Operations Research Techniques As Applied In The Petroleum Industry

The areas are identified where the techniques of operations research have been applied in the petroleum industry. Particular emphasis is given to the linear program models that have been used for solving management problems. Of the entire gamut of applications for linear programming, attention is focused on the models that represent underground reservoirs. Such models could be used to help schedule drilling rig operations and to schedule oil production. A framework is established for placing the model for underground reservoirs in the proper perspective along with the models which represent other facets of the oil business. One of the remarkable phenomena of this century is the rapid growth in the size and' complexity of human organizations. The mere size of modern business means that administrative decisions can affect vast quantities of capital and large number of people. Mistakes can be tremendously costly, and a single wrong decision can require years for rectification. Moreover, the pace of modern business is such that decisions are required more rapidly than ever before; the mere postponement of action can give a decided advantage to a competitor. It is not surprising that the increase in difficulty of decision making has been followed by efforts to put this activity on a more objective basis. The growing science of operations research, which relies heavily on the methods that have proved so successful in the physical sciences, is one aspect of these efforts.