You are invited to the seminar on “Uncertainty and Decision – Making” which will be organized with the details below:
Date : 12 December 2011, from 8:00 am to 17:00 pm
Venue : informed later
Content : Please see the attachment
Presenter : Prof. Steve Begg – Australian School of Petroleum, University of Adelaide
Organizer : Faculty of Geology and Petroleum Engineering – HCMUT
R.S.V. P : 16:00 pm, 7 December 2011
Fee : No charge
Please confirm your participation with us via E-mail: email@example.com or call us at (08) 3865 4183. Should you have any inquiries, please feel free to contact us for further support.
About the lecturer:
Prof. Steve Begg: Professor of Petroleum Engineering and Management and Head of the Australian School of Petroleum at The University of Adelaide, where he specializes in tools and processes for improved business performance. His focus is on asset and portfolio economic evaluation and decision-making under uncertainty, including psychological and judgmental factors in eliciting expert opinions and uncertainty assessment.
Before joining The University of Adelaide in 2002, Steve was Director for Decision Science and Strategic Planning with Landmark Graphics Corporation where he was responsible for leading improved economic evaluation and decision-making for both Landmark and its customers. Prior to that, he worked for BP for 13 years, the last 6 of which were spent in a variety of senior geo-science and engineering operational assignments in Alaska, which spanned production forecasting, economic evaluation, petroleum engineering and reservoir characterization roles. He also spent seven years as a researcher and Project Manager with BP Research, where his focus was on risk and uncertainty assessment related to reservoir modeling.
Steve is a frequent speaker at industry conferences and events. In 2003 he was a Society of Petroleum Engineer’s Distinguished Lecturer on the topic “I would rather be vaguely right than precisely wrong – a new approach to investment decision-making” and in 2000 he chaired an SPE Forum on the topic of “Adding Value by Leveraging Risk, Options and Portfolio Management”. In 2010-11 he was again a Distinguished Lecturer on “Reliability of Expert Judgements and Uncertainty Assessments”. Steve has published numerous papers on topics such as investment evaluation, optimal decision-making and stochastic reservoir modeling. He co-authored a book, Making Good Decisions, commissioned by the SPE.
Steve holds a PhD degree in Geophysics and a BSc degree in Geological Geophysics from Reading University and has taken a variety of executive education courses at MIT and University of Texas.
School of Petroleum, University of Adelaide
UNCERTAINTY AND DECISION – MAKING
Course Outline & Objectives
Making decisions to yield optimal returns on the allocation of human and financial resources is a key component of most technical and managerial jobs. The Oil and Gas business revolves around making decisions in uncertain situations, often of a complex nature, whose consequences are not immediately obvious and which must be made with incomplete information and within time & budget constraints. The failure of many decisions to return the value expected, or possible, suggests that the current ways of making decisions are no longer sufficient, if they ever were. Like many other spheres, good decision-making abilities do not arise from “natural talent”, but from learning and developing a set of skills, honed by experience.
Some parts of the industry have adopted formal, quantitative methods (e.g. probability theory, expected monetary value, Monte Carlo simulation, decision trees, VoI, etc) for dealing with decisions under uncertainty. However, little attention has been paid to the requirement that the users of these methods are entirely rational and perfect information processors under uncertainty. But our heads are just not wired for uncertainty! Years of behavioral research on how people deal with uncertainty have unearthed a variety of biases, cognitive limitations, and error-prone heuristics leading to value-destroying decisions. Furthermore, the reward (or penalty) systems of most organizations often tend to encourage or magnify these undesirable effects!
The first part of this course will explore biases and heuristics that are particularly pertinent to the oil and gas industry and show how a cognitive perspective can offer practical suggestions for avoiding them. Although the topic is a serious one, elements of the course will be light-hearted and should be approached with a sense of fun and participation.
The second part of the course will focus on how to make good decisions. Attendees will learn a practical methodology (consisting of process & tools) that is designed to address a common set of factors that make decisions hard. The methodology is entirely scalable in that its principles can be implemented within a few minutes or over the course of months or a few years, depending on the nature of the decision. The roles of particular tools (e.g. decision-trees, Monte Carlo simulation, strategy/scenario analysis, etc.) in implementing the methodology will be identified, but the tools themselves will not be taught. Attendees will take away some simple ideas & spreadsheet tools that will help with their work and personal decision-making. Topics to be covered will be:
- Decisions & Uncertainty in Business Context
– Industry performance
– Short questionnaire (questions will be answered during next session)
- Reliability of Expert Judgments and Uncertainty Assessments
– Understanding the nature of uncertainty/knowledge and how it can be quantified
– Visual, probability and cognitive illusions
– Experts, uncertainty and risk attitudes
- Introduction to Decision-Making
– Easy/Hard decisions, Decision Elements, Good/Bad Decisions,
- Multi-objective decision-making methodology
– Structuring/Framing the decision situation
– Evaluating/ Modeling the decision
– Assessing & Deciding
- Assessing decision quality