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Guest Article


The Application of Integrated Software in Complex Economic Modeling


The analysis described in this paper is an illustration of the potential of using integrated software in the development of complex economic models. The development of a large portfolio of risked projects could, in principle, have been developed in an Excel® environment.


Although Excel® is still the most widely used application for these types of analysis, it would have taken an economist several months to construct a very complex model or several models which by its very nature would be very difficult to audit and as a consequence, such a model would have been prone to modeling errors.


In contrast, all features required for the analysis executed in the study were already in place in PalantirCASH®, PalantirPLAN® and PalantirTREE®. These functionalities and tools had already been audited by a team of expert software developers and financial analysts long before an economist would start with the build of a model.


The daunting task of data collection and consolidation is greatly facilitated using integrated software such as PalantirSUITE®. A software architecture where all corporate data are stored in a central database enables multiple users to enter, manipulate and store information whilst ensuring the integrity of the data.


Once all data is stored and collected in consistent fashion the process of developing a portfolio overview by aggregating project data is greatly simplified.


Jason Ambrose, Managing Director and Founder, Palantir Solutions


Jason is an expert engineering economist with over 15 years of industry experience. In 2001, he founded Palantir Solutions, a specialist consulting partnership and software development company.


As Managing Director, Jason is responsible for setting the strategic direction of the company. Reporting to him are the Development Manager, Consulting Manager, Marketing Director and Finance Manager. In addition to his extensive experience Jason holds a B.Sc. in Mechanical Engineering from the University of Alberta, Edmonton, AB, Canada.


Palantir Solutions is a leading, global provider of Integrated, Dynamic Planning Software and Services to upstream oil and gas companies. Palantir provides Integrated, Dynamic Planning Solutions and Services that connect upstream organisations.


Integrated Planning brings budget, economic and planning processes together eliminating conflicting data sources. Information becomes accessible throughout the organisation.


References


 Balagopal, B. and Gilliland, G. (2005) Integrating value and risk in portfolio strategy for energy companies.  Bickel, J. E. and Bratvold, R. B. (2007) Decision making in the Oil and Gas industry: From blissful ignorance to uncertainty induced confusion. SPE 109610.


 McKenna, M. G., Wilczynski, H. and VanderSchee D. (2006) Capital project execution in the Oil and Gas industry.  Panko, R.R. (1998) What We Know About Spreadsheet Errors. Journal of End User Computing, Vol 10, 15-21  Roberts, T. (2005) Appetite for destruction: Ensuring sound risk management and governance.  Willigers, B.J.A. (2009) Practical portfolio simulation: Determining the precision of a probability distribution of a large asset portfolio when the underlying project economics are captured by a small number of discrete scenarios. SPE 124180


Drillers and Dealers :::


::: December 2011 Edition


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