Mediating conflicts and risks
Example of complexity - A list of questions for Exxon ?
- Is the Doba project a significantly sized investment for a global company like Exxon ?
- What is the significance of the World Bank and IFC loans for Exxon ?
- Will there be other types of syndicated loans to Exxon by a group of banks ?
- On the long run (30 years), how would oil prices fluctuations influence the economics of the project ?
- What kind of risks are the most significant for oil companies : financial, environmental or political volatility of government partners ?
- Is there a global issue on the development of oil&gas exploration/production in Central Africa ?
- How this would influence the stock market value of a company like Exxon ?
"Facing all these issues what is the most likely strategy for Exxon ?" The multiple views of the project finance decision makers and partners
The sponsors
Exxon Mobil, Chevron and Petronas The lenders
World Bank with IFC and IDA, ABN Amro with Exim-US bank, Credit Agricole Indosuez with
Coface, French government with AFD … The contractors
SPIE Capag, Will Bros, Bouygues Offshore, Cegelec… The benefitors
Government of Chad, Cameroon The "world awareness" public
Friends of the Earth, WWF, Amnisty International….
Multicriteria decision (MCDA)
Ranking and selection of projects can be done using game theory (ex : minimax)
But it needs exclusive need of quantitative indices (ex : expected NPV)
MOST OF THE TIME COMPLEX PROJECT RANKING RELIES ON QUALITATIVE OPINIONS -> MCDA
The ELECTRE method
- Selection of the alternatives : various oil fields development
- Definition of criteria : aspects on which alternatives are judged
- Evaluations : Each alternative versus each criteria
- Weights : Assessment of relative importance of criteria
- Final result aggregates above information by ranking alternatives
The Benue/Doba exercise
Do nothing, Doba, Doba and Bongor, All fields of Chad (including Massenya east Chari bank)
and All fields in Chad and Cameroon (including Logone/Birni) Criteria :
interests of main economic and political influential players : Exxon, World Bank, Chad
government, Cameroon government, environmental pressure groups, NGOs and human right activists. Evaluations :
Percentage ranking of each alternatives by influential players : World Bank, Exxon, Chad, Cameroon and the NGOs Weights :
Assessment of relative importance of influential players in final decision.
 
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Example of Electre matrix for global project objectives |
Final alternatives ranking using the Electre MCDA method |
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