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| Industries
» Energy |
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Oil and gas
- Timing and size of exploration and
development activities are important factors of success in this industry. It
has long been established that such decisions cannot be made using traditional
economic analysis because of the inherent uncertainty and flexibility. Our
suite of analytical tools focus on solving such problems by considering the
stochastic nature of the price process, quality of the reserves and the cost
of development. We help our clients answer such questions as:
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What is the optimal time to initiate (and terminate) exploration and
development activities?
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What is the threshold price level of the commodity that will make an action
optimal?
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What are the threshold quantity and quality of reserves in conjunction with
price levels that will provide a signal for initiating (and terminating) an
investment?
Electricity
- Construction and management of power plants
and the distribution grid are the focus here. Because of the very high
volatility and jumps in electricity prices (primarily because electricity
cannot be efficiently stored to smooth demand-capacity imbalances), both the
design and operation of power plants require sophisticated economic analyses.
We help companies in the following areas:
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Timing and design of new plants
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Portfolio management of a group of plants -
with varying operating characteristics
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Evaluation of the economics of improvements
sought and the determination of the expected return on investment
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Pricing
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Production sequencing and geographical
optimization
Alternative energy
- As environmental concerns, demand and
efficiency push us into renewable sources of energy, economic considerations
become equally important in creating the optimal portfolio of energy sources
for the future. We help companies as well as government organizations craft
better policies by considering all aspects of this complex problem
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