Decision-making – Have we adopted a cult of mediocrity? -- Professor Reidar B Bratvold

Professor Bratvold will explore what it means to make “high-quality” decisions and illustrate how E&P companies have not adopted a consistent approach to decision making under uncertainty. He will demonstrate how this inconsistency leads to actual outcomes being consistently worse than estimated. Despite increased focus on uncertainty modelling, E&P companies are not consistently modelling or accounting for uncertainty across the value chain. Furthermore, they tend to take on a risk averse attitude when they should not, and implement risk aversion in an inconsistent way when they should, all leading to disappointments on average.

REIDAR B BRATVOLD is a Professor of Petroleum Investment & Decision Analysis at the University of Stavanger. He has provided advanced investment- and decision-analysis consulting and professional development services for major operating companies. Twice invited to serve as SPE Distinguished Lecturer, in 1998/99 on the topic “Uncertainty Assessment and Risk Management in Exploration & Production” and in 2003/04 with the topic “Would You Know a Good Decision if You Saw One?”, he is a frequent speaker at industry conferences and events. He has published numerous papers on topics such as investment modelling, decision-making, stochastic reservoir modelling, fuzzy logic and reservoir management. Reidar is the co-author of two upcoming books: “Decision-Making and Uncertainty Management” and “Analyzing and Managing Risky Investments.”

The Value of Managerial Flexibility -- Dr. Bart J.A. Willigers, MBA

The majority of companies incorporate a risk assessment in their economic evaluations by scenario analysis, probabilistic modelling and/or Monte Carlo simulations. These results are typically presented as expected values and probability distributions. This practise does not capture the value of managerial flexibility which can significantly affect the value of a project. During this presentation Dr Willigers will categorise different risk drivers and demonstrate how E&P companies can model different risk types and unveil the value associated with managerial flexibility.

BART JA WILLIGERS is a senior consultant working for Palantir Economic Solutions Ltd. He has introduced new decision making models and processes in corporations active in upstream oil and gas and in the Pharmaceutical sector. Bart has written several papers on risk modelling and geology.