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Introduction to Petroleum Economics

HOT Engineering
Course summary
4 days
2,850 EUR excl. VAT
English
Vienna
Next available date: 23/09/2019 - Vienna
Open / Scheduled

Introduction to Petroleum Economics

Oil & Gas

Introduction to Petroleum Economics

Oil and gas companies compete for resources and reserves around the globe. In recent years new technologies have changed the global picture in the oil and gas industry and the frontiers of exploration are continuously driven to harsher and/or more environmentally sensitive areas.


Beside - or better because of - these technical challenges it is crucially important to keep project and company economics under control. What good is the best technological improvement, if the costs to apply these technologies cannot be recovered?

During this course, participants will be introduced to the whole world of Petroleum Economics. The material in this course cover questions such as:

  • Why are the economics in the upstream industry different from those in other industries?
  • Do I understand the whole value chain in my project?
  • How do I deal with risks and uncertainties?
  • What is my project NPV, EMV?
  • Will the recent tax change kill my project?

A combination of classroom lessons, real world examples and actual project calculations will ensure the practicality of this course. Interaction between the participants and the trainer as well as discussions and case studies amongst the participants are an integral part of this course. Interaction and discussions will give the participants the opportunity to further deepen the content. After return to your workplace you can immediately use the course content in your practical work.

Suitability - Who should attend?

This course is suitable for those who are:

  • A project manager or manager
  • An E&P professional (geologist, geophysicist, reservoir, production, drilling engineer etc.) seeking economic understanding in the projects they are involved in
  • Working in related professions such as legal, accounting, business development, HR, marketing
  • Working for a service provider to oil & gas industries to understand their roles and impact in the overall project life cycle
  • Working for government agencies to get an insight into the project and company economics
  • Keen to know more about petroleum economics

Outcome / Qualification etc.

Upon completion of this course, participants will feel confident in their understanding of:

  • The interactions in the industry
  • Setting up their own economic models
  • Terms like NPV, ROR, hurdle rate, etc. 
  • The risks in their projects and tools to handle these risks

Training Course Content

This course covers the following topics:

  • Understand the petroleum industry (value chain and its interactions)
    - Discuss petroleum industry specifics (oil and gas prices, IOC vs NOC)
    - Value generation in upstream, midstream and downstream
    - Partnering (developing projects jointly with competitors)
  • Project economics
    - Understand the basics for project economics (revenues, cost, cash flow, NPV, IRR)
    - Learn to set up projects
    - Identify critical parameters to project success
  • Multiple project economics
    - Compare projects according to KPIs
    - Rank projects and define investment strategy
    - Identify related risks and uncertainties
  • Company economics
    - Differences between project and company economics
    - Financing, depreciation and tax impact on company balance sheet
    - Cash flow versus profit
  • Cash flow and NPV
    - Understand the principles of revenues and cost streams
    - Appreciate the differences of time value of money
    - Set up and calculate your own cash flow and NPV models
  • Depreciation and amortisation
    - Understand the system of depreciation
    - Depreciation methods and its impact on economics
    - Concept of amortisation
  • Project milestones, rates of return and hurdle rates
    - Understand the importance of structuring a project according to milestones
    - Calculate KPI’s (ROR, hurdle rate, etc.) and experience the project impact
    - Base case und sensitivities > impact on project understanding
  • Upstream contracts and fiscal terms
    - Different forms of upstream will be discussed
    - Contractual and commercial terms and the impact on the overall project
    - Understand the key risks and uncertainties in these contract types
  • Risk analysis and uncertainty
    - Concept of risk and uncertainty
    - Inherent risks in the oil and gas industry
    - Risk evaluation and risk mitigation techniques
  • Decision tree analysis
    - Understand the concept of decision tree analysis
    - Calculation of EMVs (expected monetary values)
    - Develop your own decision tree

Expenses

The course fee includes tuition, course material, refreshments and lunch per session day and a 100 EURO non-refundable registration fee. Course fees do NOT include accommodation or living costs. Applicable taxes will be added.

This course utilises computers. Additional computer fee: 200 EUR +VAT.

The course is held at a top quality hotel with excellent meeting facilities.

Provider: HOT Engineering

HOTEngineering - Oil & Gas Courses, Reservoir Solutions & Quality Assurance

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HOT is a leading oil and gas training provider and E&P consulting company. We come together as a multidisciplinary team, combining 33 years of training and consulting experience to deliver state of the art public courses, bespoke in-house courses, long-term...


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