Gone are the days when simply finding oil and producing it were sufficient to achieve wealth and fame. The oil man can no longer make money in spite of himself. Investors demand that sound business decisions be made. This can only be accomplished if a thorough and credible assessment of uncertainty is included in the decision process.

The industry has long recognized and in many cases analyzed the uncertainties in the physical aspects of a project. However, investment decision must also recognize the economic uncertainties associated with the project. Therefore, such economic factors as oil price should be forecasted in terms of an appropriate range of confidence and evaluated together with the other uncertain project variables. It is this recognition of uncertainty that gives credibility to forecasting and planning activities. This paper will emphasizes three ways in which credibility can be established, Communication of uncertainty and Insight.

You can access this article if you purchase or spend a download.