Theories of OPEC such as price leadership, cartel, or game theoretic models suggest an incentive for OPEC members to expand their production capacity well above current levels in order to maximize revenues. Yet individual OPEC members consistently explore for and develop oil fields at a level well below their potential. The cause of low oil exploration and development efforts among OPEC members, and even some non-OPEC members, may have to do with risk aversion. This paper describes an alternative theory for OPEC behavior based on risk aversion using a two piece non Neumann-Morgenstern utility function similar to Fishburn and Kochenberger (1979, Decision Science 10, 503-518), and Friedman and Savage (1948, Journal of political Economy 56). The model shows possible low oil production behavior. (C) 2000 Elsevier Science Ltd. All rights reserved.