Evaluation Indicators System and Improved Multi-attribute Decision-Making Model for Overseas Oil and Gas Venture

Abstract

Screening of overseas upstream oil and gas venture is a multi-attribute decision-making issue. In view of the shortcomings of insufficient existing evaluation indicators especially without integrating environmental aspects, artificial dependency for determining subjective and objective preferences in weights calculation, and low resolution and the resulting difficult decision-making due to inability of existing models to deal with the relationship between distance and curve similarity, an evaluation indicators system and an improved multi-attribute decision-making workflow for overseas oil and gas venture were proposed. Firstly, classification criterions were determined quantitatively based on probability distribution of different types of data from 630 overseas oil and gas venture. Pearson correlation coefficient and principal component analysis were then used to eliminate redundant indicators, and final comprehensive indicator system were established fully reflecting technology, economy, commercial strategy and environment risk aspects of overseas oil and gas venture. Secondly, minimum discriminant information principle was introduced to quantitatively calculate comprehensive weights representing subjective and objective impacts. Thirdly, the relationship between distance and curve similarity of decision-making models were reasonably expressed by introducing a preference coefficient, a distance function equation for quantitatively calculating the preference coefficient was derived, and candidate schemes were projected to ideal schemes through the principle of vector projection, thereby a new derived parameter called comprehensive proximity projection coefficient was given to reflect the quality of an oil and gas venture, which was finally integrated with three quantitative or semi-quantitative models derived from classical fuzzy multi-attribute to form the overall screening workflow. The feasibility and validity are verified by actual data from overseas projects. Compared with existing methods, evaluation indicators of new method is more comprehensive, taking into account subjective and objective effects in both decision-making model and weight, as well as the resulting more comprehensive and flexible decision-making rules and more reasonable weight, with fast speed and higher resolution, and therefore more suitable for comprehensive screening and decision-making of overseas oil and gas venture.