Reference : Using OR techniques for projets selection in the petrol industy
Scientific congresses and symposiums : Unpublished conference
Business & economic sciences : Production, distribution & supply chain management
Using OR techniques for projets selection in the petrol industy
[fr] Utilisation des techniques de la recherche opérationnelle pour la sélection de portefeuille dans l'industrie pétrolière
BELAID, Fateh mailto [Université du Littoral]
de Wolf, Daniel mailto [Université de Liège - ULg > HEC-Ecole de gestion de l'ULg > HEC-Ecole de gestion de l'ULg >]
23th Conference on Quantitative Methods for Decision Making
du 5 au 6 février 2009
[en] Gestion de portefeuille ; Industrie pétrolière ; Gestion du risque
[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.
Institut des Mers du Nord, Université du Littoral

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