Study On Oil Price Risk Management Of Production Sharing Agreement

Production sharing agreement(PSA) is an very important model of international oilcooperation to help our country's oil companies get oil from outside and help them carry outthe strategy of"going outside". The production and management of Production SharingAgreement already fused together with the development of international oil economy. Thefluctuation of oil price has tremendous influence of the operator's performance. Like Sudanprojection, if per barrel oil's price fluctuated one dollar, the fluctuation of profit would behundred million dollars. So, taking effective measures to control oil price rick to reduce theshock of the fluctuation of international oil price, the operator's financing risk, and to protectthe stability of operator's cash flow, has become an important task of the PSA's operator.This thesis takes the oil price risk of the PSA's operator as discussing target, distinguishesthe risk, measures the risk by the method of VaR, at the same time ,combines operator'sexperience and technology to judge probability of the risk, and then, derivates the operator'srisk distribution structure chart. According to the chart, choose and carry out the operatingstrategies to manage the operator's oil price risk. And, in the end, to make the operatingstrategies goes smoothly, point out some protecting methods.This thesis is composed by five parts. The first part introduced the background andimportance of managing the oil price risk of operator of PSA, and made a comment aboutresearch achievement of PSA. The second part introduced the knowledge of PSA, riskmanagement and the basic of derivatives. The third part analyzed the current management ofPSA's oil price risk, existing problems and some inspirations from other companies related tooil. The forth part distinguished, measured and evaluated the oil price risk of the operator, andpointed out choose which find of tactics to avoid risk and specific measures. The fifth partpointed out some useful methods to protect the risk management smoothly.This thesis tried to search how to manage the oil price risk of PSA, for improving ourcountry's oil companies'economic benefit as the operator of PSA. At the same time, hope thatit can provide some experience for other kinds of models of international oil cooperation.