How to calculate Cost Oil:
Yet another example was the determination of Allowable Expenditure for calculating Cost Oil. The recovery was purposely tied to a yearly budget approval. By doing this, nothing was required to be definite up-front so as to avoid losing out early due to the lack of knowledge on the issues being addressed. Under this system a mistake or oversight could be readily be corrected by the next budget submission …
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Wata - Malaysian Oil and Gas Engineer 