Creaming - And the Depletion of Resources: A Bayesian Data Analysis
27 Pages Posted: 17 Nov 2017 Last revised: 7 Mar 2018
Date Written: February 13, 2018
This paper considers sampling in proportion to size from a partly unknown distribution. The applied context is the exploration for undiscovered resources, like oil accumulations in different deposits, where the most promising deposits are likely to be drilled first, based on some geologic size indicators (“creaming”). A Log-normal size model with exponentially decaying creaming factor turns out to have nice analytical features in this context, and fits well available data, as demonstrated in Lillestøl and Sinding-Larsen (2017). This paper is a Bayesian follow-up, which provides posterior parameter densities and predictive densities of future discoveries, in the case of uninformative prior distributions. The theory is applied to the prediction of remaining petroleum accumulations to be found on the mature part of the Norwegian Continental Shelf.
Keywords: Log-Normal Distribution, Sampling Proportional to Size, Resource Prediction
JEL Classification: C00, C10, C11, C13
Suggested Citation: Suggested Citation