A Decision Support System for Prioritizing Oil and Gas Exploration Activities

James S. Dyer, Richard N. Lund, John B. Larsen, V. Kumar and Robert P. Leone
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James S. Dyer: The University of Texas at Austin, Austin, Texas
Richard N. Lund: MDI Managing Consulting, Munster, Indiana
John B. Larsen: Indiana University, Bloomington, Indiana
V. Kumar: University of Houston, Houston, Texas
Robert P. Leone: The University of Texas at Austin, Austin, Texas

Operations Research, 1990, vol. 38, issue 3, 386-396

Abstract: This paper describes a decision support system developed to prioritize oil and gas exploration activities. During each budgeting cycle, the exploration division of a major oil company must review a number of potential oil and gas plays , and assign personnel to the most promising ones. These personnel are teams of geologists and geophysicists who are responsible for the exploration activities on the site. The number of interesting plays always exceeded the available exploration budget and manpower, so management was concerned about the development of a consistent ranking system of oil and gas plays that could be used to guide the budgeting and manpower decision. The development of the ranking system was based on familiar concepts from decision theory, specifically, multiattribute models and the value of information. Linear approximations to more complex mathematical functions were developed to simplify the model. However, this system was designed to be used on a routine basis by personnel unfamiliar with these technical issues, so they were masked from the user. The successful implementation of the proposed decision support system is described.

Keywords: decision analysis: applications in petroleum/natural gas; utility/preference: multiattribute (search for similar items in EconPapers)
Date: 1990
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