On the diffusion of probabilistic investment appraisal and decision-making procedures in the UK's upstream oil and gas industry

J.H. Finch, F. Macmillan, G. Simpson

Research output: Contribution to journalArticle

7 Citations (Scopus)

Abstract

A critical activity for companies involved in the upstream oil and gas industry is deciding whether or not to invest in developing hydrocarbon prospects. Decisions are characterised by combinations of uncertainty and incomplete information assembled by professionals with different, but highly complementary areas of expertise. This paper presents evidence of variation among companies in the industry in the extent to which formal appraisal and decision-making procedures are adopted, and, where adopted, in the manner of application. An explanation is set out in which the importance of senior managers' attitudes is tempered by limits to the adaptability of organisational routines, of which appraisal and decision-making processes are prominent.
Original languageEnglish
Pages (from-to)969-988
Number of pages19
JournalResearch Policy
Volume31
Issue number6
DOIs
Publication statusPublished - 2002

Keywords

  • Investment appraisal procedures
  • Upstream oil and gas industry
  • Organisational routines
  • Uncertainty
  • Monte Carlo simulation

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