Petroleum Project Economics and Risk Analysis

Duration:5 DAYS

During this five-day program, participants will learn, in a practical and realistic manner, how to analyze the financial performance of oil and gas investments from both the project and corporate reporting perspectives. They will be asked to build financial models for typical oil and gas projects and then identify and incorporate all major risks into the analysis. A major part of the learning is achieved through team participation in a challenging “business game” where they must present their team’s recommendations to the Board.

The instructional format consists of lectures by a respected specialist and team participation in a classic IHRDC business game. The business game typically takes almost one half of the instruction time and is highly rated for its effectiveness in internalizing learning and generating discussion among team participants. In addition to the lectures and business game, this course will utilize additional exercises and case studies to further enrich the classroom experience. This method of blended learning has proven to be an ideal way for participants to learn the practical needs of today‘s international energy markets.

WHO SHOULD ATTEND

This program is designed specifically for energy managers, supervisors, and key employees from broad functional areas, such as finance, technology, and project development who wish to expand their knowledge of investment and risk analysis in managing, developing, and reporting on energy projects, financial modeling, and petroleum project economics.

LECTURE CONTENT

Introduction to Petroleum Economics and Energy Business Environment
Introduction to Financial Statements and Measures of Performance
Project Management Fundamentals
Energy Project Economics and Measures of Performance
Project Financing: Commercial Debt Finance
Energy Project Risk and Uncertainty
Probability Theory and Quantitative Analysis
Decision Tree Analysis
Monte Carlo Simulation
Portfolio Theory and Real Options
Stakeholder Impact Assessment and Analysis
Managing Price Risk Using Financial Derivatives

FINANCIAL ANALYSIS BUSINESS GAME: OCEANA

OCEANA - MapThis business game is an integral part of the learning process. Participants, working in teams, will evaluate an oil and gas business opportunity in the Republic of Oceana, near Indonesia. They build a financial model that will integrate various risks associated with the investment. This model will utilize a proposed Production Sharing Agreement and incorporate revenue, capital, and operating costs, financing costs, and tax projections for the life of the project. Throughout the program teams will add layers of complexity to the model by incorporating different risk analysis tools presented in the lectures. The teams will present their project analysis to a decision review board by outlining the risk profile and expected performance measures of the project. They then learn the outcome of those decisions. Emphasis will be placed on the practical implementation of the tools presented and on developing practical financial modeling skills.

INSTRUCTORS

Rick Squires, MS
Erhan Aslan, PhD