Oil and Gas
Oil and Gas | Commercial and Risk Analysis
Petroleum Economics and Decision Analysis
Format and Duration:
2 days
This course will focus on the economic analysis of oil and gas projects with particular emphasis on how to handle uncertainty and risk to enable better decision making. Probabilistic Reserves and Resource estimation methodology will be explained and volumetric aggregation explained. Participants will be introduced to basic probability theory and the impact of independence vs. dependence explained. This probability theory will be use to introduce probability tree valuation and decision analysis. During this course participants will also learn about the relationship between Reserves and Resources and the role economic analysis plays in determining net bookable volumes.
Feedback
An excellent introductory course with useful exercises
Schedule
Duration and Training Method
This is a classroom course using a combination of lectures and practical exercises to ensure participants learn and develop an understanding of the concepts covered.
Course Overview
Learning Outcomes
Participants will learn to:
- Understand the basics principles of petroleum economic analysis such as the time value of money, discounting and other project cash flow measures.
- Know what input data and assumptions are needed to undertake an economic analysis.
- Appreciate the link between hydrocarbon volumes and economic value.
- Demonstrate an understanding of petroleum fiscal systems and how these link to project net cash flows.
- Understand the valuation process for Reserves and Resources.
- Demonstrate an awareness of how this analysis can be used for investment decision purposes.
Course Content
- Introduction to project valuation and drivers of project revenue
- Valuation process and valuation inputs
- Fundamentals of Economic valuation
- General framework of hydrocarbon fiscal systems
- Details of Tax & Royalty vs. Production Sharing
- Valuation of Reserves (unrisked), sensitivity analysis and evaluation of risk and
- Valuation of Resources (risked)
- Project cash flow analysis (calculation of future cash flows, cash flow metrics), incremental economics and sensitivity analysis
- Sources of finance
- Risk mitigation and management
- Portfolio valuation
Who Should Attend and Prerequisites
This course is designed for staff with a technical background who wish to gain a basic understanding of probability tree analysis and its use in commercial and economic decision making within an upstream exploration and production setting.
Instructors
Ed Jankowski
Background
Ed is Technical Director of the RPS consulting business with over 30 years of experience in the international oil and gas sector covering a wide range of business activities. During a long career within this sector, Ed has worked for both integrated major oil and gas companies as well as independents and latterly for a global technical/commercial consultancy. This broad exposure includes exploration, development and production activities (involving oil, gas, LNG and power generation). Ed has a strong technical background (PhD and BSc in Geophysics) coupled with detailed expertise in petroleum economics and commercial negotiations. He has a proven track record in strategic thinking and analysis leading to development of investment strategy.
Areas of expertise include:
• Evaluation of Reserves and Resources,
• Portfolio valuation,
• Risk analysis and strategic analysis.
• Broad industry exposure including exploration, development, production activities (involving oil, gas, LNG and power generation) as well as mergers and acquisitions
Ed is an Honorary Fellow of Aberdeen University where he teaches Petroleum Economics and Portfolio Valuation as part of the Oil and Gas Enterprise Management master’s program. He has a similar role at Imperial College in London.
Affiliations and Accreditation
FGS
SPE
Courses Taught
N495: Petroleum Fiscal Systems
N814: Petroleum Economics and Decision Analysis
N988: PRMS Reserves and Resource Assessment
R001: Oil and Gas Essentials
R604: Oil and Gas Reserves Classification, Resources and Petroleum Economics
Accreditation and Certification
CEU: 1.4 Continuing Education Units
PDH: 14 Professional Development Hours
Certificate: Certificate Issued Upon Completion
RPS is accredited by the International Association for Continuing Education and Training (IACET) and is authorized to issue the IACET CEU. We comply with the ANSI/IACET Standard, which is recognised internationally as a standard of excellence in instructional practices.
We issue a Certificate of Attendance which verifies the number of training hours attended. Our courses are generally accepted by most professional licensing boards/associations towards continuing education credits. Please check with your licensing board to determine if the courses and certificate of attendance meet their specific criteria.