Professor Steve Begg

Biography/ Background

Stephen (Steve) Begg is a Professor of Petroleum Engineering & Management at the University of Adelaide, Australia, where his research and teaching focus is on decision-making under uncertainty, asset and portfolio economic evaluations, and psychological & judgmental factors that impact these, particulary eliciting expert opinion and uncertainty assessment.

Before joining the University in 2002, Steve spent 19 years in the oil and gas industry, most recently as Director of Decision Science & Strategic Planning for Landmark Graphics Corporation. Prior to that, Steve worked for BP: 6 years with BP Exploration, in senior geo-science and engineering operational assignments which spanned a range of production forecasting, economic evaluation, petroleum engineering and reservoir characterization roles, and 7 years as a reservoir characterization researcher and manager for BP Research.

Steve is very active in the Society of Petroleum Engineers (SPE) and is a member of the Institute For Operations Research and Management Science (INFORMS), Decision Analysis Society (DAS) and the American Association of Petroleumn Geologists (AAPG). He is frequently invited to speak at Industry conferences and give workshops and short courses. In 2003 he was an SPE Distinguished Lecturer on the topic "I would rather be vaguely right than precisely wrong: a new approach to evaluating investment decisions". Steve has Chaired several SPE Forums (research conferences) and Advanced Technology Workshops related to his areas of expertise and has also contributed invited papers/presentations to such meetings.

Steve has a B.Sc. and Ph.D. in Geophysics from the University of Reading, England and has taken executive education courses at MIT and the University of Texas, Austin.

Teaching Interests

University

Prof. Begg teaches mainly in Level 3 and Level 4 of our undergraduate programs and in Masters by Coursework programs.

• Decision-making, uncertainty assessment and risk analysis (decision processes and tools such as Decision Trees, Influence Diagrams, Probability and Statistics, Monte Carlo simulation and the psychological and judgemental aspects of uncertainty and risk assessment)

• Economic Evaluation at Asset and Portfolio Levels ("Real Options", Value of Information, Value of Flexibility, Portfolio analysis and selection)

• Reservoir Characterization (data analysis, 3D modelling with geostatistics and up-scaling)

Industry Workshops and Short courses

Prof. Begg provides workshops and short-courses (half-day to one week) on topics such as

• Business & Economic Evaluation
• Making Good Decisions
• Value of Information & Flexibility
• Monte Carlo Simulation
• Eliciting Expert Opinions and Probability Assessments
• Portfolio Analysis & Selection

for companies including Exxon-Mobil, BP, BHP-Billiton, Maersk, Dong, Woodside, Santos and Stuart Petroleum

Research Interests

1. Psychological (cognitive science) aspects of judgment and decision-making Elicitation of un-biased (accurate) expert opinion, particularly probability assessments, for input to decisions

• Development of tools and processes to remediate biasses and investigation of the effectiveness and durability of such training
• Matching appropriate decision tools and processes to decision types
• Overcoming barriers-to-adoption - implications for, and development of new, reward/penalty mechanisms

2. Development of models and processes for improved asset/project economic valuation and decision-making under uncertainty

• Focus on accurate, rather than 'precise', holistic (systems) models
• Incorporating 'Real Option' thinking - valuing information and managerial flexibility

3. 'Real-time' Portfolio Analysis and management

• Optimizing/managing portfolio selection with multiple objectives
• Incorporation of project/asset options into portfolio decisions
• Extracting decision-making knowledge from multi-dimensional portfolio data
• Identification & incorporation of appropriate risk measures

4. Identification, development and application of internal business performance metrics that relate directly to shareholder or stockholder value.

• relevant key performance indicators (internal metrics)
• Value metrics: NPV, EVA, ROCE, ROI, ROV, SIV, ...
• Collection and analysis of actual data that shows the relationship between business performance and internal metrics and tools/processes for decision-making under uncertainty

The unifying theme through these research lines is improving 'decision-making under uncertainty'. They are pursued/funded through a fee-based 'research club', the Centre for Improved Business Performance' and through Australian Research Council grants

Publications

Books

Begg, S.H. and Bratvold, R.B.. (2009) Decision-Making and Uncertainty Management. Society of Petroleum Engineers, Richmond, Texas. (under review, to be published 2009)

Book Chapters

Begg, S.H. and Williams, J.K. (1991) Algorithms for generating and modeling sand-body distributions, in Reservoir Characterization II, Eds. Lake, Carrol & Wesson, Academic Press,

