A computer model has been constructed and usedfor strategic planning in an integrated oil and gas company. The model contains representations ofopportunities in exploration, drilling, producingplant, and other types of exploration and production investments. The user specifies alternative strategies and alternative economic scenarios, anduses the model to examine the consequences of these strategies.

Examples are shown of the use of the model to calculate present worth, profit effects, and cashflows for two different economic environments, with a strategy designed to maximize present worth. The consequences of misunderstanding the future economic environment are examined. Other types of model uses which have proven useful are reviewed and summarized.

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