Training

Petroleum Project Economics and Risk Management


Learn more Date of Training
11 Feb 2019

This highly interactive and scenario-based 5 day training programme will enable you to apply a structured approach to project justification, investment appraisal and decision-making in the upstream petroleum business.

What you will learn

  • how to apply economic and risk management evaluation tools for oil and gas project proposals
  • how to identify and quantify key uncertainties during field development and full life-cycle economics
  • how to calculate the economic and financial viability of expenditure proposals projects under risk conditions
  • how to develop a structured approach to measuring, managing and combating commercial risk
  • how to assess the ranking of alternative projects
  • how to prepare credible project proposals with a view to winning management, partner and government approval
  • how to improve project and business outcomes

Training method

Over half of this course comprises practical exercises, case studies, and industry-based scenarios, for which you will need your own laptop with Microsoft ExcelTM pre-installed. Prior knowledge of spreadsheet techniques is assumed, and you will be able to retain for future reference all project examples created during the course.

Basic concepts

  • Identifying project cash flows and sources of information

How to calculate project benefits and interpret the answer

  • Project payback
  • Net Present Value (NPV)
  • Internal Rate of Return (IRR) and the cost of capital
  • Profitability Index (PI)
  • Strengths and limitations of each method

Project ranking - how to choose the best alternative

  • How to optimise expenditure

How to deal with inflation and with exchange rates

Taking account of taxation

Accounting measures versus economic measures

  • Understanding other financial criteria for decision making
  • Balancing short term versus long term business objectives

Dealing with risk and uncertainty

  • How to identify and quantify project risks and uncertainties
  • Sensitivity analysis
  • How to draw and interpret spider and tornado diagrams
  • Calculation of maximum exposure as a risk measure
  • Decision trees and the calculation of Expected Monetary Value (EMV)

Economics, risk and decisions - decision points are risk points

  • Decision points for oil fields and gas fields
  • Risk and probability definitions and concepts
  • Risk identification, measurement and management
  • Forecasting as risk management
  • Assumptions, sensitivities and risk premiums

Exploration and appraisal decisions, uncertainty, risk and exposure

Monte Carlo simulation

Economic models and spreadsheet design

Development decisions

  • Workscope definition and options
  • Decommissioning economics and risks
  • Cost estimating and contingencies
  • Financing options
  • Construction contracts

Further development decisions and economic cut-off

Preparing convincing project proposals

Post-project appraisal


Learn More

https://mdtinternational.com/


Date of Training

11 Feb 2019

investmentappraisalproject economicspetroleumrisk managementprojectsmanagementdecision economicsOil and Gaslife-cyclecommercial riskExplorationistsreservoir engineersproject managergovernmentIndustry

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