Dranfield P., Begg S.H. and Carter R.R. (1987) Wytch Farm Oilfield: Reservoir Characterization of the Triassic Sherwood Sandstone for Input to Reservoir Simulation Studies, in Pet. Geol. of North West Europe (ed. Brooks J. and Glennie K.), Graham and Trotman, pp149-160

Haldorsen H.H., Chang D.M. and Begg S.H. (1987) Discontinuous vertical permeability barriers: a challenge to engineers and geologists, in North Sea Oil and Gas Reservoirs (ed. Kleppe, J.), Graham and Trotman, p127-151

Begg, S.H., Chang D.M. and Haldorsen H.H. (1987) A Simple Statistical Method for Calculating the Effective Vertical Permeability of a Reservoir Containing Discontinuous Shales,in Reservoirs 1, AAPG Treatise of Petroleum Geology, pp377-391

Journal Articles

Smalley, P.C., Begg, S.H., Naylor, M., Johnsen, S. & Godi, A. (2008) Handling Risk and Uncertainty in Petroleum Exploration and Asset Management: An Overview, AAPG Bulletin, Vol 92, No.10 (October 2008), pp. 1251-1261 

Cunningham, P. and Begg, S.H., (2008) Using Value of Information to Determine Optimal Well Order in a Sequential Drilling Program, AAPG Bulletin, Vol 92, No.10 (October 2008), pp. 1393-1402

Batvold, R. and Begg, S.H., (2008) I would rather be Vaguely Right than Precisely Wrong, AAPG Bulletin, Vol 92, No.10 (October 2008), pp. 1373-1392

Welsh, M.B., Lee, M.D. & Begg, S.H. (2008). More-or-Less Elicitation (MOLE): Testing A Heuristic Elicitation Method. In V. Sloutsky, B. Love & K. McRae, Proceedings of the 30th Annual Cognitive Science Conference.

Mackie, S.I., Begg, S.H., Smith, C., and Welsh, M.B. (2008), Real World Decision-Making In The Upstream Oil And Gas Industry â?? Prescriptions For Improvement, APPEA Journal, Vol 48, part 1, pp329-343.

Welsh, M. B., Begg, S. H., & Bratvold, R. B. (2007). Efficacy of bias awareness in debiasing oil and gas judgments. In D. S. McNamara & J. G. Trafton (Eds.), Proceedings of the 29th Meeting of the Cognitive Science Society, pp. 1647-1652, Austin, Texas

Mackie, S.I., Begg, S.H., Smith, C., and Welsh, M.B. (2007), Decision Type - A Key to Realizing the Potential of Decision-Making Under Uncertainty, APPEA Journal, Vol 47, part 1, pp 309-319.

Al-Harthy, M., Begg, S.H., Bratvold, R., (2007) Copulas: A New Technique to Model Dependence in Petroleum Decision Making. Journal of Petroleum Science and Engineering, 57, pp195-208

Al-Harthy, M., Khurana, A., Begg, S.H., Bratvold, R., (2006) Investment Decisions, Systems Approach vs. Sequential Approach: Do Functional Dependencies And Interactions Matter?. APPEA Journal, Vol 46, pp511-523

Begg, S.H. and Bratvold, R., (2004) The value of flexibility, Southern China Oil & Gas Journal, vol17, no.4, p59-68

Conference Proceedings with Full Written Paper

Begg, S.H., and Bratvold, R.B., (2008) Systematic Prediction Errors in O&G Project and Portfolio Selection., Paper #116525, in Proc. SPE ATCE, Denver. Accepted 1 Apr 2008

Heywood-Smith, A., Welsh, M.B., and Begg, S.H., (2008) Cognitive Errors in Estimation: Does Anchoring Cause Overconfidence?, Paper #116612, in Proc. SPE ATCE, Denver. Accepted 1 Apr 2008

Welsh, M.B., and Begg, S.H., (2008) Modeling the Economic Impact of Individual and Corporate Risk Attitude, Paper #116610, in Proc. SPE ATCE, Denver. Accepted 1 Apr 2008

Begg, S.H., and Smit, N, (2007) Sensitivity of Project Economics to Uncertainty in Type and Parameters of Oil Price Models, Paper #110812, in Proc. SPE ATCE, Anaheim

