Mature offshore oil field development: Solving a real options problem using stochastic dual dynamic integer programming
Oil and gas companies are facing low output prices and are forced to focus on the development of mature fields. Relevant investment decisions for operators include lifetime-enhancing activities, such as drilling new wells or permanent shutdown. We study the problem of optimal timing of investments i...
Uloženo v:
| Vydáno v: | Computers & operations research Ročník 136; s. 105480 |
|---|---|
| Hlavní autoři: | , , , |
| Médium: | Journal Article |
| Jazyk: | angličtina |
| Vydáno: |
New York
Elsevier Ltd
01.12.2021
Pergamon Press Inc |
| Témata: | |
| ISSN: | 0305-0548, 0305-0548 |
| On-line přístup: | Získat plný text |
| Tagy: |
Přidat tag
Žádné tagy, Buďte první, kdo vytvoří štítek k tomuto záznamu!
|
| Abstract | Oil and gas companies are facing low output prices and are forced to focus on the development of mature fields. Relevant investment decisions for operators include lifetime-enhancing activities, such as drilling new wells or permanent shutdown. We study the problem of optimal timing of investments in mature oil and gas fields in the presence of price uncertainty, which is an example of a complex real options problem consisting of a portfolio of interdependent options. We formulate a multistage stochastic integer programming model that incorporates a detailed representation of the uncertain oil price, and demonstrate how such a complex real options problem can be efficiently solved using the Stochastic Dual Dynamic Integer Programming algorithm. The paper presents a numerical example based on realistic data and discusses our computational results. We find that only a small number of Markov states are required to represent the uncertain price process, while obtaining convergence of the lower and upper bounds of the objective function. The value of stochastic solution of 11% is considerable in this example. It is concluded that the shutdown decision tends to be postponed as a result of high decommissioning costs, high discount rates, high price uncertainty and low operational expenditures, while it generally is accelerated if the decommissioning costs increase over time.
•We show how to solve complex real options problems using stochastic dual dynamic integer programming.•We provide a new problem description for the development of mature offshore oil fields.•We estimate the STLT model using recent data on oil futures.•We find that the shutdown decision gets accelerated if decommissioning costs increase over time. |
|---|---|
| AbstractList | Oil and gas companies are facing low output prices and are forced to focus on the development of mature fields. Relevant investment decisions for operators include lifetime-enhancing activities, such as drilling new wells or permanent shutdown. We study the problem of optimal timing of investments in mature oil and gas fields in the presence of price uncertainty, which is an example of a complex real options problem consisting of a portfolio of interdependent options. We formulate a multistage stochastic integer programming model that incorporates a detailed representation of the uncertain oil price, and demonstrate how such a complex real options problem can be efficiently solved using the Stochastic Dual Dynamic Integer Programming algorithm. The paper presents a numerical example based on realistic data and discusses our computational results. We find that only a small number of Markov states are required to represent the uncertain price process, while obtaining convergence of the lower and upper bounds of the objective function. The value of stochastic solution of 11% is considerable in this example. It is concluded that the shutdown decision tends to be postponed as a result of high decommissioning costs, high discount rates, high price uncertainty and low operational expenditures, while it generally is accelerated if the decommissioning costs increase over time. Oil and gas companies are facing low output prices and are forced to focus on the development of mature fields. Relevant investment decisions for operators include lifetime-enhancing activities, such as drilling new wells or permanent shutdown. We study the problem of optimal timing of investments in mature oil and gas fields in the presence of price uncertainty, which is an example of a complex real options problem consisting of a portfolio of interdependent options. We formulate a multistage stochastic integer programming model that incorporates a detailed representation of the uncertain oil price, and demonstrate how such a complex real options problem can be efficiently solved using the Stochastic Dual Dynamic Integer Programming algorithm. The paper presents a numerical example based on realistic data and discusses our computational results. We find that only a small number of Markov states are required to represent the uncertain price process, while obtaining convergence of the lower and upper bounds of the objective function. The value of stochastic solution of 11% is considerable in this example. It is concluded that the shutdown decision tends to be postponed as a result of high decommissioning costs, high discount rates, high price uncertainty and low operational expenditures, while it generally is accelerated if the decommissioning costs increase over time. •We show how to solve complex real options problems using stochastic dual dynamic integer programming.•We provide a new problem description for the development of mature offshore oil fields.•We estimate the STLT model using recent data on oil futures.•We find that the shutdown decision gets accelerated if decommissioning costs increase over time. |
