Fuzzy real options valuation for oil investments


Kahraman C. , Uçal Sarı İ.

8th International Conference on Fuzzy Logic and Intelligent Technologies in Nuclear Science, Madrid, Spain, 21 - 24 September 2008, vol.1, pp.1027-1032 identifier identifier

  • Publication Type: Conference Paper / Full Text
  • Volume: 1
  • Doi Number: 10.1142/9789812799470_0168
  • City: Madrid
  • Country: Spain
  • Page Numbers: pp.1027-1032

Abstract

Energy investments, that have a large portion in the world economy, have immense uncertainty. Traditional valuation methods arc less viable in that situation and other methods which can minimize uncertainty become more important. In this study, firstly discounted cash flows (DCF) analysis, which is one of the traditional valuation methods, is compared to real options valuation (ROV) which decreases the uncertainty. Next, fuzzy discounted cash flows (FDCF) analysis and fuzzy real options valuation (FROV) are applied to the same oilfield data. In conclusion the results of these four valuation methods are compared.