2. Given the information provided, do the best you can to rank the projects from lowest cost to highest cost. Background: As the senior executive in charge of exploration for High Octane Oil Co., you are constantly looking for projects that tract and British Petroleum has found oil 500 miles away from this tract. It would take about three years to develop this property and several more years to build pipelines and pumping stations to carry the oil to the refineries. The Bra- will add to the company's profitability-zilian government wants 20 percent of all production as its without increasing the company's risk. High Octane Oil is an international oil company with operations in Latin America, the Middle East, Africa, the United States, and Mexico. The company is one of the world's leading experts in deep-water exploration and drilling. High Octane cur- rently produces 50 percent of its oil in the United States, 25 percent in the Middle East, 5 percent in Africa, 10 percent in Latin America, and 10 percent in Mexico. You are con- sidering six projects from around the world. Project 1-Your deep-water drilling platform in the Gulf of Mexico is producing at maximum capacity from the Val- dez oil field, and High Octane's geological engineers think there is a high probability that there is oil in the Sanchez field, which is adjacent to Valdez. They recommend drilling a new series of wells. Once commercial quantities of oil have been discovered, it will take two more years to build the collection platform and pipelines. It will be four years before the discovered oil gets to the refineries. Project 2-The Brazilian government has invited you to drill on some unexplored tracts in the middle of the cen- tral jungle region. There are roads to within 50 miles of the fee for giving High Octane Oil Co. the drilling rights or a $500 million up-front fee and 5 percent of the output. Project 3-Your fields in Saudi Arabia have been producing oil for 50 years. Several wells are old, and the pressure has diminished. Your engineers are sure that if you were to initiate high-pressure secondary recovery procedures, you would increase the output of these exist- ing wells by 20 percent. High-pressure recovery methods pump water at high pressure into the underground lime- stone formations to enhance the movement of petroleum toward the surface. Project 4 Your largest oil fields in Alaska have been producing from only 50 percent of the known deposits. Your geological engineers estimate that you could open up 10 percent of the remaining fields every two years and off- set your current declining production from existing wells. The pipeline capacity is available and, while you can only drill during six months of the year, the fields could be pro- ducing oil in three years.