Bayesian Approach to the Assessment of Geological Risk in Oil and Gas Exploration

When assessing undiscovered oil resources, an important step is the assessment of geological risk, which is usually defined as the probability that there will be no accumulation of hydrocarbons. Some important authors have traditional ways of obtaining this probability, but these classic models are not developed on a rigorous basis. Therefore, they may present conflicting results, which are not always compatible with reality and are not able to take into account historical data from similar situations already studied. This article aims to propose a Bayesian approach to the determination of geological risk with advantages over classical approaches. The positive aspects and limitations of the Bayesian approach are discussed and an illustrative application using fictitious data is presented.