Research On Investment Decision Of CO₂ Flooding And Storage Project In Real Option Method

The concept of real option theory comes from financial option theory.The difference is that the underlying asset of real option is real asset,while the underlying asset of financial option is financial asset.Traditional evaluation methods regard uncertainty as the unfavorable factor that reduces the economic benefit of the project,while real option theory proves that the more uncertain factors,the greater the possible option value,and the value of investment opportunity increases with the increase of uncertainty degree.So the greater the uncertainty,the higher the value of the project.Real option method is a method similar to financial option,which is used to evaluate the economic benefits of flexible investment,and is also a method to make project investment management more scientific and perfect.Combined with the traditional NPV method,the real option method fully considers the option value brought by flexible investment and the strategic value of the future growth opportunities of the project.Compared with the traditional NPV method,the real option method can evaluate the real value of the project more comprehensively and reasonably.CO₂ flooding is an alternative to conventional water flooding by injecting co2into the reservoir to enhance oil recovery.This technology is not only suitable for conventional reservoirs,especially for low permeability and ultra-low permeability reservoirs,which can significantly improve oil recovery.In addition,the technology can also sequester CO₂ underground,which plays a role in reducing greenhouse gas emissions,thereby curbing the greenhouse effect.The purpose of this study is to put the real option method is applied to A field of CO₂ flooding and sequestration projects,to understand the real options method on the application of the principle of identification on the basis of the characteristics of option and real option model of the project,reference to A huge mass of data to estimate all parameters of the project,and all parameters will be brought into the model to calculate the real value of the project contains the option value,And then compared with the traditional net present value method of the project to get a conclusion.Research results show that the traditional evaluation method,to some extent can no longer be the economic value of comprehensive evaluation of oil and gas exploration and development project,ignoring the future change of option value,and to underestimate the economic benefits of the project,and for oil and gas exploration and development projects this difference could be huge,could cause investors to make wrong decisions.The project applied by real option method is characterized by uncertainty,multi-stage and long investment cycle,and the strategic investment value under uncertain environment is fully considered on the basis of traditional NET present value method.The real option method makes the evaluation method of the project more perfect and plays a positive role in the promotion of the project.