Exploration and Production companies often must evaluate their potential E&P investment using proper present value analyses of expected future cash flows. From the projected cash flows and required investments, the annual rate of return and other project economic indicators can be extracted to evaluate the significance of company investment.
This program provides practical guidance in the application of the techniques of the economic analysis currently used in the oil & gas industry. When executing a petroleum related project, one should be able to choose the best alternative from economic point of view as well as to properly evaluate various investment opportunities by determining economic indicators and sensitivity analysis. Techniques for predicting profit, production, costs, and cash flow enable the analyst to evaluate decision alternatives for optimum results. Understanding economic indicators, risk and uncertainty, different economic structures such as tax regimes and production sharing contracts, enhances the quality and the value of economic analysis.
Program Highlights include:
- Familiarization with the application techniques of the economics analysis in the oil and gas industry.
- Petroleum related project evaluation methods.
- Screening of the petroleum projects based on evaluating the investment opportunities.
- Identifying the risks and uncertainties of the project.
- Application of risk management methods in mitigating the identified risks of the project.
This workshop is designed to provide technical and practical approaches to executing a petroleum related project in upstream sector. This program is suitable to a wide range of professionals but will greatly benefit:
- Professionals from Ministries of Oil, Gas & Petroleum,
- Oil and Gas Field Engineers,
- Oil and Gas Managers,
- Oil and Gas Auditors,
- Oil and Gas Planners,
- Financial Analysts.
- 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
Cash Flow Analysis
- Familiarization with Economic terms
- Setting up Cash Flow Calculation
- Depreciation Methods
- Loss Carry Forwards
- Nominal & Real Cash Flow
- Sunk Costs
- Project Financing
Risks & Uncertainties
- Expected Value Concept
- Decision Tree Analysis
- Farm-out Decision
- Probability Analysis
- Sensitivity Analysis
- Probability Distribution
- Monte Carlo Simulation
Setting up Calculation
- Introduction to Spreadsheet Calculation
- Simple Cash Flow Using Excel
- NPV calculations
- Application of economic indicators
- Class discussion
Setting up Oil Field Development Model
- 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
The primary objectives of the program are to:
- 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.
By sending delegates on the FIVE day seminar in Petroleum Project Economics and Risk Analysis your organization will benefit by:
- Participants learn about the application of economic valuation and risk assessment processes and techniques within the global oil and gas industry.
- Help the participants to identify and analyse the risk involved in a petroleum related project.
- Help the participants to apply the decision-making procedures to justify the petroleum projects in term of profitability.
- Help the participants to recognize the uses of options in the ranking criteria to select and execute the high profitable project.
- Putting values to the oil and gas companies’ active project through interpretation of economic results of applied case studies
- Help participants to recognize and identify the influencing parameters for oil and gas field developments.
- Learn to construct a project cash flow model.
- Gain the techniques in project ranking and screening.
- Gain the operational decision making techniques under risk.
- Capable of identifying the uncertainties in petroleum related project and how to manage them.
- Enhance the participant’s awareness about influential parameters in an oil and gas field development plan.
The training approach is based on principles of economic evaluation of petroleum related project with focusing on step by step developing economic models, determining economic indicators, evaluating and quantifying risks and uncertainties and making the right investment decision for the project. To facilitate that, the Microsoft Excel based economics modules will be built and all discussions will be provided using high quality power point slides.
Program Dates: 09 – 13 December 2019
Registration Closes on: 31 October 2019
Venue: Best Western Corona Hotel
Program Fee: $4550
Fee Covers:Register Online
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