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.

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

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

Accra: TBA

Dubai: TBA

Texas: On Request