TY - GEN

T1 - Optimal Investment in the Development of Oil and Gas Field

AU - Erzin, Adil

AU - Plotnikov, Roman

AU - Korobkin, Alexei

AU - Melidi, Gregory

AU - Nazarenko, Stepan

N1 - Publisher Copyright: © 2020, Springer Nature Switzerland AG.

PY - 2020/7

Y1 - 2020/7

N2 - Let an oil and gas field consists of clusters in each of which an investor can launch at most one project. During the implementation of a particular project, all characteristics are known, including annual production volumes, necessary investment volumes, and profit. The total amount of investments that the investor spends on developing the field during the entire planning period we know. It is required to determine which projects to implement in each cluster so that, within the total amount of investments, the profit for the entire planning period is maximum. The problem under consideration is NP-hard. However, it is solved by dynamic programming with pseudopolynomial time complexity. Nevertheless, in practice, there are additional constraints that do not allow solving the problem with acceptable accuracy at a reasonable time. Such restrictions, in particular, are annual production volumes. In this paper, we considered only the upper constraints that are dictated by the pipeline capacity. For the investment optimization problem with such additional restrictions, we obtain qualitative results, propose an approximate algorithm, and investigate its properties. Based on the results of a numerical experiment, we conclude that the developed algorithm builds a solution close (in terms of the objective function) to the optimal one.

AB - Let an oil and gas field consists of clusters in each of which an investor can launch at most one project. During the implementation of a particular project, all characteristics are known, including annual production volumes, necessary investment volumes, and profit. The total amount of investments that the investor spends on developing the field during the entire planning period we know. It is required to determine which projects to implement in each cluster so that, within the total amount of investments, the profit for the entire planning period is maximum. The problem under consideration is NP-hard. However, it is solved by dynamic programming with pseudopolynomial time complexity. Nevertheless, in practice, there are additional constraints that do not allow solving the problem with acceptable accuracy at a reasonable time. Such restrictions, in particular, are annual production volumes. In this paper, we considered only the upper constraints that are dictated by the pipeline capacity. For the investment optimization problem with such additional restrictions, we obtain qualitative results, propose an approximate algorithm, and investigate its properties. Based on the results of a numerical experiment, we conclude that the developed algorithm builds a solution close (in terms of the objective function) to the optimal one.

KW - Investment portfolio optimization

KW - Production limits

UR - http://www.scopus.com/inward/record.url?scp=85092081998&partnerID=8YFLogxK

U2 - 10.1007/978-3-030-58657-7_27

DO - 10.1007/978-3-030-58657-7_27

M3 - Conference contribution

AN - SCOPUS:85092081998

SN - 9783030586560

T3 - Communications in Computer and Information Science

SP - 336

EP - 349

BT - Mathematical Optimization Theory and Operations Research - 19th International Conference, MOTOR 2020, Revised Selected Papers

A2 - Kochetov, Yury

A2 - Bykadorov, Igor

A2 - Gruzdeva, Tatiana

PB - Springer Science and Business Media Deutschland GmbH

T2 - 19th International Conference on Mathematical Optimization Theory and Operations Research,MOTOR 2020

Y2 - 6 July 2020 through 10 July 2020

ER -