| ArticleNumber | 105480 |
| Author | Kleiven, Andreas Bakker, Steffen J. Tomasgard, Asgeir Fleten, Stein-Erik |
| Author_xml | – sequence: 1 givenname: Steffen J. surname: Bakker fullname: Bakker, Steffen J. email: steffen.bakker@ntnu.no – sequence: 2 givenname: Andreas surname: Kleiven fullname: Kleiven, Andreas – sequence: 3 givenname: Stein-Erik surname: Fleten fullname: Fleten, Stein-Erik – sequence: 4 givenname: Asgeir surname: Tomasgard fullname: Tomasgard, Asgeir |
| BookMark | eNp9kMtOwzAQRS1UJMrjA9hZYt0yTpwmhRVCvKQiFsDamjqT1lViF9sp4u9xVBaIBbOZufI9Hs09ZiPrLDF2LmAqQMwuN1Pt_DSDTCRdyAoO2BhyKCaDGP2aj9hxCBtIVWZizD6fMfaeuGuasHbDYFreGGprXtOOWrftyMYr_uranbErjtwTttxto3E28K13y5Y63ofhMUSn1xii0bzuk6v-stglYWykFfnBvfLYdcl7yg4bbAOd_fQT9n5_93b7OFm8PDzd3iwmWgLEST4D2ZTLqkItZpUUoEsCICyLRoqigHKeU4aYNXo-Q6hkJrEguSywyvKlJMhP2MX-37T7o6cQ1cb13qaVKivKuZAgqsFV7l3auxA8NUqbiMOJ0aNplQA1pKw2KqWshpTVPuVEij_k1psO_de_zPWeoXT4zpBXQRuymmrjSUdVO_MP_Q1Ccpg3 |
| CitedBy_id | crossref_primary_10_1007_s12351_025_00932_2 crossref_primary_10_1016_j_ejor_2025_04_005 crossref_primary_10_1016_j_geoen_2024_213472 crossref_primary_10_1016_j_energy_2024_131053 crossref_primary_10_1016_j_geoen_2023_211493 crossref_primary_10_3390_su15118872 crossref_primary_10_3390_pr13010128 crossref_primary_10_3390_gels8020112 crossref_primary_10_3390_inventions8010029 crossref_primary_10_1016_j_eneco_2024_107344 crossref_primary_10_3390_gels11020085 crossref_primary_10_1016_j_energy_2022_125978 crossref_primary_10_1016_j_apenergy_2021_118002 |
| Cites_doi | 10.1016/0165-0572(90)90029-I 10.1023/A:1019284119505 10.1016/j.cor.2018.06.017 10.1016/j.orl.2019.11.002 10.1016/j.petrol.2018.10.049 10.1021/ie970532x 10.2307/2526587 10.1007/BF01589403 10.1007/s10107-018-1249-5 10.1007/BF01582895 10.2118/162862-PA 10.1016/0165-1765(88)90137-1 10.1111/iere.12098 10.1016/0140-9883(88)90023-0 10.1016/j.ejor.2018.05.043 10.1287/mnsc.46.7.893.12034 10.1016/j.ejor.2018.08.001 10.2307/1885541 10.1287/ijoc.2020.0987 10.1016/j.petrol.2004.02.008 10.1109/TSTE.2018.2805164 10.2307/2330286 10.1021/ie8013549 10.1287/opre.47.1.1 10.1016/j.petrol.2019.05.042 10.1016/j.petrol.2014.10.006 10.1287/opre.33.5.989 10.1007/s11081-017-9365-2 10.1007/PL00011398 10.1016/j.compchemeng.2003.10.005 10.1287/opre.46.2.198 10.1007/s10479-009-0600-x 10.1021/ie202959w 10.1023/A:1021860330145 10.1016/j.petrol.2006.10.006 10.1093/rfs/14.1.113 10.1023/A:1018962703587 10.1287/opre.1090.0796 10.1057/palgrave.jors.2600562 10.1002/aic.15209 10.2118/112535-PA |
| ContentType | Journal Article |
| Copyright | 2021 The Authors Copyright Pergamon Press Inc. Dec 2021 |
| Copyright_xml | – notice: 2021 The Authors – notice: Copyright Pergamon Press Inc. Dec 2021 |
| DBID | 6I. AAFTH AAYXX CITATION 7SC 8FD JQ2 L7M L~C L~D |
| DOI | 10.1016/j.cor.2021.105480 |
| DatabaseName | ScienceDirect Open Access Titles Elsevier:ScienceDirect:Open Access CrossRef Computer and Information Systems Abstracts Technology Research Database ProQuest Computer Science Collection Advanced Technologies Database with Aerospace Computer and Information Systems Abstracts Academic Computer and Information Systems Abstracts Professional |
| DatabaseTitle | CrossRef Computer and Information Systems Abstracts Technology Research Database Computer and Information Systems Abstracts – Academic Advanced Technologies Database with Aerospace ProQuest Computer Science Collection Computer and Information Systems Abstracts Professional |
| DatabaseTitleList | Computer and Information Systems Abstracts |
| DeliveryMethod | fulltext_linktorsrc |
| Discipline | Engineering Computer Science Business |
| EISSN | 0305-0548 |
| ExternalDocumentID | 10_1016_j_cor_2021_105480 S0305054821002276 |
| GroupedDBID | --K --M -~X .DC .~1 0R~ 186 1B1 1OL 1RT 1~. 1~5 29F 4.4 457 4G. 5GY 5VS 6I. 6J9 7-5 71M 8P~ 9JN 9JO AAAKF AAAKG AABNK AACTN AAEDT AAEDW AAFJI AAFTH AAIKJ AAKOC AALRI AAOAW AAQXK AARIN AAXKI AAXUO AAYFN AAYOK ABAOU ABBOA ABDPE ABEFU ABFNM ABFRF ABJNI ABMAC ABMMH ABUCO ABWVN ABXDB ACDAQ ACGFO ACGFS ACNCT ACNNM ACRLP ACRPL ACZNC ADBBV ADEZE ADGUI ADJOM ADMUD ADNMO AEBSH AEFWE AEHXG AEIPS AEKER AENEX AFFNX AFJKZ AFKWA AFTJW AGHFR AGUBO AGYEJ AHHHB AHZHX AI. AIALX AIEXJ AIGVJ AIKHN AITUG AJOXV AKRWK ALMA_UNASSIGNED_HOLDINGS AMFUW AMRAJ AOMHK AOUOD APLSM ARUGR ASPBG AVARZ AVWKF AXJTR AZFZN BKOJK BKOMP BLXMC CS3 DU5 EBS EFJIC EJD EO8 EO9 EP2 EP3 FDB FEDTE FGOYB FIRID FNPLU FYGXN G-Q GBLVA GBOLZ HAMUX HVGLF HZ~ H~9 IHE J1W KOM LY1 M41 MHUIS MO0 MS~ O-L O9- OAUVE OZT P-8 P-9 P2P PC. PQQKQ PRBVW Q38 R2- RIG ROL RPZ RXW SDF SDG SDP SDS SES SEW SPC SPCBC SSB SSD SSO SSV SSW SSZ T5K TAE TN5 U5U UAO UPT VH1 WUQ XPP ZMT ~02 ~G- 9DU AATTM AAYWO AAYXX ACLOT ACVFH ADCNI AEUPX AFPUW AGQPQ AIGII AIIUN AKBMS AKYEP ANKPU APXCP CITATION EFKBS EFLBG ~HD 7SC 8FD AGCQF JQ2 L7M L~C L~D |
| ID | FETCH-LOGICAL-c400t-3604f7b88ac168410c7e00ea75f41550793e2aa2fc96a08424a5e4b5a823b4e03 |
| ISICitedReferencesCount | 13 |
