Game theory, the study of multiperson problems, is applied to petroleum business. First, basic concepts of game theory are introduced, taking the petroleum production determination as an example, where the behavior of petroleum producing countries can be reasonably explained. Then, many aspects of petroleum exploration and development are analyzed with various techniques of game theory: Bidding for mining rights and contractors, party power in joint ventures, utilization of exclusive operation mechanism, and exploration planning strategies are evaluated with auction theory, SS and Bz indices, and decision trees. These analyses will lead to successful strategic decisions.
