Petroleum economics, risk and opportunity analysis. This course will introduce students to key techniques from economics and finance allowing them to understand the business decision making relevant to the petroleum industry and decommissioning. Co2 sequestration in depleted oil field authors ana teresa ferreirada. Petroleum economics courses, petroleum economics training. It is an excellent book because it considers all economic aspects of the petroleum industry. Financial modeling and petroleum project economics program. This course will introduce students to key techniques from economics and finance allowing them to understand the business decision making relevant to the petroleum industry and. This highly interactive and scenariobased training programme will enable you to apply a structured approach to project justification, investment appraisal and decisionmaking in the upstream petroleum business. Esanda engineering reserves and resources evaluation. The training approach is based on principles of economic evaluation of petroleum related project with focusing on step by step developing economic models, determining economic indicators, evaluating and quantifying risks and uncertainties and making the right investment decision for the project. Also, to avoid repetition of the phrase oil andor gas, the term oil is used as a reference to both oil and gas unless specific reference to one or the other is necessary. Project economics includes corporate economic models. This course has a supplemental book located in our spe bookstore entitled.
Energy projects are characterized by high capital investment in early years, without revenue. Economics books our free economics books for students will help you understand the principles of economics. This chapter covers the basic economic principles that govern the oil and gas industry. With the company growing at a rate of over 50% per month and a free trial to subscriber conversion rate of over 60%, the product is quickly capturing market share. Develop a broader, contextual perspective of the business of petroleum, and project economics, by being able to identify credible papers, and reading, comprehending and evaluating them. Some have as few as four elements, a few have many more. Tim nieman has 30 years of experience as a risk and decision analyst, economist and petroleum scientist. The best economic evaluations are team efforts consisting of geologists. Course philosophy petroleum professionals need to have a thorough understanding of the value chain and the global competitive landscape in which they operate. The purpose of petroleum engineering is to examine, define, and implement methods and procedures for developing and extracting oil, gas and associated products so as to optimize profits and obtain a returnoninvestment that is commensurate with the risk incurred in making the investment. The applicability of various probability distributions to the petroleum project development cost analysis is discussed. Expanded basic petroleum economics training course. Dec 24, 2015 introduction to project economics in oil and gas exploration and production upstream industry, including basic project economics method and example of calcul slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. Oil and gas exploration economic model manual version 2.
Pdf petroleum economics, risk and opportunity analysis. Drillnomics released its oil and gas economic evaluation and decline curve software to the public this quarter, and industry response has been overwhelmingly positive. Packed with realworld examples and case studies demonstrating how to calculate rate of return, discounted cash flow, payout period, and more, petroleum economics and engineering, third edition assists petroleum engineers, chemical engineers, production workers, management, and executives in sound economic decisionmaking regarding the design, manufacture, and operation of oil and gas plants, equipment, and processes. Decisions through the lifecycle of a petroleum project 3 d. Then the net present value means the increase in value by choosing this project instead of the best alternative. Merak decision tool kit provides a toolbox of complementary modules. The last section of the chapter presents a petroleum economic evaluation example which presents a complete risk analysis leading to net present values npvs of the example project. Economic evaluation of petroleum projects basic aspects. Introduction to petroleum economics print and digital. The present value of a project is the sum of discounted cash flow elements. In particular, the university reserves the right to change the content andor method of assessment, to change or alter tuition fees of any unit of study, to withdraw any unit of study or program which it offers, to impose limitations on enrolment in any unit or program, and or to vary arrangements.
