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The condition of the oil and gas sector is characterized by the complication of geological settings, and there is more competition in energy markets due to the current trend towards decarbonization. These circumstances require oil and gas companies to become more flexible and improve their project economic feasibility studies. The purpose of the research was to develop a methodological approach for the economic evaluation of oil and gas projects that includes choosing and substantiating the choice of engineering solutions that can be used to make decisions on subsequent investing. A comparative analysis of various economic evaluation methods applied to oil and gas projects included the DCF model, DPNV model with modifications, binary discounting, and reverse discounting. Taking into account the specific features of oil and gas projects, the authors provide a rationale for using a risk-free rate to calculate project outflows and a combination of reverse rates to calculate inflows. In addition, the theory of real options was applied to assess and account for geological and technical risks. These risks cause changes in the production rate when making engineering decisions. Using the proposed methodological approach, oil and gas companies will be able to evaluate in more detail and explain the influence of engineering solutions on the net present value of the project. This is the result of better consideration of geological and technical risks. The proposed approach is relevant both before project implementation and during production.
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