Course overview
This course teaches the skills required for a key component of a Petroleum Engineer's job - creating value by making decisions that yield optimal returns on the allocation of human and financial resources. The many uncertainties inherent to the oil and gas business (estimating current 'states-of-the world/nature' and predicting future events) create considerable uncertainty in the value that can be realised from resource-allocation decisions. Consequently, there will be a strong emphasis on evaluating the impacts of uncertainty, managing its resultant risks and planning to exploit its up-side potential. Topics to be addressed are the decision-making process, multi-objective decision making, decision-tree analysis, decision criteria, Monte Carlo Simulation and Value of Information and Flexibility. In addition, Utility Theory will be introduced as a means of rationally accounting for risk attitudes. Some of the psychological and judgemental aspects of how people respond to uncertainty will be discussed. The techniques learned in this course will also be useful in making personal decisions.
Course learning outcomes
- Learn decision and risk analysis (DandRA) concepts and terminology that are most used in industry
- Understand the impact of uncertainty in decision-making
- Learn specific tools and processes for analysing and making decisions - useful both professionally and personally
- Practice using these tools and processes in Excel
- Learn to evaluate and interpret the output of DandRA tools and processes - to make the best decision
- Develop a critical-thinking, problem-solving, value-creating approach to decision-making
- Understand how people often actually make decisions as opposed to how they should
- As part of a team, perform and present a critical review of a paper/topic related to the course material
- Develop a borader, contextual understanding of decision and risk analysis by reading a range of relevant papers and articles
- Demonstrate DandRA software commonly used by industry
- Ancillary: Review relevant probability and statistics, and introduce new ideas as necessary to support this course
- Further develop and practice general Excel skills