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A Decision Support System for Prioritizing Oil and Gas Exploration Activities

Author

Listed:
  • 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)

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.

Suggested Citation

  • James S. Dyer & Richard N. Lund & John B. Larsen & V. Kumar & Robert P. Leone, 1990. "A Decision Support System for Prioritizing Oil and Gas Exploration Activities," Operations Research, INFORMS, vol. 38(3), pages 386-396, June.
    • Handle: RePEc:inm:oropre:v:38:y:1990:i:3:p:386-396
    DOI: 10.1287/opre.38.3.386
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    Citations

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    Cited by:

    1. Brimberg, Jack & Mehrez, Abraham & Oron, Gideon, 1995. "An integrated model for the development of marginal water sources in the Negev Desert," European Journal of Operational Research, Elsevier, vol. 81(1), pages 35-49, February.
    2. Donald L. Keefer & Craig W. Kirkwood & James L. Corner, 2004. "Perspective on Decision Analysis Applications, 1990–2001," Decision Analysis, INFORMS, vol. 1(1), pages 4-22, March.
    3. Johannes G. Jaspersen & Gilberto Montibeller, 2015. "Probability Elicitation Under Severe Time Pressure: A Rank‐Based Method," Risk Analysis, John Wiley & Sons, vol. 35(7), pages 1317-1335, July.
    4. Roger Chapman Burk & Richard M. Nehring, 2023. "An Empirical Comparison of Rank-Based Surrogate Weights in Additive Multiattribute Decision Analysis," Decision Analysis, INFORMS, vol. 20(1), pages 55-72, March.
    5. Zhou, P. & Ang, B.W. & Poh, K.L., 2006. "Decision analysis in energy and environmental modeling: An update," Energy, Elsevier, vol. 31(14), pages 2604-2622.
    6. Kaiser, Mark J., 2006. "Hydrocarbon production cost functions in the Gulf of Mexico," Energy, Elsevier, vol. 31(12), pages 1726-1747.
    7. Foo, Nam & Bloch, Harry & Salim, Ruhul, 2018. "The optimisation rule for investment in mining projects," Resources Policy, Elsevier, vol. 55(C), pages 123-132.

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