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A Methodology for Gauging the Sensitivity of Project Value During Concept Comparison and SelectionNormal access

Authors: M. Neuhold, S.A. Shedid, C. Jablonowski and C. Wiboonkij-Arphakul
Event name: IPTC 2008: International Petroleum Technology Conference
Session: Meeting the Energy Needs of a Growing World Economy
Publication date: 03 December 2008
Organisations: EAGE
Language: English
Info: Extended abstract, PDF ( 344.64Kb )
Price: € 20

Project value is highly correlated with decisions made
during concept comparison and selection. Decisions as
such are made amid uncertainty, putting value at risk. This
study details a methodology for determining the loss in
project value when inaccurate estimates are used during
concept comparison and selection. The difference between
net present values (NPVs) based on inaccurate estimates
and those based on an alternate hypothesis that is assumed
to represent the truth determines the magnitude of loss.
The value of the information required to reduce
uncertainty can then be obtained.

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