| ISICitedReferencesURI | http://www.webofscience.com/api/gateway?GWVersion=2&SrcApp=Summon&SrcAuth=ProQuest&DestLinkType=CitingArticles&DestApp=WOS_CPL&KeyUT=000693669100015&url=https%3A%2F%2Fcvtisr.summon.serialssolutions.com%2F%23%21%2Fsearch%3Fho%3Df%26include.ft.matches%3Dt%26l%3Dnull%26q%3D |
| ISSN | 0305-0548 |
| IngestDate | Wed Aug 13 06:47:25 EDT 2025 Sat Nov 29 03:23:44 EST 2025 Tue Nov 18 22:23:31 EST 2025 Sat Jan 18 16:10:18 EST 2025 |
| IsDoiOpenAccess | true |
| IsOpenAccess | true |
| IsPeerReviewed | true |
| IsScholarly | true |
| Keywords | Mature oil field development Multistage stochastic integer programming SDDiP Real options |
| Language | English |
| License | This is an open access article under the CC BY-NC-ND license. |
| LinkModel | OpenURL |
| MergedId | FETCHMERGED-LOGICAL-c400t-3604f7b88ac168410c7e00ea75f41550793e2aa2fc96a08424a5e4b5a823b4e03 |
| Notes | ObjectType-Article-1 SourceType-Scholarly Journals-1 ObjectType-Feature-2 content type line 14 |
| OpenAccessLink | https://dx.doi.org/10.1016/j.cor.2021.105480 |
| PQID | 2579140180 |
| PQPubID | 45870 |
| ParticipantIDs | proquest_journals_2579140180 crossref_citationtrail_10_1016_j_cor_2021_105480 crossref_primary_10_1016_j_cor_2021_105480 elsevier_sciencedirect_doi_10_1016_j_cor_2021_105480 |
| PublicationCentury | 2000 |
| PublicationDate | 2021-12-01 |
| PublicationDateYYYYMMDD | 2021-12-01 |
| PublicationDate_xml | – month: 12 year: 2021 text: 2021-12-01 day: 01 |
| PublicationDecade | 2020 |
| PublicationPlace | New York |
| PublicationPlace_xml | – name: New York |
| PublicationTitle | Computers & operations research |
| PublicationYear | 2021 |
| Publisher | Elsevier Ltd Pergamon Press Inc |
| Publisher_xml | – name: Elsevier Ltd – name: Pergamon Press Inc |
| References | Bakker, Vrålstad, Tomasgard (b3) 2019; 180 Clarke, Reed (b7) 1990; 12 O’Brien, Sayavedra, Mogollon, Lokhandwala, Lakani (b38) 2016 Babadagli (b1) 2007; 57 Thomson Reuters Eikon (b53) 2020 Dias (b8) 2004; 44 Fleten, Gunnerud, Hem, Svendsen (b14) 2011; 1 Birge (b4) 1985; 33 Tavallali, Karimi, Baxendale (b52) 2016; 62 McDonald, Siegel (b32) 1985; 26 Löhndorf, Shapiro (b27) 2019; 273 Gupta, Grossmann (b17) 2012; 51 Pereira, Pinto (b42) 1991; 52 Sullivan (b50) 1988; 42 Hjelmeland, Zou, Helseth, Ahmed (b20) 2019; 10 Nygreen, Christiansen, Haugen, Bjørkvoll, Kristiansen (b37) 1998; 82 Myers, Majd (b34) 1983; 1462–83 Wallace (b56) 2010 Maier, Pflug, Polak (b30) 2019; In press Maier, Polak, Gann (b31) 2020; 115 Olsen, Stensland (b40) 1988; 26 Harvey (b19) 1990 Lin, Floudas (b26) 2003; 4 Longstaff, Schwartz (b28) 2001; 14 Muehlenbachs (b33) 2015; 56 Zou, Ahmed, Sun (b58) 2019; 175 Pflug (b44) 2001; 89 Dixit, Pindyck (b10) 1994 Jonsbråten (b23) 1998; 49 Norwegian Petroleum Directorate (b35) 2019 Norwegian Petroleum Directorate (b36) 2020 Øia, Aarlott, Vrålstad (b39) 2018 Schwartz, Smith (b46) 2000; 46 Bonini (b5) 1977; 12 Downward, Dowson, Baucke (b11) 2020; 48 Ekern (b13) 1988; 10 Khor, Elkamel, Shah (b24) 2017; 18 Smith, Mccardle (b48) 1999; 47 Vrålstad, Saasen, Fjær, Øia, Ytrehus, Khalifeh (b55) 2019; 173 Lara, Siirola, Grossmann (b25) 2019; In Press Støre, Fleten, Hagspiel, Nunes (b49) 2018; 271 Tarhan, Grossmann, Goel (b51) 2009; 48 Goel, Grossmann (b15) 2004; 28 Paddock, Siegel, Smith (b41) 1988; 103 Iyer, Grossmann (b21) 1998; 5885 Lund (b29) 2000; 99 Bakker (b2) 2020 Goodwin (b16) 2020 Smith, Mccardle (b47) 1998; 46 Dowson, Kapelevich (b12) 2021; 33 Ding, Ahmed (b9) 2019 Vignes, Aadnøy (b54) 2010; 25 Powell (b45) 2007 Jafarizadeh, Bratvold (b22) 2012; 4 Brown, Smith, Sun (b6) 2010; 58 Petroleumsloven (b43) 1996 Gupta, Grossmann (b18) 2014; 124 Wang, de Neufville (b57) 2004 Khor (10.1016/j.cor.2021.105480_b24) 2017; 18 Brown (10.1016/j.cor.2021.105480_b6) 2010; 58 Smith (10.1016/j.cor.2021.105480_b47) 1998; 46 Dias (10.1016/j.cor.2021.105480_b8) 2004; 44 Longstaff (10.1016/j.cor.2021.105480_b28) 2001; 14 Dowson (10.1016/j.cor.2021.105480_b12) 2021; 33 Iyer (10.1016/j.cor.2021.105480_b21) 1998; 5885 Paddock (10.1016/j.cor.2021.105480_b41) 1988; 103 Jonsbråten (10.1016/j.cor.2021.105480_b23) 1998; 49 Wang (10.1016/j.cor.2021.105480_b57) 2004 Downward (10.1016/j.cor.2021.105480_b11) 2020; 48 Vignes (10.1016/j.cor.2021.105480_b54) 2010; 25 O’Brien (10.1016/j.cor.2021.105480_b38) 2016 Ekern (10.1016/j.cor.2021.105480_b13) 1988; 10 Lin (10.1016/j.cor.2021.105480_b26) 2003; 4 Muehlenbachs (10.1016/j.cor.2021.105480_b33) 2015; 56 Pflug (10.1016/j.cor.2021.105480_b44) 2001; 89 Harvey (10.1016/j.cor.2021.105480_b19) 1990 Dixit (10.1016/j.cor.2021.105480_b10) 1994 Petroleumsloven (10.1016/j.cor.2021.105480_b43) 1996 Goodwin (10.1016/j.cor.2021.105480_b16) 2020 Smith (10.1016/j.cor.2021.105480_b48) 1999; 47 Goel (10.1016/j.cor.2021.105480_b15) 2004; 28 Thomson Reuters Eikon (10.1016/j.cor.2021.105480_b53) 2020 Bonini (10.1016/j.cor.2021.105480_b5) 1977; 12 Tavallali (10.1016/j.cor.2021.105480_b52) 2016; 62 Birge (10.1016/j.cor.2021.105480_b4) 1985; 33 Olsen (10.1016/j.cor.2021.105480_b40) 1988; 26 Babadagli (10.1016/j.cor.2021.105480_b1) 2007; 57 Nygreen (10.1016/j.cor.2021.105480_b37) 1998; 82 Gupta (10.1016/j.cor.2021.105480_b17) 2012; 51 Gupta (10.1016/j.cor.2021.105480_b18) 2014; 124 Clarke (10.1016/j.cor.2021.105480_b7) 1990; 12 Jafarizadeh (10.1016/j.cor.2021.105480_b22) 2012; 4 Lund (10.1016/j.cor.2021.105480_b29) 2000; 99 Zou (10.1016/j.cor.2021.105480_b58) 2019; 175 Norwegian Petroleum Directorate (10.1016/j.cor.2021.105480_b35) 2019 Löhndorf (10.1016/j.cor.2021.105480_b27) 2019; 273 Tarhan (10.1016/j.cor.2021.105480_b51) 2009; 48 Bakker (10.1016/j.cor.2021.105480_b3) 2019; 180 Pereira (10.1016/j.cor.2021.105480_b42) 1991; 52 Myers (10.1016/j.cor.2021.105480_b34) 1983; 1462–83 Norwegian Petroleum Directorate (10.1016/j.cor.2021.105480_b36) 2020 Ding (10.1016/j.cor.2021.105480_b9) 2019 Hjelmeland (10.1016/j.cor.2021.105480_b20) 2019; 10 Schwartz (10.1016/j.cor.2021.105480_b46) 2000; 46 Lara (10.1016/j.cor.2021.105480_b25) 2019; In Press Maier (10.1016/j.cor.2021.105480_b30) 2019; In press McDonald (10.1016/j.cor.2021.105480_b32) 1985; 26 Bakker (10.1016/j.cor.2021.105480_b2) 2020 Støre (10.1016/j.cor.2021.105480_b49) 2018; 271 Vrålstad (10.1016/j.cor.2021.105480_b55) 2019; 173 Maier (10.1016/j.cor.2021.105480_b31) 2020; 115 Sullivan (10.1016/j.cor.2021.105480_b50) 1988; 42 Fleten (10.1016/j.cor.2021.105480_b14) 2011; 1 Wallace (10.1016/j.cor.2021.105480_b56) 2010 Powell (10.1016/j.cor.2021.105480_b45) 2007 Øia (10.1016/j.cor.2021.105480_b39) 2018 |
| References_xml | – volume: 51 start-page: 6823 year: 2012 end-page: 6840 ident: b17 article-title: An efficient multiperiod MINLP model for optimal planning of offshore oil and gas field infrastructure publication-title: Ind. Eng. Chem. Res. – volume: 4 start-page: 158 year: 2012 end-page: 170 ident: b22 article-title: Two-factor oil-price model and real option valuation: An example of oilfield abandonment publication-title: SPE Economics Manag. – volume: 273 start-page: 650 year: 2019 end-page: 661 ident: b27 article-title: Modeling time-dependent randomness in stochastic dual dynamic programming publication-title: European J. Oper. Res. – volume: 18 start-page: 907 year: 2017 end-page: 941 ident: b24 article-title: Optimization methods for petroleum fields development and production systems: a review publication-title: Opt. Eng. – year: 2020 ident: b53 article-title: [Ice brent crude futures] – volume: 82 start-page: 251 year: 1998 end-page: 268 ident: b37 article-title: Modeling Norwegian petroleum production and transportation publication-title: Ann. Oper. Res. – volume: 5885 start-page: 1380 year: 1998 end-page: 1397 ident: b21 article-title: Optimal planning and scheduling of offshore oil field infrastructure investment and operations publication-title: Ind. Eng. Chem. Res. – volume: 10 start-page: 481 year: 2019 end-page: 490 ident: b20 article-title: Nonconvex medium-term hydropower scheduling by stochastic dual dynamic integer programming publication-title: IEEE Trans. Sustain. Energy – volume: 180 start-page: 369 year: 2019 end-page: 379 ident: b3 article-title: An optimization model for the planning of offshore plug and abandonment campaigns publication-title: J. Pet. Sci. Eng. – volume: 33 start-page: 989 year: 1985 end-page: 1007 ident: b4 article-title: Decomposition and partitioning methods for multistage stochastic linear programs publication-title: Oper. Res. – volume: 42 start-page: 189 year: 1988 end-page: 200 ident: b50 article-title: The application of mathematical programming methods to oil and gas field development planning publication-title: Math. Program. – volume: 33 start-page: 27 year: 2021 end-page: 33 ident: b12 article-title: SDDP.jl : A julia package for stochastic dual dynamic programming publication-title: INFORMS J. Comput. – volume: 14 start-page: 113 year: 2001 end-page: 147 ident: b28 article-title: Valuing American options by simulation: A simple least-squares approach publication-title: Rev. Financ. Stud. – volume: 103 start-page: 479 year: 1988 end-page: 508 ident: b41 article-title: Option valuation of claims on real assets: The case of offshore petroleum leases publication-title: Q. J. Econ. – volume: 99 start-page: 325 year: 2000 end-page: 349 ident: b29 article-title: Valuing flexibility in offshore petroleum projects publication-title: Ann. Oper. Res. – year: 2020 ident: b36 article-title: Factpages [yearly field production] – volume: 115 year: 2020 ident: b31 article-title: Valuing portfolios of interdependent real options using influence diagrams and simulation-and-regression: A multi-stage stochastic integer programming approach publication-title: Comput. Oper. Res. – volume: 1462–83 start-page: 35 year: 1983 end-page: 38 ident: b34 article-title: Calculating abandonment value using option pricing theory publication-title: Sloan School of Management – volume: 48 start-page: 3078 year: 2009 end-page: 3097 ident: b51 article-title: A multistage stochastic programming approach for the planning of offshore oil or gas field infrastructure under decision dependent uncertainty publication-title: Ind. Eng. Chem. Res. – volume: 4 start-page: 65 year: 2003 end-page: 95 ident: b26 article-title: A novel continuous-time modeling and optimization framework for well platform planning problems publication-title: Opt. Eng. – volume: 12 start-page: 39 year: 1977 end-page: 54 ident: b5 article-title: Capital investment under uncertainty with abandonment options publication-title: The J. Financial Quant. Anal. – volume: 57 start-page: 221 year: 2007 end-page: 246 ident: b1 article-title: Development of mature oil fields - a review