Petroleum Risk and & decision Analysis

DURATION

5 days

DATE

18 – 22 September 2023

FEE

£4500

LOCATION

The Business Xchange Hub, Marco Polo House
3-5 Lansdowne Road, Croydon, Surrey, CR0 2BX United Kingdom

Course Objective:

Good technical and business decisions are based on competent analysis of project costs, benefits and risks. Participants learn the decision analysis process and foundation concepts so they can actively participate in multi-discipline evaluation teams. The focus is on designing and solving decision models. About half the problems relate to exploration. The methods apply to R&D, risk management, and all capital investment decisions. Probability distributions express professional judgments about risks and uncertainties and are carried through the calculations. Decision tree and influence diagrams provide clear communications and the basis for valuing each alternative.

Monte Carlo simulation is experienced in detail in a hand-calculation exercise. Project modeling fundamentals and basic probability concepts provide the foundation for the calculations. The mathematics is straightforward and mostly involves only common algebra.

The emphasis is on practical techniques for immediate application. This is a fast-paced course and recommended for those with strong English listening skills. This course is intended as the prerequisite for the Advanced Decision Analysis with Portfolio and Project Modeling course.

Who should attend

Geologists, engineers, geophysicists, managers, team leaders, economists, project accountants, Health and safety staff and planners

Course Content

Cashflow Analysis

  • Familiarization with Economic terms
  • Setting up Cashflow Calculation
  • Depreciation Methods
  • Loss Carry Forwards
  • Inflation
  • Nominal & Real Cashflow
  • Sunk Costs
  • Project Financing
  • 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

Risks and Uncertainties

  • Risk & Uncertainty
  • Expected Value Concept
  • Decision Tree Analysis
  • Farm-out Decision
  • Probability Analysis
  • Sensitivity Analysis
  • Probability Distribution
  • Monte Carlo Simulation

Setting up Spreadsheet Calculation

  • Introduction to Spreadsheet Calculation
  • Simple Cashflow using Excel
  • NPV Calculations
  • Application of Economic Indicators
  • Class Discussion

Setting up Oil Field Development Model

  • Group Activities
  • Setting up an Integrated Economic Model of a Typical Oil Field Development
  • Project Sensitivity Analysis for the Selected Model
  • Introduction to Russell Field Model
  • Final Remarks

This course can also be taken in

Accra: TBA

Dubai: TBA

Texas: On Request

Course Outcome

How To:

  • Describe the elements of the decision analysis process and the respective roles of management and the analysis team
  • Express and interpret judgments about risks and uncertainties as probability distributions and popular statistics
  • Represent discrete risk events in Venn diagrams, probability trees, and joint probability tables
  • Solve for expected values with decision trees, payoff tables, and Monte Carlo simulation (hand calculations)
  • Craft and solve decision models
  • Evaluate investment and design alternatives with decision tree analysis
  • Develop and solve decision trees for value of information (VOI) problems

Course Mode

Face to Face

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Petroleum Risk and & decision Analysis

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