Palantir advocates application of game theory to E&P

Bart Willigers to present game theory paper at upcoming SPE New Orleans meet.

Palantir Economic Solutions has been advocating the application of game theory to E&P decision support, with road shows in Europe, the US and an upcoming presentation at the New Orleans SPE meet. Palantir’s Bart Willigers, along with researchers from the University of Stavanger, has been working to apply game theory (made famous by the book and film ‘A Beautiful Mind’) to a variety of upstream scenarios. The idea behind game theory is that the profit of each stakeholder depends on the strategies of all others. Willigers suggests using game theory to model decision making in joint venture operations and government relations.

The E&P industry develops complex economic models to obtain insight into the commercial attractiveness of joint ventures but these ignore the influence of other stakeholders. In fact Palantir notes that of the SPE’s library of 50,000 papers, some 6,300 cover ‘risk,’ around 800 real options and only one on game theory! This despite the fact that game theory has generated two Nobel prizes.

Palantir suggests moving forward from classical decision analysis that focuses on a single decision-maker facing an uncertain environment to a paradigm that takes account of multiple competing players with ‘diverging interests, objectives, and influence.’ Palantir’s offering in this space is an extension of its Rapid Portfolio Evaluation (RPV) methodology. This leverages Palantir’s Spotfire-powered CASH and PLAN packages along with third party data from WoodMac and IHS. More from

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