Welsh, M.B., Begg, S.H., Bratvold, R., (2007) Modeling the Economic Impact of Cognitive Biases on Oil and Gas Decisions, Paper #110765, in Proc. SPE ATCE, Anaheim

Welsh, M.B., Begg, S.H., Bratvold, R., (2006) Correcting Common Errors in Probabilistic Evaluations: Efficacy of Debiasing, Paper #102188, in Proc. SPE ATCE, San Antonio

Bratvold, R. and Begg, S.H., (2006) Education for the Real World: Equipping Petroleum Engineers to Manage Uncertainty, Paper #103339, in Proc. SPE ATCE, San Antonio

Yao, Y., Begg, S.H., Bratvold, R.B., Behrenbruch, P., van der Hoek, J., (2006) Case Studies for Comparison of Different Real Option Approaches, Paper #101031,in Proc. SPE Asia-Pacific Oil and Gas Conference and Exhibition, Adelaide, Australia

Bratvold, R.B., Laughton,D., Enloe,T., Borison,A., Begg, S.H., (2005) A Critical Comparison of Real Option Valuation Methods: Assumptions, Applicability, Mechanics, and Recommendations, Paper #97011, in Proc. SPE ATCE, Dallas

Welsh, M.B., Bratvold, R.B. and Begg, S.H., (2005) Cognitive Biases in the Petroleum Industry: Impact and Remediation, Paper #96423, in Proc. SPE ATCE, Dallas

Begg, S.H., Bratvold, R., Campbell, J.C., (2004) Abandonment Decisions and The Value of Flexibility, Paper #91131, in Proc. SPE ATCE, Houston

Welsh, M.B., Begg, S.H., Bratvold, R., Lee, M.D., (2004) Problems with the elicitation of uncertainty, Paper #90338, in Proc. SPE ATCE, Houston

Laughton, D., Bratvold, R., Begg, S.H., Campbell, J.C., (2004) Development as the continuation of appraisal by other means, Paper #90155, in Proc. SPE ATCE, Houston

Begg, S.H., Bratvold, R., Campbell, J.C., (2003) Shrinks or Quants: Who will improve decision-making?, Paper #84238, in Proc. SPE ATCE, Denver

Begg, S.H., Bratvold, R., Campbell, J.C., Decision-making Under Uncertainty, (2003) In Proc. 7th International Symposium on Reservoir Simulation, Baden-Baden

Laughton, D.G., Begg, S.H., Bratvold, R.B., Campbell, J.C, Deutsch, C.V., (2003) The Joint Management of Appraisal, Development and Production in a Two-block Offshore Oil Field: A real Options Analysis, SPE Paper #82035S In Proc SPE Hydrocarbon Economics and Evaluation Symposium*, Dallas

Campbell, J.C, Begg, S.H., Bratvold, R.B., (2003) Portfolio Optimization: Living up to Expectations?, SPE Hydrocarbon Economics and Evaluation Symposium*, Paper #82005, in Proc. SPE ATCE, Dallas

Begg, S.H., Bratvold, R., Campbell, J.C., (2002) The Value of Flexibility in Managing Uncertainty in Oil and Gas Investments, Paper #77586, in Proc. SPE ATCE, San Antonio

Bratvold, R., Begg, S.H., Campbell, J.C., (2002) Would you know a good decision if you saw one?, Paper #77509, in Proc. SPE ATCE, San Antonio

Begg, S.H., Bratvold, R., Campbell, J.C., (2001) Improving Investment Decisions Using A Stochastic Integrated Asset Model, Paper #71414, in Proc. SPE ATCE, New Orleans

Begg, S.H., Kay, A., Gustason, E.R and Angert, P.F. (1994) Characterization of a Complex Fuvial-Deltaic Reservoir for Simulation, Paper # 28398, in Proc. SPE ATCE, New Orleans

Kay, A. and Begg, S.H., (1994) Integrating Deterministic and Stochastic Reservoir Descriptions for Simulation, Paper #28454, in Proc. SPE ATCE, New Orleans

Begg, S.H., Kay, A. and Gustason, E.R. (1993) Characterization of a Complex Fuvial-Deltaic Reservoir for Simulation, in Proc. 4th Annual Archie Conference, Houston.

