Abstract
Due to the suddenness, uncertainty and huge loss of political risks in overseas projects, this paper considers the time dimension and the success rate of project exploitation for the goal of optimizing the allocation of multiple objectives, such as output, investment, efficiency and risk. A linear portfolio risk decision model is proposed for multiple indicators, such as the uncertainty of project survey results, the inconsistency of project investment time, and the number of projects in unstable political regions. The model is tested by numerical examples and the results show that the model can effectively maximize the portfolio income within the risk tolerance range under the premise of ensuring the rational allocation of resources.
Highlights
Since the 1990s, many international oil companies have continuously developed systemic risk analysis and optimized portfolio technology to avoid or reduce exploration risks, which is one of the hotspots in the international petroleum industry in recent years [1]
A linear portfolio risk decision model is proposed for multiple indicators, such as the uncertainty of project survey results, the inconsistency of project investment time, and the number of projects in unstable political regions
The model is tested by numerical examples and the results show that the model can effectively maximize the portfolio income within the risk tolerance range under the premise of ensuring the rational allocation of resources
Summary
Since the 1990s, many international oil companies have continuously developed systemic risk analysis and optimized portfolio technology to avoid or reduce exploration risks, which is one of the hotspots in the international petroleum industry in recent years [1]. The benefits and risks of different oilfields will vary depending on the source properties, geological understanding, and mining techniques These uncertainties increase the risk of oil companies mining, which is difficult to measure. The pursuit of oil and gas projects is often the pursuit of maximum return on investment at a certain level of risk While for those with weak financial strength and relatively difficult financing, it is often pursued to minimize the risk under certain conditions of expected returns. The entire investment allocation decision process of oil and gas resources development has high risk, high complexity and high uncertainty. At the beginning of the investment period, according to the available development investment quota, the investment portfolio decision is made for each oilfield development project to achieve different target needs such as high investment income, low mining cost and low investment risk
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