Real Option Model for Selecting the Optimum Portfolio of Oil and Gas Projects and Determining the Optimal Time for Applying Real Option

| 2012

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  1. Type of Document: M.Sc. Thesis
  2. Language: Farsi
  3. Document No: 45811 (01)
  4. University: Sharif University of Technology
  5. Department: Industrial Engineering
  6. Advisor(s): Modarres Yazdi, Mohammad
  7. Abstract:
  8. Iran has the third largest reservoirs of oil and the second largest reservoirs of gas and has the greatest hydrocarbon reservoirs worldwide. Considering the fact that production of oil is highly dependent on gas injection, Iran is facing a great challenge in determining proper strategy for consuming natural gas. Due to the lack of proper strategy form the point of view of economical as well as scientific evaluation in political and social aspects, it has resulted in weakening Iran’s place in international markets and also reduction of oil wells’ productions.In this study, after a review of relevant literature, characteristics of oil and gas projects effective on modeling them were identified. Considering these outcomes, a comprehensive model is developed based on the real option concept that is capable of determining optimal portfolio of projects. Additionally, a gas injection project and a gas exportation project are defined in portfolio framework through real data and the optimal time for applying real option is determined for different economic conditions via using the developed model. Considering the outcomes, desirability of applying the real option is increasing while the results are highly sensitive to oil recovery rate
  9. Keywords:
  10. Energy ; Policy Making ; Economic Analysis ; Decision Making ; Real Option Method

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