Abstract
The Monte Carlo method is a technique used in assessing the impact of the uncertainties in the input variables on the output variables. Current uncertainties in the variables (reservoir permeability, porosity, etc.) impact the future performance of the system (for example, a well’s oil rate) and, in general, the project valuation (oil price, material cost, etc.). Monte Carlo simulation is a procedure used to randomly account for uncertainties and generate probability distributions of the outcomes. It is used in some problems of value of information and value of flexibility.
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Vilela, M.J., Oluyemi, G.F. (2022). Probabilistic Evaluation of Uncertainties: Monte Carlo Method. In: Value of Information and Flexibility. Petroleum Engineering. Springer, Cham. https://doi.org/10.1007/978-3-030-86989-2_4
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