Petroleum Economics

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Petroleum Economics

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About the course

The course provides a solid foundation of the basic economic factors and concepts pertaining to decision-making in the petroleum industry. The subject matter is presented using real-life scenarios and fictional characters that represent various “players” involved in the decision process.

The participants will receive an overview of petroleum economics, including an introduction to basic cash flow and net present value. The main types and elements of fiscal regimes around the world will be presented.

Designed For

Anyone requiring a fundamental knowledge of Petroleum Economics and oil and gas project recommendations.

Course Objectives

  • Upon completion, you will know how to:
  • Explain why project economics are necessary and discuss the methods for economic evaluation.
  • Explain the project lifecycle and who is involved.
  • Explain, common types of oil and gas upstream projects will be presented.
  • Review concepts and methods of forecasting production, prices and operating expenses.
  • Construct a cash flow stream, including company revenue, operating, and capital expenditures.
  • Explain the concepts of discounting and net present value.
  • Discuss multiple economic indicators, including DPI, IRR, hurdle rate, WACC and more.
  • Discuss the main types and elements of fiscal regimes around the world.  Build cash flows for concessionary systems and simple production sharing contracts.  Review the different types of service agreements.
  • Compare investments under different fiscal regimes.
  • Discuss and incorporate risk and sensitivity analysis in order to:
    • calculate EMV and ENPV.
    • Show the purpose of incremental investment analysis.
    • Review a general capital budgeting and the project selection process. Evaluate and make recommendations about potential oil and gas investments.

 

Instructor

Elijah Acquah-Andoh