Managing portfolios of interdependent prospects: An application to predict future gas discoveries in the Netherlands
conference paper
Prospect interdependencies, if present and marked by a postitive correlation, result in a higher volatility of the portfolio, compared to a portfolio with independent prospects. The volatility offers options for companies to increase the expected monetary value (EMV) of the exploration portfolio or any group of interdependent prospects. However the same volatility adds uncertainty to the governments future reserves. In order to investigate these effects on the Netherlands Gas portfolio, a methodology has been developed for modelling the effects of dependencies. The methodology integrates Bayesian Belief Network techniques in a stochastic exploration simulator. The results show that dependencies indeed raise the uncertainty of the future gas reserves. Such effects may change a companies or state's view on the exploration strategy. The presented methodology may equally well be used on small groups of prospects and can also be used in decision tree analysis tools.
Topics
TNO Identifier
238953
ISBN
9073781981
Source title
67th European Association of Geoscientists and Engineers, EAGE Conference and Exhibition, incorporating SPE EUROPEC 2005 - Extended Abstracts, 13 June 2005 through 16 June 2005, Feria de Madrid, Conference code: 66893
Pages
1209-1212
Files
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