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Oil & Gas Training
and Competency Development
Competency Management system SLB NEXT

Risk, Uncertainty and Decisions in E&P Projects RILS

Risks and uncertainties are everywhere in E&P projects. Theyimpact decision making by the projects chosen, how they aredeveloped, and their economic performance. Improving the quality of decisionsis the main goal, not just understanding risk and uncertainty for their ownsake.

Although probabilistic concepts and tools arecommonly used to describe projects under risk and uncertainty, theprinciples underlying these concepts and tools are not always wellunderstood.  Upon completion of thiscourse, participants will become more comfortable with probabilistic thinkingand how it can be used to improve decision making.


Day 1 - Risk

Basic probability refresher

Probability calculation rules 

Expected value, risk dependence

Simple exploration economics exercise


Day 2 - Decision Analysis

Decision trees

Influence diagrams, SWOT analysis

Bayes formula 

Value of Information and case study

The case study will illustrate the concept of value of information by combining decision trees and Bayesian inversion to show how the probability of geologic success should be revised to incorporate new seismic information and how the quality of this information impacts its value.  


Day 3 - Psychological Aspects of Decision Making

Utility curves and risk attitudes 

Behavioral economics

How good are we at estimating?

Cognitive biases


Day 4 - Uncertainty

Deterministic versus probabilistic: what is the difference?

Histogram, pdf, cdf, percentiles, mean, mode, median, variance, standard deviation

Risked mean

Standard error of the mean, confidence intervals

Random errors and bias

Correlation and its interpretation

The flaw of averages, the winner’s curse


Day 5 - Monte Carlo Simulation and case studies

A review of the most common distributions used in geosciences

The Monte Carlo approach

Presentation of @RISK™, a Monte Carlo add-in for Excel™

Computing uncertainty on STOIIP

What to expect from a workover program?

Estimation of the production increase expected from a workover program will demonstrate the importance of scale in assessing uncertainty. 


Anyone interested in learning more about the approach and techniques of risk, uncertainty and decisions in E&P projects.


Some basic statistics knowledge would be useful but not mandatory. 


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