Energy

Multinational Energy Company - Oil and Gas Exploration

Each quarter, the company has to choose which prospects to drill from its portfolio. Each prospect is characterised by geological data indicating potential reserves, risk, and cost. Given corporate constraints, which prospects should be drilled?

Oxford Risk:

• Identified the criteria and metrics used in decision-making in practice, which often differed from corporate guidelines.
• Mapped biases in the process of decision-making. For example, Oxford Risk found that estimates of reserves and probability of success were significantly overrated by particular teams, resulting in discoveries that would cost $20million to drill, but were not commercially viable.
• Developed a software tool to help optimise the portfolio.
• Offered training workshops designed to ensure consistent application of decision-making criteria at all levels of the organisation.

The benefit was a more rational approach to exploration drilling decisions. Revised processes allowed for more ‘voices’ in the decision-making, and reduced the number of unproductive test wells, leading to considerable cost savings and bringing forward other viable production.