About This Item
- Full TextFull Text(subscription required)
- Pay-Per-View PurchasePay-Per-View
Purchase Options Explain
Share This Item
The AAPG/Datapages Combined Publications Database
AAPG Bulletin
Abstract
DOI: 10.1306/05061918128
Randomness, serendipity, and luck in petroleum
exploration![Next Hit](/data/images/arrow_right.gif)
![Previous Hit](/data/images/arrow_left.gif)
![Next Hit](/data/images/arrow_right.gif)
Alexei V. Milkov,1 and William C. Navidi2
1Department of Geology and Geological Engineering, Colorado School of Mines, Golden, Colorado; [email protected]
2Department of Applied Mathematics and Statistics, Colorado School of Mines, Golden, Colorado; [email protected]
ABSTRACT
Petroleum explorers commonly acknowledge the contribution of luck in exploration
outcomes. Our survey of 237 current industry practitioners revealed that 90% of them believe that luck affects the outcome of
exploration
projects. However, luck has never been quantified before as a factor in petroleum
exploration
, and therefore, it remains an abstract concept that is not deeply considered by geoscientists and
exploration
managers. Luck clearly exists in petroleum
exploration
, because it contributed to many serendipitously discovered plays and pools. Luck is also a factor in the relative performance of different
exploration
companies. Looking at companies exploring on the Norwegian Continental Shelf in 1966–2005, we concluded that differences in success rates of individual companies are essentially random. Using a global data set of 3258 conventional
exploration
wells in which 733 companies took 8096 equity positions in 2008–2017, we calculated that the proportion of variance in geological success rates among the companies is 39% attributable to luck (25% for commercial success), the rest being related to skill. In frontier plays, luck contribution to the variation in geological and commercial success rates between different companies is 100%. The factor of luck is relatively less in emerging (67% for geological success), maturing (38%), and mature (29%) plays. Recognizing that luck is a part of the
exploration
success equation has numerous implications for
exploration
strategies, investors, companies, managers, and individual explorers. The factor of luck can be reduced only through a sustainable long-term
exploration
program with numerous independent wells. Explorers should focus on developing their prediction skills rather than obsess about the binary outcomes of each well.
Pay-Per-View Purchase Options
The article is available through a document delivery service. Explain these Purchase Options.
Watermarked PDF Document: $14 | |
Open PDF Document: $24 |
AAPG Member?
Please login with your Member username and password.
Members of AAPG receive access to the full AAPG Bulletin Archives as part of their membership. For more information, contact the AAPG Membership Department at [email protected].