| Summary: | This paper develops a model of the decision to decommission an oil platform offshore the UK, using elementary options valuation It contrasts the choice of decommissioning date under expected or certain-equivalent value with the dates that would be optimal if options values for continuing production were developed with respect to uncertain prices, decommissioning costs, fixed operating costs, and quantities. The problem of combining uncertain parameters is discussed and the effect is shown of UK and Norwegian tax, in very simple representation.
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