Advanced Oil & Gas Project Economics, Risk & Decision Analysis

The petroleum industry is one of the most important, highly capital intensive and risky business. Global exploration and production spending in 2013 was $644 billion, up 7% from $604 billion the year before. In 2014, the exploration budgets reached $654 billion but this fell to $521 billion in 2015 and in the following year, 2016, there was a further decline of 27%. This year’s global exploration and production spending is expected to increase 7%. The upstream sector’s profit margins are under real pressure from many factors such as higher costs of developing new reserves, less oil and gas found per foot of exploration drilling, rising inflation, global oversupply and price volatility. Competition for investments, for acreage / concessions, aging of existing reservoirs, the of unconventional oil and gas revolution all contribute business risk and uncertainty. Petroleum industry projects are by their very nature risky, the challenge however is in assessing, managing, and mitigating this risk proactively. The three biggest planning challenges are predicting costs, assessing profitability, and risk management. All these tasks occur in the early stages of capital planning and failure to adequately evaluate these elements can lead to heavy losses. This training course will highlight: Identification of the stages required in the risk analysis process, i.e., preparing, modeling, and running risk analysis Development of the risk model, assessing probabilities to various variables, risk analysis, and explore the impact of uncertain variables Enable the participants to create reports such as, tornadoes diagrams, scatter plots and cumulative probability functions, using excel Application of decision trees and Monte Carlo-based simulations to generate profitability indicators Enable the participants to develop probabilistic cashflow reports along with probabilistic profitability indicators for decision-making