The Fundamentals of Upstream Petroleum Economics and Risk Analysis

Who should attend:

This is a practical course that will enable delegates from all technical and commercial disciplines to become familiar with the theories and methods used to value oil and gas prospects, discoveries and fields in the international petroleum industry

Overview:

The course covers the fundamental aspects of upstream petroleum economics and risk analysis through a variety of lectures and workshop exercises. The practical application of theory via computer-based workshops allow participants to construct economic models, incorporate relevant cash-flow data and draw conclusions to aid decision-making.

Content:

This course will cover the following:

• Develop knowledge of upstream petroleum economic discounted cash flow evaluation methodologies
• Become familiar with the derivation, calculation and application of economic metrics such as NPV, EMV, IRR, Payback and PIR
• Learn about the components of an oil or gas cash flow
• Evaluate investment opportunities in exploration, development and production
• Incremental and project consolidation analysis
• Lean about international fiscal systems
• Understand government and oil company perspectives
• Understand the financial structure and mechanisms of production sharing contracts including the calculation of cost recovery and profit oil splits
• Construct production sharing contract and tax & royalty concession spreadsheet models
• Understand practices to quantify uncertainty and risk in exploration, reserves, costs and economic evaluation
• The application of risk in the evaluation of exploration prospects