Production Modeling in the Oil and Natural Gas Industry: An Application of Trend Analysis

Oil and natural gas (NG) play an important role in the world economy. Therefore, accurate forecast models for future production levels in the industry are needed for better planning and less risky business environment. The author uses trend analysis to model oil and NG production. For modeling, trends in the global oil and NG production during the period 1985-2010 are identified and linear regression analysis is employed according to the trend observed. The developed models are tested by the t distribution, the F distribution, and the residual analysis. The proposed models are used to forecast the future production trend in the industry. The results show that the proposed models can be effectively used for forecasting of future oil and NG production. The results are thought to provide a powerful tool for researchers, planners, and investors working in the energy field.