Project Management in the Oil and Gas Industry

Equation:
 
x
x
x
x
m
1
2
3
 
(2.35)
 
s
m
m
m
m
x
x
x
x x
x
x x x
x
x x
x
x
x
x
2
1
2
2
1 2
1
2
2
2
1
1
2
1
18
0 5
.
(2.36)
2.3.3.2 Uniform 
Distribution
This distribution is shown in Figure 2.18 and is used in the case that the 
event can take place at any value with the same probability of occurrence. 
Probability
x
1
x
m
x
2
Figure 2.17 Triangular distribution.
1
k < 0
k = 0
k > 0
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
0
1
2
3
4
5
X/sigma
P
robability densit
y
6
7
8
9
10
Figure 2.16 Pareto distribution.

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Project Economic Analysis 69
For example, when you roll a die the probability of rolling a number 
between one and six is the probability of a constant, which is the prob-
ability of 1/6.
x
1
and x
2
are the minimum and maximum values, respectively.
x
x
x
1
2
2
(2.37)
 
s
x
x
1
2
2
0 5
12
.
 
(2.38)
2.3.4 Choose the Appropriate Probability Distribution
Each type of probability distribution has its own properties, which gives 
every distribution the ability to represent a specific natural phenomenon. 
For example, we find that normal distribution is a good distribution that 
can represent concrete strength and an increase in population can be rep-
resented by logistic distribution. So, before building a model, one must 
be sure to choose the best probability distribution that represents the 
parameter.
One can obtain the suitable probability distribution by returning to 
previous references or research, as many statistical studies have been 
performed for most engineering parameters. Another way to obtain the 
suitable probability distribution is by studying the phenomenon to define 
the best distribution to represent it. The second is performed through a test 
more than once, and the results are plotted and compared to the probability