Financial risk management in offshore oil infrastructure planning and scheduling

This paper discusses the financial risk management in the planning and scheduling of offshore oil infrastructure. The problem consists of determining the sequence of platforms to build and the wells to drill as well as how to produce these wells over a period of time. The problem has shown numerical difficulties, and several decomposition methods have been attempted to alleviate these difficulties. We added budgeting constraints to this model, following thus the cash flow of the project, taking care of the distribution of proceeds, and even considering the possibility of taking loans against some built equity. The model was made stochastic, the financial risk, an important aspect of these ventures, is analyzed, and the ability to manage it is discussed. The numerical difficulties resulting from the addition of uncertainty are overcome by using the sampling average algorithm (SAA; Verweij, B.; Ahmed, S.; Kleywegt, A. J.; Nemhauser, G.; Shapiro, A. Comput. Appl. Optim. 2001, 24, 289-333). We show that the SAA yields a very good solution that can be proven to be very close to the optimum using the concept of an upper bound risk curve. A measurement of the gap of solutions of the SAA is also introduced. The main objective is to emphasize the conceptual aspects of the modeling.