Meet the Expert
Professor and Director - Division of Economics and Business, Colorado School of Mines
- Professor and Director of the Division of Economics and Business at the Colorado School of Mines specializing in the areas of strategic decision making, business strategy, and risk management, with a particular emphasis on applications in the petroleum sector.
- Main research interests are in the areas of petroleum valuation, corporate risk management, and the integration of decision analysis and portfolio management in the corporate context.
- Relying on technical developments in the areas of decision analysis, finance and business strategy. provides clients with the ability to improve their decision quality and create value.
- Clients include: Amoco, Anadarko Petroleum, BP Exploration, Cabot Oil and Gas, ExxonMobil, Hess Corporation, Occidental Petroleum, Penn-Virginia Oil Company, Petrobras Petroleos Brasiliero, Phillips Petroleum, Schlumberger, Texaco
Session Packages from $600
Your Expert Package Includes:
- All 9 Best Practices
- Pre-Call Discovery Process
- One-on-One Call with Expert
- Session Summary Report
- Post-Session Engagement
Risks & Opportunities
RisksCompanies that do not utilize probablilistic techniques can expect a number of negative outcomes.
- Inconsistent decision making results in irregular financial returns, and leads to shareholder dissatisfaction.
- Deterministic thinking obscures key risks associated with a venture, leading to poor business choices.
- The lack of systematic value of information assessment leads to hundreds of millions in chronic overspending for seismic data.
- An incomplete assessment of critical factors in a bidding situation results in substantial over-bidding or under-bidding.
- The firm is over-exposed to certain types of risk while missing out on opportunities that could help balance their portfolio.
- The inability to do simulation and sensitivity analysis leaves a firm with no understanding of a venture's possible outcome, or of the key factors driving the deal.
- A firm's inability to accommodate multiple objectives leaves it focused on priorities that may not actually be relevant.
- The firm never knows how much risk to take in a joint venture.
- The company has no way to assess or track its risk-taking or its risk tolerance.
OpportunitiesBy making probabilistic analysis a standard part of their decision making, companies can expect to benefit in a number of ways.
- The decision makers within a firm develop a better understanding and communication about risk across all divisions.
- Advanced decision-making techniques help the firm to optimize strategies that minimize risk and increase profit on all ventures.
- Expensive seismic information is purchased at the appropriate value.
- A balanced portfolio generates consistent profits and keeps the shareholders happy.
- The company regularly wins bids without leaving any significant money on the table.
- Through simulation and sensitivity analysis, the firm is able to identify a range of possible outcomes and where to focus energy to mitigate risk.
- Using multiple objective analysis, the company can understand complicated opportunites and where to make the appropriate trade-offs.
Risk Management and Strategic Decision Making for the Petroleum Industry: Risks & Opportunities