In this chapter we attempt to link the results of our research into logistics planning for a consortium of oil companies facing uncertain demands and prices [2, 3] with our current work on risk management and real options evaluation. The logistics work has been carried out in the European Community ESPRIT project Hydrocarbon and Chemical Logistics under Uncertainty via Stochastic Optimization (HChLOUSO). Logistics planning deals with supply, transformation, storage, and transportation activities in a complex network structure over various planning horizons (strategic decisions for the long term and tactical decisions for the medium term). As a feasible solution to such problems is seldom initially achieved, it is common practice in industry to search for a solution by minimizing the cost of infeasibilities and correspondingly adjusting constraints [6]. When internal resources of companies are exhausted (or in surplus), excess demand (or supply) may be handled externally by buying (or selling) the required products in the spot commodity markets.In our ESPRIT project we observed the importance of trading activities and proposed elimination of infeasibilities through trading. This problem has been formulated as a dynamic stochastic program with additional variables representing the trading activities and leads to robust first-stage solutions in the presence of future price and demand uncertainties [2].The volatility of crude oil prices has a significant impact on the planning decisions and budgets of oil companies. It is common for producing companies to develop a hedging program to insure that the company is protected against a collapse in crude oil prices. Here we integrate such financial planning with logistics planning and illustrate the importance of this
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