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Petroleum Economics, Business and Decision Making (PBM02)

  • 4-7 December 20174 daysVienna, AustriaCourse Fee: 3000 EUR + VAT
    Computer Fee: 200 EUR + VAT

Description

This course teaches the fundamentals of assessing the economic viability of upstream oil & gas projects in terms of the data / information required, the calculation techniques used, the assumptions made and how to interpret the resulting metrics such as NPV, ROI, ROR, IRR, P/I, etc.

More and more technologists are being directly involved in economic valuations - either through being asked to perform these evaluations or by participating in related issues such as calculating the value of information, data, technical work or research. Any technologist who wants to be aware of the value of their contribution, or who aspires to management or decision-making positions, will find great value in understanding project economics and its underlying assumptions.

Course Level: Intermediate
Instructor: Reidar Bratvold

Designed for you, if you are...

  • A surface or sub-surface technologist (engineer of any discipline, geologist, geophysicist and petrophysicist) who directly or indirectly contributes information or data to economic evaluations

How we build your confidence

The course combines lectures, group work, and individual exercises. A number of examples and practical decision problems will be addressed - both in the lectures as well as in the practice sessions. Microsoft Excel with decision tree and Monte Carlo Simulation add-ons will be used for many of the examples and exercises.

In addition to the course manual participants will receive a copy of the textbook 'Making Good Decisions'. This book provides essential reading for both technical professionals and managers.

The benefits from attending

By the end of the course you will feel confident in your understanding of:

  • The principles underlying the economic evaluation of projects large and small - from the economics of a fracture stimulation, through side-tracking a well, to major field development decisions
  • Tax regimes and the impact of discounting
  • How to develop cashflow models that are typical for oil & gas valuations
  • The impact of uncertainties in the data that goes into economic calculations, and how risk is dealt with
  • The use of decision analysis as a method to deal with the complexity and uncertainty involved in many real world decisions
  • The value of information concepts and their application to the E&P setting

Topics

  • Context and purpose of economic evaluation
  • Developing Net Cash Flow (NCF) estimates
  • Revenue and expense (capital and operating) streams
  • Depletion, depreciation and abandonment provisions
  • Taxes, royalties and production sharing contracts
  • Discounted cash flow analysis: time value of money and discount rates
  • Value and investment metrics: net present value, rate-of-return, return-on-investment, investment efficiency, hurdle rates
  • Incremental vs. acceleration projects
  • Strengths and weaknesses of DCF and NPV
  • Sources of uncertainty and accounting for risk

Customer Feedback

"Very clear, accessible and engaging. Pitched at a good level for geoscientists." - Geoscientist at Ophir Energy
"The instructor is very knowledgeable, exercises are helpful and well designed." – Reservoir Engineer at Qatar Petroleum
"Very good and easy to follow presenter and presentations, very interactive." – Engineer at RWE Dea


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