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Sensitivity analysis applied to fuzzy inference on the value of information in the oil and gas industry.

Vilela, Martin; Oluyemi, Gbenga; Petrovski, Andrei


Martin Vilela

Gbenga Oluyemi

Andrei Petrovski


Value of information is a widely accepted methodology for evaluating the need to acquire new data in the oil and gas industry. In the conventional approach to estimating the value of information, the outcomes of a project assessment relate to the decision reached by following Boolean logic. However, human thinking is based on a more complex logic that includes the ability to process uncertainty. In value of information assessment, it is often desirable to make decisions based on multiple economic criteria which, if independently evaluated, may suggest opposite decisions. Artificial intelligence has been used successfully in several areas of knowledge, increasing and enhancing analytical capabilities. This paper aims at enriching the value of information methodology by integrating fuzzy logic into the decision-making process; this integration makes it possible to develop a human thinking assessment and coherently combine several economic criteria. To the authors’ knowledge, this is the first use of a fuzzy inference system in the specified knowledge domain. The methodology is successfully applied to a case study of an oil and gas subsurface assessment where the results of the standard and fuzzy methodologies are compared, leading to a more robust and complete evaluation. Sensitivity analysis is undertaken for several membership functions used in the case study to assess the impact that shifting, narrowing and stretching the membership relationship has on the value of information. The results of the sensitivity study show that, depending on the shifting, the membership functions lead to different decisions; additional sensitivities to the type of membership functions are investigated, including the functions’ parameters.

Journal Article Type Article
Journal International journal of applied decision sciences
Print ISSN 1755-8077
Electronic ISSN 1755-8085
Publisher Inderscience
Peer Reviewed Peer Reviewed
Institution Citation VILELA, M., OLUYEMI, G. and PETROVSKI, A. [2019]. Sensitivity analysis applied to fuzzy inference on the value of information in the oil and gas industry. International journal of applied decision sciences [online], (accepted).
Keywords Value of information; Fuzzy inference system; Sensitivity analysis; Oil and gas industry; Uncertainty