Petroleum Project Economics and Risk Analysis

Introduction

When evaluating a petroleum project, you as a decision maker should be able to choose the best alternative from an economic point of view and evaluate various investment opportunities by determining economic indicators and conducting sensitivity analysis.

This Petroleum Project Economics and Risk Analysis course is a practical course which introduces participants to methods and practices utilized in the international oil industry to examine the economic viability of upstream oil and gas projects.

The course is designed for participants with the following objectives:

  • Understand various economic terms used in the oil & gas industry.
  • Understand how to develop economic models of various petroleum fiscal regimes.
  • Understand different depreciation methods.
  • Carry out cash flow analysis and determine economic indicators.
  • Carry out different economic analyses for petroleum projects.
  • Evaluate and quantify risks and uncertainties.
  • Make the right investment decision in the presence of risk.
  • Evaluate farming-out alternatives.
  • Carry out a sensitivity analysis to determine the sensitivity of key economic indicators with varying assumed parameters.
  • Carry out a comprehensive economic evaluation study for any petroleum project including risk analysis and sensitivity study using spreadsheet models.

Spreadsheet Application

The course will include exercises aimed at enhancing each participant’s capability to conduct various economic evaluations. In addition, each participant will develop spreadsheet models of various economic analyses.

Course participants will receive a comprehensive spreadsheet program that can carry out a complete economic evaluation including a sensitivity analysis.

Course Content

Module 1 – Cash Flow Analysis

  • Familiarization with Economic terms.
  • Feasibility Studies
  • Setting up Cash Flow Calculation
  • International Petroleum Fiscal Regimes
  • Production sharing contracts
  • Depreciation
  • Depreciation Methods
  • Loss Carry Forwards
  • Inflation
  • Nominal & Real Cash Flow
  • Sunk Costs
  • Project Financing

Module 2 – Economic Indicators

  • 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
  • Comparing Economic Indicators

Module 3 – Risks and Uncertainties

  • Risk & Uncertainty
  • Expected Monetary Value Concept
  • Decision Tree Analysis
  • Farm-out Decision
  • Probability Analysis
  • Sensitivity Analysis
  • Spider and Tornado Diagrams
  • Probability Distribution
  • Monte Carlo Simulation

Module 4 – Setting up Oil Field Development Model

  • Introduction to Spreadsheet Calculation
  • Simple Cash Flow Using Excel
  • Setting up an Integrated Economic Model of a Typical Oil Field Development Project including Sensitivity Analysis

Who Should Attend the Course

Engineers, geologists, economists, accountants, and technicians who need to learn how to conduct economic evaluation and to understand the role of petroleum economics in investment decision-making.

This course is also recommended for supervisors & managers in the Planning, Exploration, Production, Projects, Financing, and Technical Departments of Oil & Gas Companies

Your Course Instructor – Salem M. Zeglam

Salem Zeglam is a petroleum engineering consultant and course instructor with more than 50 years of technical and managerial experience in petroleum engineering, reservoir engineering/management, production operation, property economic evaluation, and planning in major oil & gas companies working for several companies such as Esso, Sirte Oil Company, Libyan National Oil Corporation, and Agip Gas.

Mr. Salem Zeglam received B.Sc. in Petroleum Engineering from The University of Texas in 1973 and has taught courses in Europe, Asia, North Africa, and the Middle East.

DATE, TIME AND REGISTRATION

This is a virtual course to be conducted on Zoom.

Date: September 18-22, 2023

Time: 14:00 – 18:00 Singapore time zone (UTC +8)

Registration fee: US$ 1950.00 per participant

Course Registration – Register ONLINE HERE

For more information, please contact LDI Training – lditrain@singnet.com.sg