Introduction to Economic Evaluation: o Cost and Value of Money, Risk factors, Discount Rates, Inflation Rates, Cash Flow schedule o Economic indicators: NPV, IRR, Financial Exposure, PI, POT, Break Even Price
o Methodology for arbitrating between compatible and incompatible projects
Reminder of the fiscal and legal environment of the Petroleum Activity:
o Concession systems / o Production Sharing Systems
o Service and Risk Service Contracts
Modeling of a field development under different fiscal terms:
o Practical exercise: Field Development under a Concession system
o Practical exercise: Same Field Development under a Production Sharing System
o Comparison of both systems: Impact on the Barrel Split and on the Booking of Reserves
o Key parameters affecting the value creation for the Oil Company and for the Government
o What is to be negotiated and how?
Financing plan and financial costs, Equity Analysis:
o Introduction to the key elements in Financial Statements and Corporations Annual Reports
o Corporate and Project Finance / Typical financing plans in the Petroleum Industry
o Practical modeling of midstream and upstream projects using project finance
o Advantages and risks associated to financial leverage
Risk assessment at development and at exploration levels:
o Sensitivity analysis on field development: Spider and Tornado Plots
o Handling the uncertainty on reserves: Basics of Monte Carlo simulation
o Exploration risk, probability of success and decision trees, Exploration EMV
o Key contractual and fiscal terms affecting the risked economy of exploration
Discussion and conclusion