Portfolio Management in an Upstream Oil and Gas Organization

Abstract

Implementing portfolio management in an organization presents organizational and analytical challenges. A successful implementation requires an integrated solution for both the people aspects and the analytical aspects of the problem. Strategic Decisions Group (now Navigant Consulting, Strategy Consulting Practice) developed and implemented a portfolio-management process and system for a client organization in the upstream oil and gas industry. The tailored process provides a forum for decision-focused dialogue between senior management and asset teams. The system provides the analytical support for the process and enables management to compare decisions and assets across the portfolio and determine optimal allocation of resources. The system architecture builds on a rigorous model of the asset life cycle and the key decisions in the life cycle. To further integrate portfolio management into its business processes, the organization set up an internal core team to facilitate the process and work with the asset teams on an ongoing basis. This has helped reduce the time for developing regional and business-unit portfolio strategies. The value added from strategic alternatives developed using the method is in the hundreds of millions of dollars.

A hybrid of Delphi, AHP and TOPSIS Methods for project portfolio management

“…One of the important cases in establishing the management system of the project basket is choosing an appropriate framework proportionate to the type and conditions of the organization. Conformity of the model 143 used to the conditions of the organization is very important since considering the nature of different fields and professions and complexity of some of the methods, basically presenting a general model for choosing projects in all organizations will not be efficient enough since managers and decision -makers should use or apply methods that have more conformity with their organizations on one hand, considering the wide range of investment fields and the possibility of different fields or professions in organizations, basically comparing all investment projects with each other, given the similar qualitative and quantitative criteria is not logical for prioritizing of projects and it is necessary at first to classify different recommended investment projects according to the properties of each type of investment basket (Skaf, 1999;Martikainen, 2002). Then, the qualitative and quantitative indexes of the investment must be considered based on the conditions of the organization.…”

Human Behavior in Project Portfolio Selection: Insights from an Experimental Study

“…In the business world, decision makers typically prioritize projects based on their value and resource requirement (Koç et al., ; Salo, Keisler, & Morton, ). Advanced evaluation metrics address the difference between value and resource requirements, such as the net present value (Heidenberger & Stummer, ), or the ratio of value and resource requirements, following the “value for money” principle (Skaf, ; Phillips, ). While it is well known in project portfolio selection that practitioners use simple rules (Chao & Kavadias, ) which rank projects according to their specific criteria (Kavadias & Loch, ) like net present value or internal rate of return (Cooper et al., ) and that these approaches are heavily applied in NPD practice (Kavadias & Chao, ), surprisingly little work has been done to investigate people's decision process if they approach the underlying problem.…”

Portfolio Analysis of Layered Security Measures

“…Portfolio models have been applied in a number of fields other than finance. One of the early applications reported by Skaf involves the selection of properties for oil exploration. Burk and Parnell discuss a number of military applications.…”