Importance of petroleum economics in decision making macroeconomic condition and project evaluation upstream economic evaluation time value of money cash flow analysis and present value key economic indicators for project evaluation probability and statistics in decision making uncertainty analysis tornado diagram, sensitivity analysis decision tree and monte carlo analysis. Our petroleum economics and project management courses are very effective, more details at the click of the course titles below. In all stages of a projectfrom prospect assessment to abandonmentgeox exploration risk and resource assessment. The 5 days sophisticated training course in petroleum economics is an entrylevel course designed to bridge gaps in your knowledge and give you true business advantage. Basic petroleum economics mai 2004 ppm 2nd workshop of the china case study 2 investment decisions investment decisions are among the most important decisions that a companygovernment can take capital intensive irreversible high riskuncertainty. Scribd is the worlds largest social reading and publishing site. Apply an expanded range of generic excel capabilities relevant to economic evaluation and. Standard handbook of petroleum and natural gas engineering second edition. You have to use the rate of return of the best alternative use of money as the discount rate. His professional experience includes 20 years in leading and conducting projects of various sizes and scopes involving the application of decision and risk analysis methodologies in the energy and environmental sectors, and 10 years as a practicing petroleum geophysicist.
Further, operating and capital costs are discussed for economic evaluation of both single processes and complete refineries. This course is an excellent introduction to the fundamentals of petroleum economics. Example of an oil price forecast displaying both real escalation lower curve and nominal terms, which includes both real growth and inflation upper curve. Almost every decision is made on the basis of an economic evaluation. Within each broad category, various elements have been described which may differ between petroleum system schemes. In many countries psas play a critical role in the exploration and production of oil and natural gas. He has an mba from the cranfield school of management and a degree in engineering from cambridge and is a member of the society of petroleum engineers spe. The subjects treated are petroleum economics, project evaluation and corporate finance. An introduction to basic risk analysis will also be presented. View petroleum economics and project evaluation kelkar. Standard handbook of petroleum and natural gas engineering third edition.
This is a course with the objective to provide a good understanding of evaluating and reporting oil and gas resources and reserves. Introduction to petroleum economics is about the process of gathering project data, calculating whether a project should proceed and delivering recommendations. Project management must involve detailed evaluation, assessment and mitigation of a wide range of risks in order to make the right decisions at the appropriate times. Project economic issues have been pigeonholed into a very narrow concern with the calculation of economic rates of return, as opposed to a more fundamental. Economics for oil and gas projects under conditions of certainty and uncertainty. H30702 economic evaluation of oil and gas properties handbook. Economic evaluation of oilproduction project with eor. Let bv be the book value of the depreciable asset, pa is the. Apply an expanded range of generic excel capabilities relevant to economic evaluation and other petroleum engineering problems. Economic model for oil and gas property evaluation. Economic evaluation of oil and gas projects onepetro.
Petroleum economics net present value internal rate of. Economic evaluations are also performed to determine reserves and the standardized measure of value for reporting purposes for publicly held companies. The total cost over the life of the project is the same in the cash flow model and the financial net income model, but the portion of the. Petrowiki was initially created from the seven volume petroleum engineering handbook peh published by the society of petroleum engineers spe. Prior to working as an independent consultant, peter was director petroleum economist at indeva energy consultants and a project engineer at doris engineering in paris. Introduction to project economics in oil and gas upstream. It covers everything you need to know about the economics behind the petroleum industry, in very simple language. Ihs energy, analyzes the factors of upstream project commerciality. Petroleum economics free download as powerpoint presentation. An example various categories have been proposed that describe a petroleum system. The asia onshore business game is run during units one and two of the financial modeling and petroleum project economics program. However i wish it could be updated by the authors or other scholars interested in petroleum.
A psa largely defines the economic relationship between the government of a host country and an operating company engaged in a petroleum exploration and production project. It discusses the science of petroleum economics, starting from squareone, the tools of the trade that petroleum economists use, day in and day out, and also its application. Mian cwc school for energy is the global market leader in providing public and incompany training. Petroleum economics and engineering crc press book. Petroeng 4034 petroleum business and project economics. The seg wiki is a useful collection of information for working geophysicists, educators, and students in the field of geophysics. Several key concepts that will be covered are the time value of money, cash flow basics, common economic indicators, fiscal systems and project selection fundamentals. Access the economics data from merak peep economic evaluation and decline analysis software, then use the power of these tools to make more informed decisions. Introduction to project economics in oil and gas exploration and production upstream industry, including basic project economics method and example of calcul slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. Read up on for instance microeconomics, macroeconomics and contemporary economics. Please visit the course list builder to get started.
