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Home | Project Management | The 10-Day Advanced Project Economics & Risk Management for Oil & Gas Professionals
Course Description

Seminar Outline

The training seminar is split into two modules:

MODULE I - Tools & Techniques for Managing Risk & Uncertainty

MODULE II - Advanced Oil & Gas Project Economics, Risk & Decision Analysis

Each module is structured and can be taken as a stand-alone training course; however, delegates will maximise their benefits by taking Module 1 and 2 back-to-back as a two-week training course.

 

MODULE I: Tools & Techniques for Managing Risk & Uncertainty

DAY 1

Fundamentals of Decision Analysis 

  • What is Project Management Decision Analysis?
  • The Purpose of the Project Business Case
  • The Need for Systematic Risk Management for Decision-Making
  • Risk and Uncertainty on Projects
  • Option Analysis
  • Identifying Key Decision-making Factors

Measures of Project Profitability

  • Fundamental Tools of Engineering Economics
  • Time Value of Money
  • Appraisal Methods - Discounted Cash Flow Projections
  • Time Equivalence

DAY 2

Cash-Flow Modelling and Project Decision Analysis 

  • Financial Modelling and Project Evaluation
  • Rate of Return Computations (IRR)
  • Determining the Internal Rate of Return (IRR)
  • The Risk of Not Understanding IRR

Analysing Project Specifics

  • Understanding the Project Context to Assist in Decision-making
  • Determine Stakeholders and their Level of Influence
  • Capture Requirements
  • Determine Scope of Work

DAY 3

The Cost of Capital 

  • Capital & Operating Expenditures (CAPEX / OPEX)
  • Estimating the Cost of Capital for a Project
  • Benefit-Cost Ratio (BCR)
  • Dis-benefits

Risk Modelling in practice 

  • Identify Risks
  • Forecasting Risk Impacts & Probabilities
  • Opportunity Costs, Sunk Costs & Salvage Value of a Project
  • Determining the Risk Priorities
  • The need for Company Cash Flow

DAY 4

Decision Analysis: Expected Value Concept 

  • Basic Probability Concepts
    • Fundamental Probability Concepts
    • Mutually& Non-Mutually Exclusive, Independent Events
  • Quantitative Project Risk Analysis
    • Semi-Quantitative Bow-Tie Process
    • Detailed Risk Quantification and Prioritisation
    • Expected Monetary Value
    • Scenario Planning
  • Sensitivity Analysis Tools
    • Simulation Process
    • Tornado Diagram
    • Defining the Variables - PERT

DAY 5

Decision Trees, EMV, Risk Responses and ROI 

  • Decision Tree Analysis
    • Developing Decision Trees
    • Solving Decision Trees
  • Risk Responses
    • Developing Risk Responses
    • Evaluating Response Relevance
  • ROI Analysis
    • Understanding ROI
    • Identifying ROI
    • Evaluating and Presenting your Project Options

 

MODULE II: Advanced Oil & Gas Project Economics, Risk & Decision Analysis

DAY 6

Development Economics

  • A Brief History of Energy Usage
  • Principles of Development Economics
  • Understanding of Economic terms
  • Inflation and its Impact on Nominal & Real CashFlows
  • Project Financing

DAY 7

Uncertainty in Investments

  • Handling Uncertainty in Capital Projects
  • Understanding Probability Concepts
  • The Expected Value Concept: Features and Pitfalls
    • Expected Monetary Value (EMV)
    • Expected Profitability Index (EPI)
    • Expected Opportunity Loss (EOL)

DAY 8

Risks and Uncertainties

  • Risk & Uncertainty
  • Risk Eversion and Risk Premium
  • Exploration Project Threats and Opportunities
  • Economic Decision Criteria
  • Decision Tree Analysis
  • Probability Distribution
  • Case Study: Monte Carlo Simulation

DAY 9

Setting-up Spreadsheet Calculations Using Excel

  • Spreadsheet Calculations
    • CashFlow Analysis
    • Sensitivity Analysis Calculations
    • Tornado Diagrams
  • Introduction to Monte Carlo Simulations using @Risk
  • Class Exercises: Setting-up an Oil Field Project

DAY 10

Practical Use of the @Risk add-on: Oil Field Development Model

  • Developing an Integrated Economic Model of an Oil Field Development
  • Developing and using an @Risk Model Analysis
  • Project Sensitivity Analysis utilizing data from @Risk Model
  • Training Seminar Final Review and Close
Certificates
  • On successful completion of this training course, GLOMACS Certificate with eligible Continuing Professional Education credits (CPE) from National Registry of CPE Sponsor and Professional Development Units (PDUs) / Contact Hours from Project Management Institute (PMI®), will be awarded to the delegates
Providers and Associations

Endorsed Education Provider

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A PMI registered mark

In Association With

PetroKnowledge

PetroKnowledge

Our collaboration with Petroknowledge aims to provide the best training services and benefits for our valued clients

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