TY - GEN
T1 - A Risk Assessment Method of Coalbed Methane Development Based on Monte-Carlo Simulation
AU - Wang, Binyu
AU - Fan, Lurong
AU - Mao, Zhiqian
AU - Chen, Guojiao
PY - 2022
Y1 - 2022
N2 - China’s coalbed methane (CBM) development industry has faced the dilemma of high investment risk and low return on investment ever since China began developing CBM, a relatively clean unconventional natural gas, in the 1980s. In order to reduce the uncertainty of investment, this paper presents a quantitative analysis method of CBM investment risk based on net present value (NPV) calculation and Monte-Carlo analysis. First, the evaluation considers the uncertainty of gas reservoir resources and the market price fluctuation by establishing a probability model. Then, through the steps of Monte-Carlo simulation, the probability density functions of NPV distribution under three scenarios—optimistic, average, and pessimistic predictions are obtained. Through the study of a case area, this paper proves the feasibility of this method. Furthermore, the results show that the risk assessment method proposed in this paper has important guiding value for the CBM investment decision. © The Author(s), under exclusive license to Springer Nature Switzerland AG 2022.
AB - China’s coalbed methane (CBM) development industry has faced the dilemma of high investment risk and low return on investment ever since China began developing CBM, a relatively clean unconventional natural gas, in the 1980s. In order to reduce the uncertainty of investment, this paper presents a quantitative analysis method of CBM investment risk based on net present value (NPV) calculation and Monte-Carlo analysis. First, the evaluation considers the uncertainty of gas reservoir resources and the market price fluctuation by establishing a probability model. Then, through the steps of Monte-Carlo simulation, the probability density functions of NPV distribution under three scenarios—optimistic, average, and pessimistic predictions are obtained. Through the study of a case area, this paper proves the feasibility of this method. Furthermore, the results show that the risk assessment method proposed in this paper has important guiding value for the CBM investment decision. © The Author(s), under exclusive license to Springer Nature Switzerland AG 2022.
KW - Coalbed methane development
KW - Monte-Carlo simulation
KW - Risk evaluation
UR - http://www.scopus.com/inward/record.url?scp=85134752158&partnerID=8YFLogxK
UR - https://www.scopus.com/record/pubmetrics.uri?eid=2-s2.0-85134752158&origin=recordpage
U2 - 10.1007/978-3-031-10385-8_35
DO - 10.1007/978-3-031-10385-8_35
M3 - RGC 32 - Refereed conference paper (with host publication)
SN - 9783031103841
VL - 2
T3 - Lecture Notes on Data Engineering and Communications Technologies
SP - 497
EP - 505
BT - Proceedings of the Sixteenth International Conference on Management Science and Engineering Management
A2 - Xu, Jiuping
A2 - Altiparmak, Fulya
A2 - Hassan, Mohamed Hag Ali
A2 - Márquez , Fausto Pedro García
A2 - Hajiyev, Asaf
PB - Springer
CY - Cham
T2 - 16th International Conference on Management Science and Engineering Management (ICMSEM 2022)
Y2 - 4 August 2022 through 5 August 2022
ER -