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Type: Journal article
Title: Why are decisions for oil and gas projects not always made the way they 'should' be?
Author: Newman, D.
Begg, S.
Welsh, M.B.
Citation: Australian Petroleum Production and Exploration Association (APPEA) Journal, 2018; 58(1):130-158
Publisher: Australian Petroleum Production and Exploration Association
Issue Date: 2018
ISSN: 1326-4966
Statement of
David Newman, Steve Begg and Matthew Welsh
Abstract: The outcomes of many business decisions do not live up to expectations or possibilities. A literature review of neuroscience and psychological factors that affect decision making has been undertaken, highlighting many reasons why it is hard for people to be good decision makers, particularly in complex and uncertain situations such as oil and gas projects. One way to diminish the impact of these human factors is to use the structured methodology and tools of Decision Analysis, which have been developed and used over 50 years, for making good decisions. Interviews with senior personnel from oil and gas operating companies, followed up by a larger-scale survey, were conducted to determine whether or how Decision Analysis and Decision Quality are used and why they are used in particular ways. The results showed that Decision Analysis and Decision Quality are not used as often as the participants think they should be; some 90% of respondents believed that they should be used for key project decisions, but only ~50% said that they are used. Six propositions were tested for why Decision Analysis and Decision Quality are not used more, and the following three were deemed to be supported: • Decision Analysis and Decision Quality are not well understood. • There is reliance on experience and judgment for decision-making. • Projects are schedule-driven. Further research is proposed to determine the underlying causes, and tackle those, with the aim being to improve business outcomes by determining how to influence decision makers to use Decision Analysis and Decision Quality more effectively.
Keywords: Biases; decision analysis; decision gate; decision-gated framework; decision making; decision quality; emotional tagging; experience; heuristics; interview; intuition; judgment; neuroscience; outcome; pattern recognition; prediction; premortem; psychology; rational; survey
Description: Published online 28 May 2018
Rights: Journal compilation © APPEA 2018
DOI: 10.1071/AJ17106
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Australian School of Petroleum publications

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