Petroleum Project Economics, Risk & Decision Analysis
Course Info
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Course Details
Introduction
Objective
Who should attend
Course Location
Petroleum Project Economics, Risk & Decision Analysis course covers the setup of economic analysis cases, including the estimation of recoverable reserves, production profiles, commodity prices, and project costs – CAPEX, OPEX, taxes, royalties, transportation, depreciation, before-tax (BTAX) cash-flow, after-tax (ATAX) cash-flow, international fiscal regimes (production sharing agreement and concessionary system).
The course starts from the basic required parameters of inflation, interest, and the time value of money. These concepts are then transformed into profitability indicators. Last but not the least, the profitability indicators are then used to make investment decisions.
The emphasis of the course is to bridge the gap between theoretical concepts and their practical limitations. The participants will be able to appreciate the amount of information that they never thought of. In addition to this, the emphasis is also on the use of Excel’s financial functions.
Course Outline
Introduction
- Why economic evaluation
- Objective of the course
- Typical oil & gas company objectives
- Typical oil & gas company activities
- Capital expenditure plans
- Basic process of economic evaluation
Inflation
- Inflation defined
- Types of inflation
- Consumer price index
- Risk Factors (Simple Illustration)
Interest
- Simple interest
- Compound interest formula
- Nominal & effective interest rate
The Time Value of Money
- Equivalence
- Interest tables
- Future value of present sum
- Present value of future sum
- Future value of ordinary annuity and annuity due
- Present value of ordinary annuity and annuity due
- Project financing
- Loan amortization schedule
Spreadsheet Applications
- Excel’s financial functions for equivalence
- Excel’s financial functions for loan amortization
