Petroleum Economics and Risk Analysis

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Upstream Petroleum Economics and Risk Analysis
 From Conventional to Modern Approach
~ For avoiding common errors in valuation and improving investment decision making ~

A case-based three day workshops - December 7th-9th 2016, Bandung


Introduction
Current low crude price has made much oil and gas project was delayed while waiting for the situation strengthen. Many people in oil and gas industry are concerned that their organizations may be destroying value by making systematic errors in investment evaluation and decision.

An analysis on operating and investment costs is therefore very crucial task. Having low operating and investment costs per barrel product, corporate values and profitability will increase and eventually will make company be sustainable in the current situation.
Besides the strategy to optimize the asset portfolio in more efficient and effective, we need some advance economics tools to support our investment decision on development project includes the acquisition activity.   

Unfortunately, the static discounted cash flow (DCF) valuation methods currently in common use in these industries have systematic biases that can lead asset managers to fall in to all of these traps, and others.
Since 20 years ago, advance techniques had been developed and implemented, such as Monte Carlo Simulation, and Real Options (RO) approach. These techniques can help asset managers to make better investment decisions in dealing with current uncertainty related to the technical and market issues.

These automatically causes the different types and levels of uncertainty inherent in different asset designs and management plans to have appropriately different effects on asset value.



Key Highlights
1.   Appreciate that static DCF NPV is not enough to measure the whole value of an oil and gas project.
2.   Move beyond the static approach framework that is implicit in most current analyses to an explicit modeling and analysis using dynamic approach
3.   Have acquired the skills to identify, model and evaluate the oil and gas case in Indonesia using all available techniques (conventional to modern approach)

Training Scheme
1.   Learn the basic of investment evaluation techniques as well as the practical implementation of these techniques to oil and gas project assessment
2.   Enable participants to identify and quantifying risk using sensitivity and scenario analysis and Monte Carlo Simulation
3.   Learn how to asses the value of information in managing the uncertainty of the oil and gas project covered in decision tree analysis
4.   Bring participants up to date on recent development in project modeling and evaluation using advance valuation techniques.
  
Training       Material
1.  Extensive set of course notes detailing valuation concepts, numerical calculations and practical valuation examples.
2.  Excel Spreadsheets Model for valuing oil and gas project.
3.  Crystal Ball Software (Trial Version) for Monte Carlo Simulation

Computer Requirements
 As the course is Excel-Based, it would be highly desirable if      participants could bring with them their own laptop computer

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