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Schlumberger Uses Simulation in Bidding and Executing Land Seismic Surveys

Author

Listed:
  • Peter Mullarkey

    (NetQoS Inc., 6504 Bridge Point Parkway, Suite 501, Austin, Texas 78730)

  • Grant Butler

    (Grant Geophysical Inc., 21 Murranji Street, Hawker, Australian Capital Territory, Australia 2614)

  • Srinagesh Gavirneni

    (Johnson Graduate School of Management, Cornell University, Ithaca, New York 14853)

  • Douglas Morrice

    (McCombs School of Business, University of Texas at Austin, Austin, Texas 78712-1175)

Abstract

Schlumberger and its competitors use seismic surveying, the process of mapping subterranean rock formations with reflected sound waves, as an important first step in identification and recovery of oil and gas reserves. This complicated logistical operation commonly lasts two to six months, covers hundreds of square miles, employs scores of people, and utilizes a large variety of equipment. To win these jobs, Schlumberger participates in a closed bidding process organized by the oil companies. To succeed, it must quickly and accurately estimate the costs of seismic surveys. We developed a simulation tool to evaluate the impact of crew sizes (people and equipment), survey area, geographical region, and weather conditions on survey costs and durations. Schlumberger uses it to obtain and profit from a larger portion of the global seismic survey market. We demonstrated cost savings to clients of about $2 million on four surveys. Based on the number of surveys that Schlumberger conducts each year, it should save about $1.5 to $3 million each year.

Suggested Citation

  • Peter Mullarkey & Grant Butler & Srinagesh Gavirneni & Douglas Morrice, 2007. "Schlumberger Uses Simulation in Bidding and Executing Land Seismic Surveys," Interfaces, INFORMS, vol. 37(2), pages 120-132, April.
    • Handle: RePEc:inm:orinte:v:37:y:2007:i:2:p:120-132
    DOI: 10.1287/inte.1060.0230
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    References listed on IDEAS

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    1. John Butler & Douglas J. Morrice & Peter W. Mullarkey, 2001. "A Multiple Attribute Utility Theory Approach to Ranking and Selection," Management Science, INFORMS, vol. 47(6), pages 800-816, June.
    2. Michel Gendreau & Gilbert Laporte & Frédéric Semet, 1997. "The Covering Tour Problem," Operations Research, INFORMS, vol. 45(4), pages 568-576, August.
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