Petroleum Project Economics and Risk Analysis

Courses Syllabus

Objectives

• Understand various economic terms used in the oil & gas industry.
• Understand how to develop economic models of various petroleum fiscal regimes.
• Carry out cash flow analysis, different economic analyses for petroleum related project and   determine economic indicators.
• Evaluate and quantify risks and uncertainties.
• Make the right investment decision in the presence of risk.
• Carry out a comprehensive economic evaluation study for any petroleum related project including risk analysis and sensitivity study using spreadsheet.
• Contribute to the petroleum project investment within a solid economic system and do a detailed economic evaluation.
• Contribute to the decision making process for any petroleum related project.

Programme Outline

Cash Flow Analysis

• Familiarization with Economic terms
• Setting up Cash Flow Calculation
• Depreciation Methods
• Loss Carry Forwards
• Inflation
• Nominal & Real Cash Flow
• Sunk Costs
• Project Financing

Economic Indicators

• Economic Indicators Definitions
• Present Value Concept
• Discount Factor
• Net Present Value
• Internal Rate of Return
• Effect of Project Delay
• Payback Period
• Profit/Investment Ratio
• Incremental Projects

Risks and Uncertainties

• Risk & Uncertainty
• Expected Value Concept
• Decision Tree Analysis
• Farm-out Decision
• Probability Analysis
• Sensitivity Analysis
• Probability Distribution
• Monte Carlo Simulation

Setting up Spreadsheet Calculation

• Introduction to Spreadsheet Calculation
• Simple Cash Flow Using Excel
• NPV calculations
• Application of economic indicators

Setting up Oil Field Development Model

• Group activities
• Setting up an Integrated Economic Model of a Typical Oil Field Development
• Project Sensitivity Analysis for the selected model
• Introduction to Russell field model
• Final remarks