Talk abstract:

Make Decisions Using Stochastic Models

Lars Holden
Research Director/Forskningssjef
Norwegian Computing Center/Norsk Regnesentral
P.O.Box 114 Blindern
N-0134 Oslo, Norway
http://www.nr.no/~holden/
Lars.Holden@nr.no

Joint work with P. Abrahamsen, A.-L. Hektoen, H. H. Soleng and A.R. Syversveen.

The ultimate aim of stochastic modelling in reservoir evaluation is making better decisions. The paper illustrates how stochastic models may be used in enhancing decision making. In order to quantify the decision making, it is necessary to formulate an object function. The optimal decision is the decision that maximises the object function. The objective function should include the most important aspect of the decision including expenses if necessary. Since the decision is made under uncertainty, it is also necessary to specify whether one maximises the expected value of the object function, the probability for the object function to be larger than a particular value or another specified quantity. This is illustrated in several examples. For some of the examples it is possible to perform a thorough evaluation. In other examples time is the most crucial limitation. In all the examples it is defined an objective function. Then the function is quantified within the constraint in the project.

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