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2024

Petroleum Economics

Code: Non-Technical

Duration: 3 Days

Location: Doha

Fee: QAR 8,800

Course Overview

The petroleum industry is extremely vast and critical to the success of a nation, and thus, organisations in this industry need to ensure that their practices are legal, ethical and competitive. Given this importance, analysis of the financial performance of these organisations becomes the primary objective to ensure eventual success.These organisations are required to build various financial models for various projects, and the possible risks are expected to be considered part of it.What is petroleum economics? Petroleum economics is one of the strongest and most influential aspects in the world economy, and thus, understanding petroleum economics is key to becoming a successful professional in the oil and gas industry. It involves the application of economic analyses at various stages of a petroleum project.

Course Objectives

Upon completion of this course, the trainees will be aware and understanding of the following:

  • Greater knowledge and a more detailed understanding of petroleum project economics
  • The ability and capabilities to independently drive and perform risk analyses and successfully address these in due course of the project
  • The skill and confidence to assume higher roles and responsibilities to track the financial performance of a project, thus building credibility and inviting more opportunities for career growth and progression
  • The knowledge and experience to coach and mentor other professionals on petroleum project economics and related risk analyses
  • The knowledge and capabilities to apply advanced techniques and methods as well as different models to analyse the financial performance of a project
  • The required foresight and maturity to predict possible risks and challenges and address them as part of the early plan
  • The ability and knowhow to provide financial advice to senior members and foster growth and development of the organisation

Who Should Attend?

  • Senior management of an organisation who need to understand the importance of petroleum project economic and risk analyses
  • Potential investors who should be able to understand and check the economic status of a project before investing further or for making any investment-related decisions
  • Managers and supervisors as well as members of teams responsible for conducting the financial analyses
  • Financial advisors and managers who provide financial advice to the senior management of an organisation
  • Contract specialists responsible for preparing contracts covering all terms and conditions
  • Asset managers managing the utilisation, upkeep and record of fixed assets of the organisation
  • External economics and auditors responsible for checking financial statements of an organisation and confirming adherence to all norms and procedures
  • Any other professional interested in knowing more about petroleum project economics and risk analysis

Course Contents

Module (01) Financial Modelling in the Oil and Gas Industry
  • Financial statements
  • Income statement
  • Balance sheet
  • Cash flow statement
Module (02) Overview of Cash Flow Analysis
  • Definition
  • Objectives
  • Methods of cash flow analysis
Module (03) Three Types of Cash Flows
  • Operations
  • Investing
  • Financing
Module (04) Advantages of Cash Flow Analysis
  • Maintain adequate cash reserves
  • Manage credit better
  • Help adjustments
  • Avoid production interruptions
  • Understand future plans and outcomes
  • Keep track of overdue payments
  • Manage surplus cash
 Module (05) Challenges in Cash Flow Analysis
  • The time horizon for analysis of cash flows
  • Overstatement of profitability in cash flow statements
  • Understatement of profitability in cash flow statements
  • Time value of money
Module (06) Most Common Risks Faced By Petroleum Companies
  • Political risks
  • Geological risks
  • Price risks
  • Supply and demand risks
  • Cost risks
Module (07) Types of Economic Indicators
  • Present value
  • Discount factor
  • Net present value
  • Internal rate of return
  • Payback period
  • Profit/Investment ratio
Module (08) Risks and Uncertainties in the Oil and Gas Industry
  • Expected value
  • Decision tree analysis
  • Farm-out decision
  • Probability analysis
  • Sensitivity analysis
  • Probability distribution
  • Monte Carlo simulation

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