With the new changes in the petroleum sector in Brazil, the exploration will enter in an increasingly competitive and risky business environment. The trends of internationalization of exploration and risk reducing recommend the use of standardized techniques of evaluation and comparison of plays and prospects. Under these circumstances, managers have a growing need to employ better and more systematic decision-processes that explicitly embody the firm's objectives, desired goals, and resource constraints. In order to spread risk in major projects, oil companies will continue to engage in joint ventures.This paper describes a theoretical and practical system for decision support based upon the expected utility theory and decision analysis, in order to estimate the best capital allocation and to define the best level of financial participation of a firm in the new ventures in petroleum exploration project.
Economic evaluation; risk analysis; decision making; budget allocation; petroleum exploration joint venture