publication-title: J. Pet. Sci. Eng. – volume: In press year: 2019 ident: b30 article-title: Valuing portfolios of interdependent real options under exogenous and endogenous uncertainties publication-title: European J. Oper. Res. – volume: 62 start-page: 2586 year: 2016 end-page: 2604 ident: b52 article-title: Process systems engineering perspective on the planning and development of oil fields publication-title: AICHE J. – volume: 56 start-page: 155 year: 2015 end-page: 185 ident: b33 article-title: A dynamic model of cleanup: estimating sunk costs in oil and gas production publication-title: Internat. Econom. Rev. – volume: 1 start-page: 1 year: 2011 end-page: 17 ident: b14 article-title: Real option valuation of offshore petroleum field tie-ins publication-title: J. Real Options – year: 1990 ident: b19 article-title: Forecasting, Structural Time Series Models and the Kalman Filter – volume: 12 start-page: 361 year: 1990 end-page: 382 ident: b7 article-title: Oil-well valuation and abandonment with price and extraction rate uncertain publication-title: Resour. Energy – year: 1994 ident: b10 article-title: Investment under Uncertainty – volume: 44 start-page: 93 year: 2004 end-page: 114 ident: b8 article-title: Valuation of exploration and production assets: An overview of real options models publication-title: J. Pet. Sci. Eng. – volume: 173 start-page: 478 year: 2019 end-page: 491 ident: b55 article-title: Plug & abandonment of offshore wells: ensuring long-term well integrity and cost-efficiency publication-title: J. Pet. Sci. Eng. – volume: 26 start-page: 331 year: 1985 end-page: 349 ident: b32 article-title: Investment and the valuation of firms when there is an option to shut down publication-title: Internat. Econom. Rev. – volume: 46 start-page: 893 year: 2000 end-page: 911 ident: b46 article-title: Short-term variations and long-term dynamics in commodity prices publication-title: Manage. Sci. – volume: In Press year: 2019 ident: b25 article-title: Electric power infrastructure planning under uncertainty: Stochastic dual dynamic integer programming (SDDiP) and parallelization scheme publication-title: Opt. Eng. – year: 2018 ident: b39 article-title: Innovative approaches for full subsea P&A create new opportunities and cost benefits publication-title: SPE Norway One Day Seminar – volume: 175 start-page: 461 year: 2019 end-page: 502 ident: b58 article-title: Stochastic dual dynamic integer programming publication-title: Math. Program. – volume: 46 start-page: 198 year: 1998 end-page: 217 ident: b47 article-title: Valuing oil properties: integrating option pricing and decision analysis approaches publication-title: Oper. Res. – year: 1996 ident: b43 article-title: Lov 21. november 1996 nr. 72 om petroleumsvirksomhet – year: 2020 ident: b2 article-title: MatureFieldDevelopment [Source Code] – volume: 89 start-page: 251 year: 2001 end-page: 271 ident: b44 article-title: Scenario tree generation for multiperiod financial optimization by optimal discretization publication-title: Math. Program. – start-page: 1 year: 2004 end-page: 35 ident: b57 article-title: Building real options into physical systems with stochastic mixed-integer programming publication-title: 8th Real Options Annual International Conference – year: 2019 ident: b9 article-title: A python package for multi-stage stochastic programming – volume: 10 start-page: 91 year: 1988 end-page: 99 ident: b13 article-title: An option pricing approach to evaluating petroleum projects publication-title: Energy Econ. – year: 2016 ident: b38 article-title: Maximizing mature field production - a novel approach to screening mature fields revitalization options publication-title: SPE Europec Featured At 78th EAGE Conference and Exhibition – volume: 271 start-page: 710 year: 2018 end-page: 719 ident: b49 article-title: Switching from oil to gas production in a depleting field publication-title: European J. Oper. Res. – volume: 28 start-page: 1409 year: 2004 end-page: 1429 ident: b15 article-title: A stochastic programming approach to planning of offshore gas field developments under uncertainty in reserves publication-title: Comput. Chem. Eng. – volume: 49 start-page: 811 year: 1998 end-page: 818 ident: b23 article-title: Oil field optimization under price uncertainty publication-title: J. Oper. Res. Soc. – volume: 124 start-page: 180 year: 2014 end-page: 197 ident: b18 article-title: Multistage stochastic programming approach for offshore oilfield infrastructure planning under production sharing agreements and endogenous uncertainties publication-title: J. Pet. Sci. Eng. – year: 2019 ident: b35 article-title: Annual status report 2019 for fields in production (ASR2019) – volume: 52 start-page: 359 year: 1991 end-page: 375 ident: b42 article-title: Multi-stage stochastic optimization applied to energy planning publication-title: Math. Program. – volume: 58 start-page: 785 year: 2010 end-page: 801 ident: b6 article-title: Information relaxations and duality in stochastic dynamic programs publication-title: Oper. Res. – start-page: 3 year: 2010 end-page: 8 ident: b56 article-title: Stochastic programming and the option of doing it differently publication-title: Ann. Oper. Res. – volume: 48 start-page: 33 year: 2020 end-page: 39 ident: b11 article-title: Stochastic dual dynamic programming with