Dynamic Resource Allocation Withself-|Interested Agents in the Upstream Oil & Gas Iindustry

Abstract

This paper analyzes resource allocation between principal-agent (and between agentagent) in the upstream oil & gas industry. In the model, we incorporate the parties' preferences as we outline a principal-agent model. Further, we optimize the resource allocation between the parties as they are self-interested with the use of incentive-based contracts with risk and rewards. Our optimization determines that to realize the highest profit, the principal and the involved agents should avoid any agents' becoming dominant. Hence, the volume of sourced items from the agents should not vary too much. We further outline the on-boarding process of new agents in the network and how the network needs to compensate for the potential loss for some of the agents if the network should fulfill the incentive-compatibility condition.

Role of regulatory monitoring in the Indian Oil and Gas Sector for Risk Reduction

“…Fortunately, drilling technology and logging while drilling is helping in drilling and exploration (Weijermars et al, 2014). Investors are to be compensated for the losses unless they leave the industry network (Sund, 2010).…”

Role of regulatory monitoring in the Indian Oil and Gas Sector for Risk Reduction

“…Sometimes, the government's vulnerability to being re-elected may also in uence the rm's (Weijermars et al, 2014). Investors are to be compensated for the losses unless they leave the industry network (Sund, 2010).…”