Strategic Decision Making in the Upstream Oil and Gas Industry: Exploring Intuition and Analysis

Abstract

TX 75083-3836, U.S.A., fax 01-972-952-9435. AbstractThis paper reports on research examining established decisionmaking in the Upstream Oil and Gas Industry. Two important aspects of the strategic decision making process are highlighted. The main emphasis is on exploring the often neglected intuitive (or non-analytical aspects) of the process although the analytical aspects will also be highlighted and both aspects will be considered in combination. As a means of comparison across companies, companies will then be grouped into different typologies based on the different emphases they place on the intuitive/ analytical aspects. Finally, a model of strategic decision making will be presented which integrates various aspects of the decision making process a . This research is based on analysing the information derived from fifty three face-toface interviews with individuals working in the UKCS and in Australia who had knowledge of the strategic decision-making process. Eleven operators and one contractor were involved in the study. Initially, open-ended interviews were conducted and this was later followed by semi-structured in-depth interviews. A grounded theory approach was used to analyse the results. Ultimately, it is hoped that the research will be of interest to companies who wish to increase the transparency and their understanding of the strategic decision making process. It will also help companies both to recognise and accrue the valuable contribution of both intuition and analysis in strategic decision making. It is also suggested that although the intuitive aspects may be less visible and widely acknowledged due to their tacitness, difficulty in being codified and communicated, under certain 'unique' circumstances as evidenced by 'intuitive decisions' they may become more visible, codified and more easily articulated and shared.

Effective EOR Decision Strategies With Limited Data: Field Cases Demonstration

“…One more significant bias is excessive use of intuition (expertise). Indeed, intuition can have a place in decision making (Dinnie et al 2002), but this bias can hurt the decision-making process in unexpected ways. The experience with chemical flooding a few decades ago led to the apparent definitive conclusion that these processes could not turn out to be commercial.…”