From Uncertainty Quantification to Decision Making in the Oil and Gas Industry

Abstract

In this paper, we present the findings of a large (N = 494) survey of oil and gas professionals that addressed the following two questions: Has uncertainty quantification improved in the oil and gas industry over the last five years? Has this improvement translated into improved decision making? Our results suggest that the answer to the first question in an unequivocal “yes,” but that the answer to the second is qualified “no.” How could this be? Uncertainty quantification is not an end unto itself; removing or even reducing uncertainty is not the goal. Rather, the objective is to make a good decision, which in many cases requires the assessment of the relevant uncertainties. The oil and gas industry seems to have lost sight of this goal in its good-faith effort to provide decision makers with a richer understanding of the possible outcomes flowing from major decisions. The industry implicitly believes that making good decisions merely requires more information. To counter this, we present a decision-focused uncertainty quantification framework, which we hope, in combination with our survey results, will aid in the innovation of better decision-making tools and methodologies.

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