Hajezedah, M and Begg S.H. (1993) Sensitivity of Oil Recovery to Grid-Size and Reservoir Description in Fluvially-Dominated Deltaic Facies, Paper #26080, in Proc. SPE ATCE

Angert, P.F., Begg, S.H. and Sallak, N.H. (1993) Modeling the effect of Imibition Capillary Pressure in Heterogeneous Porous Media: Waterflood Recoveries of the Romeo Interval, Prudhoe Bay Field, Paper #26081, in Proc. SPE ATCE

Newley, T.M.J. and Begg, S.H. (1992) Characterizing the Effects of Heterogeneity on Oil Recovery by Dry Gas Injection, Paper #24921, in Proc. SPE ATCE

Begg, S.H., Gustason, E.R. and Deacon, M.W. (1992) Characterization of a Fluvial-Dominated Delta: Zone 1 of the Prudhoe Bay Field, Paper #24698, in Proc. SPE ATCE

Begg, S.H., Carter R.R. and Dranfield P. (1987) Assigning Effective Values to Simulator Grid-Block Parameters in Heterogeneous Reservoirs, Paper #16754, in Proc. SPE ATCE

Begg, S.H., Chang D.M. and Haldorsen H.H. (1986) A Simple Statistical Method for Calculating the Effective Vertical Permeability of a Reservoir Containing Discontinuous Shales, Paper #14271, in Proc. SPE ATCE

Begg, S.H. and King P.R., (1985) Modeling the Effects of Shales on Reservoir Performance: Calculation of Effective Vertical Permeability, Paper #13529, in Proc. SPE ATCE

Recent Presentations (no written paper)

Assessing and Managing the Economic Impact of Uncertainty Invited presentation to Field Development Planning, IQPC, Kuala Lumpur, 29-30 April 2008

Eliciting Expert Opinions and Improving Uncertainty Assessments for Decision Making Invited presentation Field Development Planning, IQPC, Kuala Lumpur, 29-30 April 2008

Creating Value from Uncertainty Invited presentation to Pushing the Limits of Business Performance in a Changing World, International Symposium, Kota Kinabalu, 21-23 May 2007

Portfolio Management Principles Workshop Invited workshop to Pushing the Limits of Business Performance in a Changing World, International Symposium, Kota Kinabalu, 21-23 May 2007

Psychological & Judgmental Factors in Uncertainty Assessment & Decision-Making Invited workshop to Pushing the Limits of Business Performance in a Changing World, International Symposium, Kota Kinabalu, 21-23 May 2007

Improving Uncertainty Estimation and Oil & Gas Decision Making - An interactive lecture to better understand bias & error, Invited presentation to SPE Western Australia Section, 16 May 2007

Psychological Factors in Expert Judgment and Uncertainty Assessment Invited workshop Co2CRC Storage Risk Assessment Forum Workshop, University of Adelaide, 3 May 2007

Psychological Factors in Expert Judgment and Uncertainty Assessment, Invited presentation to SPE South Australia Section, 1 May 2007

The Utility of Exploration, APPEA Conference, Adelaide, 17-20 April 2007

Intuition and Bias in Risk Assessment: Impact and Remediation, AAPG International Conference, Paper #106392, Perth, 2006

Realizing the Potential of Decision-Making Under Uncertainty, AAPG International Conference, Paper #105320, Perth, 2006

An analysis and comparison of Real Option Approaches for Petroleum Investments, AAPG International Conference, Paper #107428, Perth, 2006

Psychological & judgmental aspects of eliciting uncertainty estimates, risk attitudes and expert opinions Invited presentation to SPE Victoria & Tasmania Section, August 2006

Sequential and Systems Approaches for Evaluating Investment Decisions: Influence of functional dependencies and interactions APPEA 2006, Australia. May 7-11, 2006

Improving oil and gas business performance through project portfolio optimization, Institute for Operational Research and Management Science (INFORMS) Annual Meeting, San Francisco, Nov. 13-16, 2005

Would You Know a Good Decision if You Saw One?, Paper #99490, AAPG International Conference, Paris, Sept. 2005

I Would Rather be Vaguely Right than Precisely Wrong, Paper #99491, AAPG International Conference, Paris, Sept. 2005

Other

Begg, S.H. I would rather be vaguely right than precisely wrong SPE News, Issue 77, June 2003

Bratvold, R.B., Begg, S.H., Campbell, J.C., A business decision perspective in Assessing and Valuing Risk. Landmark White Paper, July 2001

Tyson, S., Begg, S.H., Kassan, J., Reservoir Characterization for Petroleum Exploration & Development book manuscript

Entry last updated: Tuesday, 27 Jan 2009