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The Model of Upstream Investment Portfolio in the Mature Regions

Author

Listed:
  • Liya R. Artemkina

    (Gubkin Russian State University of Oil and Gas (National Research University), 65 Leninsky Prospekt, Moscow, Russia,)

  • Natalya Y. Sopilko

    (Russian State Social University, Vil gelma Picka, 4, Moscow, Russia,)

  • Olga Y. Myasnikova

    (Peoples Friendship University of Russia, 6 Miklukho-Maklaya, Moscow, Russia,)

  • Irina U. Eremina

    (Gubkin Russian State University of Oil and Gas (National Research University), 65 Leninsky Prospekt, Moscow, Russia,)

  • Nataliya V. Bondarchuk

    (Russian Academy of National Economy and Public Administration under the President of the Russian Federation, Vernadsky Prospect, 84, Moscow, Russia.)

  • Sergey V. Shamsheev

    (Russian State Social University, Vil gelma Picka, 4, Moscow, Russia,)

Abstract

Portfolio models can serve as an assessment tool for the optimal assignment of capital between the potential investment projects in the various conditions for upstream companies. This process is crucial for any company if it wants to balance the short-term goals and seeks to maximize long-term value of the company. The paper aims to present a practical model of forming oil upstream company s portfolio. The unique feature of this model is an individual approach to investment plan forming in a context of three types of projects: exploration, oil production and infrastructure projects. This is due to the individual approach which is used for comparison of all projects by using of universal set of indicators. Suggested model uses the multi-criteria selection mechanism by means of aggregating the key estimating indicators into the final project rank score. In that way the task of forming investment project s portfolio of upstream company is a linear programming problem that is solved by simplex method. In the paper the model forms consolidated investment portfolio that takes into account decision makers preferences in setting of limits for resources.

Suggested Citation

  • Liya R. Artemkina & Natalya Y. Sopilko & Olga Y. Myasnikova & Irina U. Eremina & Nataliya V. Bondarchuk & Sergey V. Shamsheev, 2019. "The Model of Upstream Investment Portfolio in the Mature Regions," International Journal of Energy Economics and Policy, Econjournals, vol. 9(4), pages 173-180.
    • Handle: RePEc:eco:journ2:2019-04-22
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    References listed on IDEAS

    as
    1. Tang, Bao-Jun & Zhou, Hui-Ling & Chen, Hao & Wang, Kai & Cao, Hong, 2017. "Investment opportunity in China's overseas oil project: An empirical analysis based on real option approach," Energy Policy, Elsevier, vol. 105(C), pages 17-26.
    2. Yulia Alexandrovna Nazarova & Natalya Yuryevna Sopilko & Andrey Valentinovich Kulakov & Irina Ivanovna Shatalova & Olga Yuryevna Myasnikova & Nataliya Vital evna Bondarchuk, 2019. "Feasibility Study of Renewable Energy Deployment Scenarios in Remote Arctic Communities," International Journal of Energy Economics and Policy, Econjournals, vol. 9(1), pages 330-335.
    3. Jia-Yue Huang & Yun-Fei Cao & Hui-Ling Zhou & Hong Cao & Bao-Jun Tang & Nan Wang, 2018. "Optimal Investment Timing and Scale Choice of Overseas Oil Projects: A Real Option Approach," Energies, MDPI, vol. 11(11), pages 1-22, October.
    4. Gul nar Osmanovna Khalova & Natalya Yuryevna Sopilko & Nikita Igorevich Illeritsky, 2019. "Republic of Turkey Gas Complex Development: Problems and Prospects," International Journal of Energy Economics and Policy, Econjournals, vol. 9(1), pages 237-243.
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    Cited by:

    1. Naomi Pandiangan & Sukono Sukono & Endang Soeryana Hasbullah, 2021. "Quadratic Investment Portfolio Based on Value-at-risk with Risk-Free Assets: For Stocks of the Mining and Energy Sector," International Journal of Energy Economics and Policy, Econjournals, vol. 11(4), pages 175-184.

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    More about this item

    Keywords

    Simplex method; optimizing the investment; project s ranking indicator; decision-making mechanism; optimization model; investment portfolio; upstream company;
    All these keywords.

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure

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