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6 - OGE - Oil & Gas - General/Miscellaneous

OGE 101 - Petroleum Economics and Portfolio Management

Code Start Date Duration Venue
OGE 101 11 March 2024 5 Days Istanbul Registration Form Link
OGE 101 15 April 2024 5 Days Istanbul Registration Form Link
OGE 101 20 May 2024 5 Days Istanbul Registration Form Link
OGE 101 24 June 2024 5 Days Istanbul Registration Form Link
OGE 101 29 July 2024 5 Days Istanbul Registration Form Link
OGE 101 02 September 2024 5 Days Istanbul Registration Form Link
OGE 101 07 October 2024 5 Days Istanbul Registration Form Link
OGE 101 11 November 2024 5 Days Istanbul Registration Form Link
OGE 101 16 December 2024 5 Days Istanbul Registration Form Link
Please contact us for fees


Course Description

Petroleum Economics has a vital role to play in the Oil & Gas Industry and it lies at the heart of all decision making.  Various techniques have evolved over time in determining and calculating economic inputs, evaluating investments, quantifying risk and generating feasible portfolios. Petroleum Economics brings together information and expertise across the E&P spectrum and a clear understanding of concepts such as cash flow analysis, organizational challenges, price forecasting, cost drivers and risk management is required. 

Successful oil and gas business needs continuously review, value and risk assessment with a view to optimization of the overall performance of each asset in the portfolio considering changing global and local economic parameters. A strategic and a dynamic approach is needed to manage uncertainties, exploit synergies between corporate values and economic targets.

Broad understanding of petroleum economy requires technical, commercial and governmental structures to operate oil and gas asset successfully. Modern portfolio management consists construction of sophisticated models to value the risk and characterize alternative combinations of asset development. Such models provide access to technical components to aid decision-making, such as feasible envelopes and efficient frontiers defined in terms of financial and non-financial metrics over defined planning horizons 

Course Objectives

  • Review the common types of oil and gas upstream projects
  • Appreciate and apply the concepts and methods of forecasting 
  • Identify all elements of a project lifecycle and involvements
  • Set up and use a cash flow forecast
  • Apply the concepts of the time value of money
  • Review the main types of oil and gas fiscal regimes around the world and evaluate them
  • Discuss and incorporate risk, sensitivity and uncertainty analysis
  • Prepare, analyze and make decisions based on general capital budgeting and the project selection process
  • Evaluate and make recommendations about potential oil and gas investments
  • Use and evaluate Budgeting and Scenario Management for Project Management
  • Consider alternative budgeting systems and approaches: what they are and which to choose

Who Should Attend?

  • Chemical engineers
  • Petroleum engineers
  • Non-financial managers seeking to understand economic mechanism
  • Marketing and Sales Staff
  • Distribution staff
  • Financial staff to obtain skills for the economics of petroleum

Course Details/Schedule

Day 1

  • Basics Petroleum Econimics
  • Importance of Economics for Decision Making
  • Regulatory, Project and Macro Economic Input to Project Evaluation
  • What are the Key Economic Indicators, Pros, Cons, etc.?
  • Discounted Cash Flow  
  • Impact of Uncertainty
  • Decision Trees
  • Value of Information
  • Stochastic Perspective and Monte Carlo Analysis
  • Portfolio Theory
  • More complex techniques

Day 2

  • Petroleum Fiscal Systems
  • Evolution of Government/Oil Company Interaction
  • Management of Petroleum Resources
  • Creating the “Best” Fiscal Systems
  • Fiscal Regime Design Principles
  • Types of Fiscal Regime
  • Evolution of Petroleum Fiscal Systems
  • Concession Agreements
  • Production Sharing Agreements
  • Service Contracts
  • Examples of Different Fiscal Regimes and Specific Mechanisms

Day 3

  • Portfolio approach for asset and corporate management
  • Portfolio characterization: special requirements of upstream asset portfolios
  • Strategic dimensions to portfolio construction and business development
  • Capital allocation issues for asset portfolios
  • Background to modern portfolio theory
  • Access to resources and sustainability scenarios
  • Key success factors and winning portfolio combinations
  • Organizational issues associated with portfolio management teams

Day 4

  • Identification and classification of information assets
  • Portfolio analysis techniques and tools
  • Asset synergy: selecting assets to fit with an existing portfolio
  • Portfolio approach to implementing a quantified strategy
  • Portfolio uncertainty and probability of achieving key strategic targets
  • Balanced scorecard technique as a portfolio management tool
  • Techniques to identify optimum portfolios
  • Linear and non-linear optimization techniques compared

Day 5

  • Asset, Portfolio and Corporate Risk Management
  • Competitive bidding theory versus practice
  • Risk preferences impact portfolio management decisions
  • Above-ground and sub-surface risks and opportunities
  • Probabilities and expected values used to evaluate upstream assets
  • Enterprise risk management: national oil company case
  • Methodology for risked portfolio-simulation models
  • Simulation analysis of a hypothetical portfolio of upstream assets
  • Combining simulation, optimization and risk and strategy analysis
  • Portfolio approach to acquisition and divestment decisions
  • Portfolio challenges and pitfalls to mergers and acquisitions
  • Taking a global perspective to cope with dynamic environments