex cells
What a barrel of oil can contain GLOBAL WARMING POLLUTION DESTRUCTION CONFLICT INSECURITY DISTORTED ECONOMY CORRUPTION GREED
The key players in the barrel CONSUMERS LOCAL COMMUNITIES MILITIA GROUPS ARMS INDUSTRY PRIVATE SECURITY SERVICE CONTRACTORS OIL COMPANIES GOVERNMENT
What should a barrel of oil contain? HUMAN SECURITY ENERGY DIVERSITY HIGH ENVIRONMENTAL STDS ECONOMIC DIVERSITY DEVELOPMENT INVESTMENT ACCOUNTABILITY TRANSPARENCY
$$$… Oil companies exist to make money. Governments allow companies to make money in return for giving them a big share of the profits. Oil is different from most businesses because when it works it makes LOTS of money because oil is a great source of ENERGY.
Land, Oil and division of ownershipAmerica is one of the very few countries in the world in which the oil, gas, and minerals in the ground belong to the surface owner - the person or people who own the land ‘in fee simple’.In nearly all countries the underground resources and minerals belong to the state or the King.Sudanese oil belongs to the state, and in theory, is there to be developed for the benefit of all Sudanese people.The land belongs to whoever lives upon it or derives a living from it. But the state may take that land in order to develop the resources that lie under it -(or build a road.. Or dam, or .. ) but only after paying the landowners a fair price.Like most countries, Sudan has developed a system of ‘blocks’. Blocks are Concession Areas, which they lease to operators to explore for oil and gas.A typical exploration lease lasts 5 years, if the company finds oil, they negotiate a production lease which may last 10 -15 - 20 years.
Forms of development • Single operator and royalty • Multiple operators and PSAs Government Line Ministry Government Line Ministry ? Company ? Technical Authority ? Company A Company B Company C
Licenses • Exploration license - 5 yrs • Seismic survey - two kinds: 2D and 3D • Exploration wells - ‘wildcat’ wells • Production Sharing Agreement - 10 - 20 yrs • Field development The small print is important
Typical sequence… • Oil and mineral rights law (Government) • Gazettement or definition of blocks (cadastral survey) (Government) • Bid round (Government - with companies bidding) • Issuance of PSA (Government) • Work (Company) Geological desk study (existing data) Field geology Seismic survey Exploration drilling Then IF you find oil… (Company) Early field development and production Field development (reservoir management) and production Field closure and abandonment
Afternoon session: GPS basics • Batteries • On / Off • Setup (this may take time) • Logging waypoints & notes • What the screen means and says
Day 2: COMPANIES • Oil Majors • Mid caps • Consortiums • Contractors (and sub-contractors, and sub-sub contractors) • Seismic • Drilling • Civil engineering • General oilfield services • Security
Companies don’t own oil: countries own oil. Companies just drill, pump and deliver oil to markets. Oil Majors (aren’t, really)
Mid caps • Small oil companies
Operator: company A 72% Shareholder: company B 18% Shareholder: company C 5% Shareholder: company D 3% Shareholder: company E 2% • Consortiums
Contractors (and sub-contractors, and sub-sub contractors) • Seismic (acquisition / analysis) • Exploration drilling (and mud / logging / testing) logging • Field development / reservoir management • Civil engineering (bulldozers…) • Oilfield services (everything from catering to transport) • Security
Contractors (and sub-contractors, and sub-sub contractors) • Seismic (acquisition / analysis)
Contractors (and sub-contractors, and sub-sub contractors) • Drilling (and mud / logging / testing) logging
Contractors (and sub-contractors, and sub-sub contractors) • Civil engineering (bulldozers…)
Produced water . . .Is typically 85% of what comes out of the ground Its not an oil company, it’s a (dirty) water company, oil is just a by-product..
Contractors (and sub-contractors, and sub-sub contractors) • Security
GPS: making tracks & finding things • How to load location data • How to tell the difference between different location formats • UTM • Decimal degrees • Degrees minutes seconds Lets go and find some things…
Day 3: SEIA.. 8 principles for SEIA: • Participation: An appropriate and timely access to the process for all interested parties. • Transparency: All assessment decisions and their basis should be open and accessible. • Certainty: The process and timing of the assessment should be agreed in advanced and followed by all participants. • Accountability: The decision-makers are responsible to all parties for their action and decisions under the assessment process. • Credibility: Assessment is undertaken with professionalism and objectivity. • Cost-effectiveness: The assessment process and its outcomes will ensure environmental protection at the least cost to the society. • Flexibility: The assessment process should be able to adapt to deal efficiently with any proposal and decision making situation. • Practicality: The information and outputs provided by the assessment process are readily usable in decision making and planning.
Why it fails.. “.. Environmental protection is an integral part of corporate social responsibility. ** strictly follows environmental protection laws and regulations, attaches importance to climate change and ecological protection, and continuously promotes energy conservation and emission reduction work to realize the coordinated development of production and environmental protection.” “.. We adopt strict management systems and environmental protection plans to ensure environmentally friendly operations, so as to effectively protect the natural environment of various operation areas like deserts, wetlands and natural reserves. We also urge subsidiaries to establish environment management systems, pollutant discharge-reduction index systems, monitoring systems and appraisal systems. By 2007, 216 subsidiaries of ** had passed ISO14001 certification. And in 2008, 41 subsidiaries of **, including all our engineering and equipment manufacturing units, passed ISO 9000 quality certification.”
How to work with operating companies.. • Lowering risks • Lowering costs • Improving public image • Improving long-term prospects