Analysis of Investment Decision System for Oil Companies Based on System Dynamic Principles

摘要

In order to escape of risk and gain high returns, it is important for oil companies to determine the scale and structure of investment in upstream business. By introducing system dynamic principles, this paper builds a system dynamics model of upstream investment decision on basis of the oil company's practice in China. Empirical results show that total investment scale will decline and the proportion of exploration investment will also decrease as well as ascent of development investment ratio. System dynamics can be applied to analysis and forecast of upstream investment scale and structure as a new method and provide the basis for making decision.