Duration: 5 day course (includes 1 day practical expedition)

 

Course Objectives:

The course will enable participants to apply a structured approach to project justification, investment appraisal and decision making in the upstream petroleum business

Course Overview

- Basic concepts
    Identifying project cash flows and sources of information
- How to calculate the Accounting Rate of Return (ARR)
   Project payback. Net present value (NPV). Internal rate of return (IRR) and the cost of Capital. Profitability index (PI). Strengths & limitations of each
    method
- Project ranking - how to choose the best alternative
   How to optimise expenditure
- How to deal with inflation
   Taking account of taxation
- Accounting measures vs. Economic measures
   Understanding other financial criteria for decision making. Balancing short term vs. long term business objectives
- Economics, risk and decisions - decision to points are risk points
   Decision points for oil fields and gas fields. Risk & probability definitions and concepts.
   Risk identification, measurement & management. Forecasting as risk management.
   Assumptions, sensitivities & risk premia
- Exploration and appraisal decisions, uncertainty, risk and exposure Monte Carlo Simulation
    Economic models and spreadsheet design
   Development decisions
   Work scope definition and options. Decommissioning economics & risks. Cost estimating and Contingencies. Financing options. Construction
   contracts
- Further development decisions and economic cut off
- Preparing convincing project proposals
- Post project appraisal