Issues in risk and uncertainty evaluation – Toward improved application in E&P

Abstract

Geological risk assessments have been routinely carried out for exploration and development in oil and gas since 1990s. Because of our lack in sufficient information and knowledge of subsurface resources, the geological risk is quantitatively evaluated using probabilistic techniques. Even though the methodologies of risk assessments look well established already, some issues still remain in their actual execution and application and three key issues are highlighted here: geological chance of success, cognitive biases and post-well evaluation.

Geological chance of success may be regarded as relatively a simple concept of risk evaluation, but its proper understanding and implementation canʼt be easily achieved as it is not an absolute number and its assessment depends on quality/quantity of information and technical skills/experiences of evaluators.

As subsurface evaluation relies on fairly limited information under great uncertainties, it is very susceptible to cognitive biases including anchoring, availability heuristic, conjunction fallacy, overconfidence and hindsight bias.

Post-well evaluation is a crucial part of the risk analysis and required to be conducted so as to improve the quality of risk evaluation.