Petroleum economics plays a vital role in the oil and gas industry and it lies at the. The international collaborative program in petroleum economics and management is designed for students or professionals with degrees in science, engineering or social science business school, law, seeking indepth training to develop a commanding skill set in energy techniques, energy economics and management. In particular, the university reserves the right to change the content and or method of assessment, to change or alter tuition fees of any unit of study, to withdraw any unit of study or program which it offers, to impose limitations on enrolment in any unit or program, and or to vary arrangements. Use the tools and concepts on petroleum investment projects a field development project an exploration project be able to understand the concepts used and do the economic calculations needed in the case study. Introduction to petroleum economics society of petroleum. Textbooks can only be purchased by selecting courses. Tagged oil and gas reserves evaluation, petroleum economics courses, petroleum economics training comments off on while oil industry slumps, permian basin drilling operations still hold promise for investors. Maples presents an organized look at the yield data and properties of products from refinery processes and how to use this information in performing process economics studies of various types. June 18 22, 2018 petroleum project economics and risk analysis during this.
Petroleum economics and project evaluation 20172018 last modified. Project evaluation is derived from a cash flow model, regarding reservoir production profile, price and costs, capital expenditures capex, operating expenditures opex, carbon credits, depreciation time, fiscal assumptions, etc. Integrated petroleum economics and risk analysis society of. Petroleum economics net present value internal rate of return.
This course is designed for learning the basics of petroleum economics and project selection. Financial modeling and petroleum project economics program unit 2. Oil and gas reserves evaluation, petroleum economics courses. A sensitivity analysis study was carried out in order to identify the most critical variables. In all stages of a projectfrom prospect assessment to abandonmentgeox exploration risk and resource assessment software and merak planning, risk, and reserves software promote an integrated and consistent approach to empower better business decisions. Discussion progresses from an introduction to the industry, through principles and techniques of engineering economics, to the application of economic methods. The international collaborative program in petroleum economics and management is designed for students or professionals with degrees in science, engineering or social science business school, law, seeking indepth training to develop a commanding skill set. Economics modeling for petroleum exploration and production projects considering risk and imprecise data. Information in this publication is correct at the time of printing but may be subject to change. However i wish it could be updated by the authors or other scholars interested in petroleum industries. That became possible thanks to advanced programs, additional skillsand experiences as well as the outputs of mathematical and statistical sciences. New oil and gas economic and decline curve software tool. Kent saugier is a handson scientific, technology and business professional with twentyfive years experience in upstream oil and gas, offshore technology, economics, economic modeling, international petroleum contracts, project management, software applications and technology including design, licensing and commercialization.
Economics drives the entire oilgas producing industry. Basic petroleum economics by mari kvaal august 2004 3rd ppm philippines case stydy workshop 2. Economic evaluation of prospects and producing properties. This course will introduce a variety of fundamental petroleum economic principles including revenue, expenditures, fiscal systems, risk analysis, and investment analysis. This book explains how to apply economic analysis to the evaluation of engineering challenges in the petroleum industry. The following areas will be covered in some detail.
Packed with realworld examples and case studies demonstrating how to calculate rate of return, discounted cash flow, payout period, and more, petroleum economics and engineering, third edition assists petroleum engineers, chemical engineers, production workers, management, and executives in sound economic decisionmaking regarding the design. The economic evaluation of projects in the bank tends to be overoptimistic and to neglect downside risksa tendency it shares with the banks macroeconomic forecasts. Orlandi encyclopedia of life support systems eolss these shows structural characteristics, relations of strength, economic and political dynamics which cannot be immediately attributed to the traditional life cycle of an industry and which indeed can no longer be repeated. In this discussion, the terms property and project are used interchangeably as the objects of evaluation. Pdf economics modeling for petroleum exploration and.
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