Risk and decision making analyses and applications to the petroleum exploration — A certain PSC area

Risk is a critical factor that an investor must take into account, regardless of where money is invested. Before making important decisions in petroleum exploration, it is standard practice to calculate the expected monetary value for each given prospect. Because of the large uncertainty inherent in decisions that involve large sums of money, the investor needs to exercise prudence. This paper describes an application of calculating the expected monetary value in a mature producing area in the Malacca Strait PSC Contract Area, Indonesia.