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Petroleum exploration is a costly venture that always involves much uncertainty and many unknown factors. A decision to drill could result in a giant discovery, a modest discovery, or a dry hole.
Using experts' judgments and the available information on a geologic formation, we estimate the volume of recoverable oil in a given reservoir by a method called the analytic hierarchy process (AHP).
AHP is a mathematically based modeling tool that allows an analyst to derive priorities for a set of alternatives by simple pairwise comparisons. The setting of priorities involves the solution of an eigenvalue problem in the inverse matrix of pairwise comparisons. The factors are grouped on different levels, forming a chain or hierarchy, whereby the lower level elements can be compared in pairwise matrices with respect to the next level. A process of weighting yields the overall priorities for any level, but in particular for those in the lowest level.
The factors affecting the decision are assigned numerical values using judgments of geologists and petroleum engineers. The probabilities of the outcomes are determined and the "expected value" of each decision is computed. The results of the study indicate that, when good judgments are used, one can obtain an excellent estimate of the volume of recoverable oil in a reservoir in a very short time and with the least amount of physical and financial resources.
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