stagewise dependent objective uncertainty publication-title: Oper. Res. Lett. – volume: 26 start-page: 215 year: 1988 end-page: 218 ident: b40 article-title: Optimal shutdown decisions in resource extraction publication-title: Econom. Lett. – year: 2020 ident: b16 article-title: Schwartz-smith 2-factor model - parameter estimation – volume: 47 start-page: 1 year: 1999 end-page: 15 ident: b48 article-title: Options in the real world: Lessons learned in evaluating oil and gas investments publication-title: Oper. Res. – volume: 25 start-page: 145 year: 2010 end-page: 150 ident: b54 article-title: Well-integrity issues offshore Norway publication-title: SPE Product. Operations – year: 2007 ident: b45 article-title: Approximate Dynamic Programming: Solving the Curses of Dimensionality (Wiley Series in Probability and Statistics) – volume: 12 start-page: 361 year: 1990 ident: 10.1016/j.cor.2021.105480_b7 article-title: Oil-well valuation and abandonment with price and extraction rate uncertain publication-title: Resour. Energy doi: 10.1016/0165-0572(90)90029-I – year: 2018 ident: 10.1016/j.cor.2021.105480_b39 article-title: Innovative approaches for full subsea P&A create new opportunities and cost benefits – volume: 99 start-page: 325 issue: 1–4 year: 2000 ident: 10.1016/j.cor.2021.105480_b29 article-title: Valuing flexibility in offshore petroleum projects publication-title: Ann. Oper. Res. doi: 10.1023/A:1019284119505 – volume: 115 year: 2020 ident: 10.1016/j.cor.2021.105480_b31 article-title: Valuing portfolios of interdependent real options using influence diagrams and simulation-and-regression: A multi-stage stochastic integer programming approach publication-title: Comput. Oper. Res. doi: 10.1016/j.cor.2018.06.017 – year: 2019 ident: 10.1016/j.cor.2021.105480_b9 – volume: 48 start-page: 33 issue: 1 year: 2020 ident: 10.1016/j.cor.2021.105480_b11 article-title: Stochastic dual dynamic programming with stagewise dependent objective uncertainty publication-title: Oper. Res. Lett. doi: 10.1016/j.orl.2019.11.002 – volume: 173 start-page: 478 year: 2019 ident: 10.1016/j.cor.2021.105480_b55 article-title: Plug & abandonment of offshore wells: ensuring long-term well integrity and cost-efficiency publication-title: J. Pet. Sci. Eng. doi: 10.1016/j.petrol.2018.10.049 – volume: 5885 start-page: 1380 issue: 97 year: 1998 ident: 10.1016/j.cor.2021.105480_b21 article-title: Optimal planning and scheduling of offshore oil field infrastructure investment and operations publication-title: Ind. Eng. Chem. Res. doi: 10.1021/ie970532x – year: 2020 ident: 10.1016/j.cor.2021.105480_b36 – volume: 1 start-page: 1 year: 2011 ident: 10.1016/j.cor.2021.105480_b14 article-title: Real option valuation of offshore petroleum field tie-ins publication-title: J. Real Options – volume: 26 start-page: 331 issue: 2 year: 1985 ident: 10.1016/j.cor.2021.105480_b32 article-title: Investment and the valuation of firms when there is an option to shut down publication-title: Internat. Econom. Rev. doi: 10.2307/2526587 – year: 2016 ident: 10.1016/j.cor.2021.105480_b38 article-title: Maximizing mature field production - a novel approach to screening mature fields revitalization options – volume: 42 start-page: 189 year: 1988 ident: 10.1016/j.cor.2021.105480_b50 article-title: The application of mathematical programming methods to oil and gas field development planning publication-title: Math. Program. doi: 10.1007/BF01589403 – volume: 1462–83 start-page: 35 year: 1983 ident: 10.1016/j.cor.2021.105480_b34 article-title: Calculating abandonment value using option pricing theory – volume: 175 start-page: 461 issue: 1–2 year: 2019 ident: 10.1016/j.cor.2021.105480_b58 article-title: Stochastic dual dynamic integer programming publication-title: Math. Program. doi: 10.1007/s10107-018-1249-5 – volume: 52 start-page: 359 issue: 1–3 year: 1991 ident: 10.1016/j.cor.2021.105480_b42 article-title: Multi-stage stochastic optimization applied to energy planning publication-title: Math. Program. doi: 10.1007/BF01582895 – year: 1994 ident: 10.1016/j.cor.2021.105480_b10 – year: 2020 ident: 10.1016/j.cor.2021.105480_b53 – volume: In press year: 2019 ident: 10.1016/j.cor.2021.105480_b30 article-title: Valuing portfolios of interdependent real options under exogenous and endogenous uncertainties publication-title: European J. Oper. Res. – volume: 4 start-page: 158 issue: 3 year: 2012 ident: 10.1016/j.cor.2021.105480_b22 article-title: Two-factor oil-price model and real option valuation: An example of oilfield abandonment publication-title: SPE Economics Manag. doi: 10.2118/162862-PA – volume: 26 start-page: 215 year: 1988 ident: 10.1016/j.cor.2021.105480_b40 article-title: Optimal shutdown decisions in resource extraction publication-title: Econom. Lett. doi: 10.1016/0165-1765(88)90137-1 – volume: 56 start-page: 155 issue: 1 year: 2015 ident: 10.1016/j.cor.2021.105480_b33 article-title: A dynamic model of cleanup: estimating sunk costs in oil and gas production publication-title: Internat. Econom. Rev. doi: 10.1111/iere.12098 – volume: 10 start-page: 91 issue: 2 year: 1988 ident: 10.1016/j.cor.2021.105480_b13 article-title: An option pricing approach to evaluating petroleum projects publication-title: Energy Econ. doi: 10.1016/0140-9883(88)90023-0 – year: 1990 ident: 10.1016/j.cor.2021.105480_b19 – volume: 271 start-page: 710 issue: 2 year: 2018 ident: 10.1016/j.cor.2021.105480_b49 article-title: Switching from oil to gas production in a depleting field publication-title: European J. Oper. Res. doi: 10.1016/j.ejor.2018.05.043 – volume: 46 start-page: 893 issue: 7 year: 2000 ident: 10.1016/j.cor.2021.105480_b46 article-title: Short-term variations and long-term dynamics in commodity prices publication-title: Manage. Sci. doi: 10.1287/mnsc.46.7.893.12034 – volume: 273 start-page: 650 issue: 2 year: 2019 ident: 10.1016/j.cor.2021.105480_b27 article-title: Modeling time-dependent randomness in stochastic dual dynamic programming publication-title: European J. Oper. Res. doi: 10.1016/j.ejor.2018.08.001 – volume: 103 start-page: 479 issue: 3 year: 1988 ident: 10.1016/j.cor.2021.105480_b41 article-title: Option valuation of claims on real assets: The case of offshore petroleum leases publication-title: Q. J. Econ. doi: 10.2307/1885541 – volume: 33 start-page: 27 issue: 1 year: 2021 ident: 10.1016/j.cor.2021.105480_b12 article-title: SDDP.jl : A julia package for stochastic dual dynamic programming publication-title: INFORMS J. Comput. doi: 10.1287/ijoc.2020.0987 – volume: 44 start-page: 93 issue: 1–2 year: 2004 ident: 10.1016/j.cor.2021.105480_b8 article-title: Valuation of exploration and production assets: An overview of real options models publication-title: J. Pet. Sci. Eng. doi: 10.1016/j.petrol.2004.02.008 – volume: 10 start-page: 481 issue: 1 year: 2019 ident: 10.1016/j.cor.2021.105480_b20 article-title: Nonconvex medium-term hydropower scheduling by stochastic dual dynamic integer programming publication-title: IEEE Trans. Sustain. Energy doi: 10.1109/TSTE.2018.2805164 – volume: 12 start-page: 39 issue: 1 year: 1977 ident: 10.1016/j.cor.2021.105480_b5 article-title: Capital investment under uncertainty with abandonment options publication-title: The J. Financial Quant. Anal. doi: 10.2307/2330286 – volume: 48 start-page: 3078 year: 2009 ident: 10.1016/j.cor.2021.105480_b51 article-title: A multistage stochastic programming approach for the planning of offshore oil or gas field infrastructure under decision dependent uncertainty publication-title: Ind. Eng. Chem. Res. doi: 10.1021/ie8013549 – volume: 47 start-page: 1 issue: 1 year: 1999 ident: 10.1016/j.cor.2021.105480_b48 article-title: Options in the real world: Lessons learned in evaluating oil and gas investments publication-title: Oper. Res. doi: 10.1287/opre.47.1.1 – volume: 180 start-page: 369 year: 2019 ident: 10.1016/j.cor.2021.105480_b3 article-title: An optimization model for the planning of offshore plug and abandonment campaigns publication-title: J. Pet. Sci. Eng. doi: 10.1016/j.petrol.2019.05.042 – year: 2020 ident: 10.1016/j.cor.2021.105480_b2 – year: 2007 ident: 10.1016/j.cor.2021.105480_b45 – volume: 124 start-page: 180 year: 2014 ident: 10.1016/j.cor.2021.105480_b18 article-title: Multistage stochastic programming approach for offshore oilfield infrastructure planning under production sharing agreements and endogenous uncertainties publication-title: J. Pet. Sci. Eng. doi: 10.1016/j.petrol.2014.10.006 – volume: 33 start-page: 989 issue: 5 year: 1985 ident: 10.1016/j.cor.2021.105480_b4 article-title: Decomposition and partitioning methods for multistage stochastic linear programs publication-title: Oper. Res. doi: 10.1287/opre.33.5.989 – volume: 18 start-page: 907 issue: 4 year: 2017 ident: 10.1016/j.cor.2021.105480_b24 article-title: Optimization methods for petroleum fields development and production systems: a review publication-title: Opt. Eng. doi: 10.1007/s11081-017-9365-2 – volume: 89 start-page: 251 year: 2001 ident: 10.1016/j.cor.2021.105480_b44 article-title: Scenario tree generation for multiperiod financial optimization by optimal discretization publication-title: Math. Program. doi: 10.1007/PL00011398 – volume: 28 start-page: 1409 issue: 8 year: 2004 ident: 10.1016/j.cor.2021.105480_b15 article-title: A stochastic programming approach to planning of offshore gas field developments under uncertainty in reserves publication-title: Comput. Chem. Eng. doi: 10.1016/j.compchemeng.2003.10.005 – volume: 46 start-page: 198 issue: 2 year: 1998 ident: 10.1016/j.cor.2021.105480_b47 article-title: Valuing oil properties: integrating option pricing and decision analysis approaches publication-title: Oper. Res. doi: 10.1287/opre.46.2.198 – volume: In Press year: 2019 ident: 10.1016/j.cor.2021.105480_b25 article-title: Electric power infrastructure planning under uncertainty: Stochastic dual dynamic integer programming (SDDiP) and parallelization scheme publication-title: Opt. Eng. – start-page: 1 year: 2004 ident: 10.1016/j.cor.2021.105480_b57 article-title: Building real options into physical systems with stochastic mixed-integer programming – year: 1996 ident: 10.1016/j.cor.2021.105480_b43 – start-page: 3 year: 2010 ident: 10.1016/j.cor.2021.105480_b56 article-title: Stochastic programming and the option of doing it differently publication-title: Ann. Oper. Res. doi: 10.1007/s10479-009-0600-x – year: 2019 ident: 10.1016/j.cor.2021.105480_b35 – volume: 51 start-page: 6823 issue: 19 year: 2012 ident: 10.1016/j.cor.2021.105480_b17 article-title: An efficient multiperiod MINLP model for optimal planning of offshore oil and gas field infrastructure publication-title: