training specialists to the upstream oil and gas industry
 
 

Petroleum Economics

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Course overview

The course is designed for learning the basics of petroleum economics and uses a combination of instruction and exercises to ensure participants absorb both the theory and the practical application of the topics. Definition and discussion of all major economic indicators such as NPV, IRR, and Payout are featured. A basic understanding of the different worldwide fiscal regimes and simple cash flow modelling of projects in those regimes is presented and simple decision analysis including sensitivity, risk and expected value is discussed and practiced.

The course is designed for

  • Professionals who need to learn about petroleum economics
  • Personnel within the industry
  • Technical support staff entering the industry
  • Technical staff who want to expand their understanding of the industry

Course outline

Day 4: Simple Sensitivity and Risk

  • Defining risk, sensitivity analysis, risk analysis and calculating EMV and ENPV
  • Incremental investment analysis
  • Multiple project investment analysis including project ranking

During this day participants will discuss and incorporate risk and sensitivity analysis in order to calculate EMV and ENPV. The purpose of incremental investment analysis will be presented. Multiple project investments will be analyzed and a project ranking will be recommended.

Day 5: Project Investment Analysis

  • Understanding the oil and gas capital budgeting and project selection process
  • Making recommendations about potential oil and gas investments
  • Comprehensive project investment analysis in groups

Participants will review a general capital budgeting and the project selection process. Project economics will then be calculated and recommendations made about potential oil and gas investments. A final comprehensive project analysis will be completed in groups.

Day 1: Concepts and Uses of Petroleum Economics

  • Purposes of project economic evaluations
  • Methods of economic evaluation
  • Project lifecycle and who is involved
  • Common types of oil and gas upstream projects
  • Forecasting Production, Prices and Expenses

Participants will learn why project economics are necessary and the methods for economic evaluation. They will also learn about the project lifecycle and who is involved. During the course, common types of oil and gas upstream projects will be presented. The concepts and methods of forecasting production, prices and operating expenses will also be reviewed.

Day 2: Defining Cash Flow

  • Defining revenue and operating expenses and capital expenditures
  • Detailed cash flow construction
  • Discounting and Present Value
  • Economic Indicators such as NPV, DPI, IRR, hurdle rate, WACC and more

On this day the cash flow stream will be constructed in detail, including company revenue, operating, and capital expenditures. In addition, the concepts of discounting and net present value will be presented and practiced. Multiple economic indicators will be discussed, including DPI, IRR, hurdle rate, WACC and more.

Day 3: Worldwide Fiscal Systems

  • The main types and elements of fiscal regimes
  • Define and calculate cash flows for concessionary systems and production sharing contracts
  • Service agreements
  • Current trends in fiscal systems
  • Comparing international investments

Participants will be introduced to the main types and elements of fiscal regimes around the world. They will also learn to build cash flows for concessionary systems and simple production sharing contracts. The different types of service agreements will be reviewed, and then investments under different fiscal regimes will be compared.


Location Start Date End Date Cost Trainer Book
Istanbul 12 Mar 2018 16 Mar 2018 £2,950 Jeannine Smith
Bahrain 15 Apr 2018 19 Apr 2018 £2,950 Jeannine Smith
London 18 Jun 2018 22 Jun 2018 £2,950 Jeannine Smith
Kuala Lumpur 16 Jul 2018 20 Jul 2018 £2,950 Jeannine Smith
Atyrau 17 Sep 2018 21 Sep 2018 £2,950 Jeannine Smith

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