Monte Carlo Simulation of Oil Company Risk Related Costs

Abstract

This article is devoted to examination of oil company activities in the field of prevention and spill cleanup. There was described how high damage could be take emergency oil spill. There was justified importance and expediency of spill prevention and quick remediation. There was offered the usage of Monte Carlo Simulation for the purposes of assessment of risk related costs and determination of risk reserves of oil company. There were considered characteristics of given model, including input data, formulae, and coefficients allowing to calculate combined estimated risk related costs, and calculate different aspects of risk related costs. There was demonstrated a possibility of run of such simulation with the aid of Palisade @risk using as an example hypothetical oil company with using historic records and conceptual data as input data. As a result of given simulation were calculated estimated risk related costs and determined risk related costs of oil company for considered temporary horizon.