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Using OR techniques for projets selection in the petrol industy
BELAID, Fateh; de Wolf, Daniel
200923th Conference on Quantitative Methods for Decision Making
 

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Keywords :
Gestion de portefeuille; Industrie pétrolière; Gestion du risque
Abstract :
[en] Two important characteristics of petroleum exploration and production investment are the high nancial amounts and uncertainties. For these rea- sons, the risk analysis should be implemented in the projects evaluation and the selection process. Depending on their available resources, petroleum companies choose a number of projects on the basis of some criteria: the net present value, internal rate of return, pro tability index However, these criteria appear to be insu cient if we consider, on the one hand, the ab- sence of risk idea which is an essential element of the petroleum industry, on the other hand the omission of the correlations and interactions between di erent projects. In this paper, in order to make up for the lacks of the traditional approach, we apply a variant of Markowitzs method to deter- mine the e cient portfolio exploration and production projects that insure the best compromise minimum risk-maximum return under the di erent constraints faced by the company. A practical application of this method about selection of petroleum exploration projects in the North Sea is pre- sented. This practical case illustrates the in uence of the crude price in the choice of the portfolio.
Research center :
Institut des Mers du Nord, Université du Littoral
Disciplines :
Production, distribution & supply chain management
Author, co-author :
BELAID, Fateh;  Université du Littoral
de Wolf, Daniel ;  Université de Liège - ULiège > HEC-Ecole de gestion > HEC-Ecole de gestion
Language :
English
Title :
Using OR techniques for projets selection in the petrol industy
Alternative titles :
[fr] Utilisation des techniques de la recherche opérationnelle pour la sélection de portefeuille dans l'industrie pétrolière
Publication date :
05 February 2009
Number of pages :
15
Event name :
23th Conference on Quantitative Methods for Decision Making
Event organizer :
ORBEL
Event place :
Leuven, Belgium
Event date :
du 5 au 6 février 2009
Audience :
International
Available on ORBi :
since 20 April 2009

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