Training for the Future


Petroleum Project Economics and Risk Management Malaysia

Course Code: PPERMM

Dates: 1 Apr - 12 Apr | 26 Aug 6 Sep

Price: £4500

Duration: 2 Weeks


Course Objectives

The course will enable participants to apply a structured approach to project justification, investment appraisal and decision making in the upstream petroleum business


Who Should Attend?

Those with little or no previous project investment appraisal experience


Prerequisite Course

None


Course Overview


Basic concepts
Identifying project cash flows and sources of information
How to calculate the Accounting Rate of Return (ARR)
Project payback. Net present value (NPV). Internal rate of return (IRR) and the cost of
Capital. Profitability index (PI). Strengths & limitations of each method
Project ranking - how to choose the best alternative
How to optimise expenditure
How to deal with inflation
Taking account of taxation
Accounting measures vs. Economic measures
Understanding other financial criteria for decision making. Balancing short term vs. long term business objectives
Economics, risk and decisions - decision to points are risk points
Decision points for oil fields and gas fields. Risk & probability definitions and concepts. Risk identification, measurement & management. Forecasting as risk management. Assumptions, sensitivities & risk premia
Exploration and appraisal decisions, uncertainty, risk and exposure Monte Carlo Simulation
Economic models and spreadsheet design
Development decisions
Work scope definition and options. Decommissioning economics & risks. Cost estimating and
Contingencies. Financing options. Construction contracts
Further development decisions and economic cut off
Preparing convincing project proposals
Post project appraisal



Learning Goal


Upon completion of the course, participants should be able to:

apply economic and risk management evaluation tools for the oil & gas project proposals
identify and quantify key uncertainties during field development and full life cycle economics
calculate the economic and financial viability of expenditure proposals projects under risk conditions
develop a structured approach to measuring, managing and combating commercial risk
assess the ranking of alternative projects
prepare convincing project proposals in a way that will win management, partner and government approval
improve project and business outcomes


Course Materials

Course notes
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