Title :
Application of real option in oil exploration
Author :
Zhang, Qingwei ; Teng, Fan
Author_Institution :
Sch. of Bus., Zhejiang Wanli Univ., Ningbo, China
Abstract :
Financial option has been widely used to avoid risks. People pay more attention to avoid the risks which the underlying asset can´t be traded. Real option is a new invention for risk avoidance. Several types of real options that may be met in oil investment are discussed in detail; a theoretical formula about the valuation of project is derived; and the application of real option is briefly introduced finally.
Keywords :
financial management; petroleum industry; risk management; financial option; oil exploration; oil investment; real option application; risk avoidance; Contracts; Cost accounting; Economic indicators; Exchange rates; Gaussian distribution; Input variables; Investments; Petroleum; Pricing; Tin; Option; Project Valuation; Real Option;
Conference_Titel :
Information Management and Engineering (ICIME), 2010 The 2nd IEEE International Conference on
Conference_Location :
Chengdu
Print_ISBN :
978-1-4244-5263-7
Electronic_ISBN :
978-1-4244-5265-1
DOI :
10.1109/ICIME.2010.5478144
