How can New Techniques as: MAP, Option Theory, Fuzzy Logic,
Neural Network ... Contribute to the Project Evaluation &
Optimisation Process of field development?
ABSTRACT:
What should be the future of project appraisal and optimisation techniques in the oil industry? The complexity of the oil industry with highly imprecise, uncertain and risky environment will oblige oil companies to seek to be more efficient.
In the other hand, it is difficult to imagine or
to think about efficiency and performance without involving the
development and improvement of their evaluation techniques. Oil
companies have to adopt a new way of thinking toward project evaluation
and optimisation techniques as being the most important and crucial
tool in the acceptance and selection of projects that contribute
in the maximisation of shareholder value. Sophisticated techniques
as MAP, option theory and even future techniques involving the
combination of different theories as fuzzy logic and neural
network can have a start in the oil industry context. A compromise
must be reach between the complexity of these techniques and the
self-confidence and acceptance of these techniques by the decision-maker.
The effort of both parties -theoretical side and practical side-
has to be done to reach this compromise.
This PhD proposal is considered as an effort toward
this compromise by trying to answer the following question: How
can New Techniques as: MAP, Option Theory, Fuzzy Logic, Neural
Network ... Contribute to the Project Evaluation & Optimisation
Process of field development?
The study will discuss first the different techniques of project appraisal and optimisation developed in the literature and being used by companies. The study will distinguish between Classical or Old and New techniques. The Classical or Old techniques are being defined as the collection of the existing methods like Discounted Cash Flow, the Weighted Average Cost of Capital the Capital Asset Pricing toward project appraisal concept.
Complex industry, high risk and uncertainty, volatile
price and also the weaknesses of the Classical or Old techniques
toward project appraisal and optimisation lead to the necessity
to the introduction of so-called New Techniques. In the case of
this study there are defined as Modern Asset Pricing MAP, Option
Theory, Fuzzy Logic, Neural Network, Genetic Computation and Expert
System toward better understanding of capital investment, making
the best decision and remaining competitive in the market.
This research will try to introduce these new techniques
toward project appraisal and optimisation of a development field.
The main tasks of this research is to identify how can these techniques
address the weaknesses of the Classical or Old techniques, how
can they be combined for both project appraisal and optimisation
purposes and how can they be related to the practical case study?