Ind. Eng. Chem. Res. doi: 10.1021/ie202959w – volume: 4 start-page: 65 issue: 1/2 year: 2003 ident: 10.1016/j.cor.2021.105480_b26 article-title: A novel continuous-time modeling and optimization framework for well platform planning problems publication-title: Opt. Eng. doi: 10.1023/A:1021860330145 – volume: 57 start-page: 221 issue: 3–4 year: 2007 ident: 10.1016/j.cor.2021.105480_b1 article-title: Development of mature oil fields - a review publication-title: J. Pet. Sci. Eng. doi: 10.1016/j.petrol.2006.10.006 – year: 2020 ident: 10.1016/j.cor.2021.105480_b16 – volume: 14 start-page: 113 issue: 1 year: 2001 ident: 10.1016/j.cor.2021.105480_b28 article-title: Valuing American options by simulation: A simple least-squares approach publication-title: Rev. Financ. Stud. doi: 10.1093/rfs/14.1.113 – volume: 82 start-page: 251 year: 1998 ident: 10.1016/j.cor.2021.105480_b37 article-title: Modeling Norwegian petroleum production and transportation publication-title: Ann. Oper. Res. doi: 10.1023/A:1018962703587 – volume: 58 start-page: 785 issue: 4-part-1 year: 2010 ident: 10.1016/j.cor.2021.105480_b6 article-title: Information relaxations and duality in stochastic dynamic programs publication-title: Oper. Res. doi: 10.1287/opre.1090.0796 – volume: 49 start-page: 811 issue: 8 year: 1998 ident: 10.1016/j.cor.2021.105480_b23 article-title: Oil field optimization under price uncertainty publication-title: J. Oper. Res. Soc. doi: 10.1057/palgrave.jors.2600562 – volume: 62 start-page: 2586 issue: 8 year: 2016 ident: 10.1016/j.cor.2021.105480_b52 article-title: Process systems engineering perspective on the planning and development of oil fields publication-title: AICHE J. doi: 10.1002/aic.15209 – volume: 25 start-page: 145 issue: 2 year: 2010 ident: 10.1016/j.cor.2021.105480_b54 article-title: Well-integrity issues offshore Norway publication-title: SPE Product. Operations doi: 10.2118/112535-PA |
| SSID | ssj0000721 |
| Score | 2.4577785 |
| Snippet | Oil and gas companies are facing low output prices and are forced to focus on the development of mature fields. Relevant investment decisions for operators... |
| SourceID | proquest crossref elsevier |
| SourceType | Aggregation Database Enrichment Source Index Database Publisher |
| StartPage | 105480 |
| SubjectTerms | Algorithms Decommissioning Expenditures Integer programming Mature oil field development Multistage stochastic integer programming Oil fields Operations research Real options SDDiP Shutdowns Uncertainty Upper bounds |
| Title | Mature offshore oil field development: Solving a real options problem using stochastic dual dynamic integer programming |
| URI | https://dx.doi.org/10.1016/j.cor.2021.105480 https://www.proquest.com/docview/2579140180 |
| Volume | 136 |
| WOSCitedRecordID | wos000693669100015&url=https%3A%2F%2Fcvtisr.summon.serialssolutions.com%2F%23%21%2Fsearch%3Fho%3Df%26include.ft.matches%3Dt%26l%3Dnull%26q%3D |
| hasFullText | 1 |
| inHoldings | 1 |
| isFullTextHit | |
| isPrint | |
| journalDatabaseRights | – providerCode: PRVESC databaseName: Elsevier SD Freedom Collection Journals 2021 customDbUrl: eissn: 0305-0548 dateEnd: 99991231 omitProxy: false ssIdentifier: ssj0000721 issn: 0305-0548 databaseCode: AIEXJ dateStart: 19950101 isFulltext: true titleUrlDefault: https://www.sciencedirect.com providerName: Elsevier |
| link | http://cvtisr.summon.serialssolutions.com/2.0.0/link/0/eLvHCXMwtV1Nb9NAEF2FFiE48BFAFAraA70QWfLHOl5zC5CIjxAqJUW5rdabdZoS7GCnpT-Rn8WOd9dxoxLBgYtl2XES5b3Mjsdv3iD0MpQBZP3CEd2UOMQX0qHpTDhEJN04dSX1qlL212E0GtHpND5utX7ZXpiLZZRl9PIyXv1XqNUxBTa0zv4D3PWbqgNqX4Gutgp2tf0r4D9XVp3gDVGe5rCzWHYqnZptkLL1wHG-rKoJvFOAu3Cu5S0dM2Kmc17qUkMuTjmYOXeqrq2ZnmCvbSZkYfVd3-0KaE0PzLCIsqJWvpKFkdwZc6G6CP2GfzO6jvEatCXZ5jnVp6WEUFzLLnnZJJs-MYZhnY4K5nXD0QQET3OuFfu9ci4XRbOy4XtbKpFjWcxh4pIWo1zVhUKYclS2qUO3vOaYDe5BMzx71y4aun5xpjAHg1jfg9nHRM-XumrQPfrCBifDIZv0p5OjYLD64cD0MnjKfxS800y6gfb9KIxVfN3vfehPP26ygqjqAay_pH3CXmkNtz75TznSVrZQpUCT--iuuXfBPc25B6glsza6ZVsn2uieRR2bFaON7jT8Lh-in5qb2HITK27iipu4wc3X2DATcwzMxIaZ2DATV8zEG2ZiYCY2zMSGmbjBzEfoZNCfvH3vmMkfjlBrytoJui5Jo4RSLrwuJZ4rIum6kkdhCgkwmDpKn3M_FXGXu5T4hIeSJCGnfpAQ6QaP0V6WZ_IJwlLdMgfhTAS-G5M0oTyQMUxcT-lM8JmfHCDX_tZMGFt8mM6yZFb_eMYUPAzgYRqeA_SqvmSlPWF2vZhYAJlJanWyyhT9dl12aMFmJriUTC2vMRREqPt09-ln6PbmD3WI9tbFuXyOboqL9aIsXhhq_gatc86a |
| linkProvider | Elsevier |
| openUrl | ctx_ver=Z39.88-2004&ctx_enc=info%3Aofi%2Fenc%3AUTF-8&rfr_id=info%3Asid%2Fsummon.serialssolutions.com&rft_val_fmt=info%3Aofi%2Ffmt%3Akev%3Amtx%3Ajournal&rft.genre=article&rft.atitle=Mature+offshore+oil+field+development%3A+Solving+a+real+options+problem+using+stochastic+dual+dynamic+integer+programming&rft.jtitle=Computers+%26+operations+research&rft.au=Bakker%2C+Steffen+J&rft.au=Kleiven%2C+Andreas&rft.au=Fleten%2C+Stein-Erik&rft.au=Tomasgard%2C+Asgeir&rft.date=2021-12-01&rft.pub=Pergamon+Press+Inc&rft.issn=0305-0548&rft.eissn=0305-0548&rft.volume=136&rft.spage=1&rft_id=info:doi/10.1016%2Fj.cor.2021.105480&rft.externalDBID=NO_FULL_TEXT |
| thumbnail_l | http://covers-cdn.summon.serialssolutions.com/index.aspx?isbn=/lc.gif&issn=0305-0548&client=summon |
| thumbnail_m | http://covers-cdn.summon.serialssolutions.com/index.aspx?isbn=/mc.gif&issn=0305-0548&client=summon |
| thumbnail_s | http://covers-cdn.summon.serialssolutions.com/index.aspx?isbn=/sc.gif&issn=0305-0548&client=summon |