Disclosed is an adaptive borehole correction (ABC) technique based on an inversion approach that advantageously corrects shallow laterolog measurements for borehole effects, including determining and accounting for unknown tool eccentricity. The algorithm is based on simplex radial 1-D inversion where at every logging up to four unknowns are determined, namely tool eccentricity, Rt, Rxo, and Lxo. After that a borehole correction methodology is employed wherein the tool response in a borehole with real mud resistivity Rm is modified to a response in the borehole with virtual mud resistivity equal to Rxo.