Joint venture formation and partner selection in upstream crude oil section: Goal programming application

In the past three decades, the magnitude of business dynamics has increased rapidly due to increased complexity, uncertainty and risk of international projects. This fact made it increasingly tough to ‘go alone’ into the international projects. As a consequence, companies with diverse strengths and weaknesses cooperatively bid for joint ventures (JV) formation. Joint venture is also a well-established aspect of the crude oil industry, specifically in the upstream segment. Making decision on the optimal form of JVs is still a challenging problem. In addition, the success of a JV is intertwined with the accuracy of the partner selection phase. Therefore, this paper formulates a multi-criteria mathematical model to select the best partners and form an optimal JV for undertaking oilfield projects. The lexicographic goal programming technique is employed to minimise undesirable deviations from diverse goals such as resources needs (technological and expertise), budgetary requirements, time, etc. The model is validated with a real-life-based example and provides insightful views on alternative formats of cooperation.