Statistical Issues in the Assessment of Undiscovered Oil and Gas Resources

Gordon M. Kaufman

Sep-92

Gordon M. Kaufman, September 1992Prior to his untimely death, my friend Dave Wood gave me wise counsel about how best to organize a paper describing uses of statistics in oil and gas exploration. A preliminary reconnaissance of the literature alerted me to the enormous range of topics that might be covered. Geology, geophysics with particular attention to seismology, geochemistry, petroleum engineering and petroleum economics–each of these disciplines plays an important role in petroleum exploration and each weaves statistical thinking into its fabric in a distinctive way. An exhaustive review would be book length. Dave and I agreed that a timely review paper of reasonable length would:

1. Illustrate the range of statistical thinking of oil and gas exploratists.
2. Concentrate on topics with statistical novelty, show how statistical thinking can lead to better decision making and let the reader now about important controversies that might be resolved by better use of statistical methods.
3. Focus on topics that are directly relevant to exploration decision making and resource estimation.

In response to Dave’s sensible suggestions, the Department of Interior’s 1989 assessment of U.S. undiscovered oil and gas will be a tour map for a short trip through a large territory of statistical methods and applications. Were he here to review this review, I know that it would be better than it is.