Oil and Gas

1. Evaluate uncertainties for projects at different stages of the E&P lifecycle;
2. Formulate problems probabilistically and systematically to assess risks & uncertainties, including exploration, appraisal, marginal, tie-backs, cluster developments;
3. Investigate investment profitability using decision analysis: Develop decision trees to lay-out the logic of the decision and evaluate the robustness of the decision;
4. Validate data using statistical distributions and combine them using both parametric and Monte-Carlo methods;
5. Evaluate forecasts and present them effectively including the correlation between variables. E&P Project Cost Estimation & Control;
6. Integrate risk and uncertainty into key performance indicators;
7. Understand the economic & contractual framework;
8. Project finance, non-technical risk mitigation & control topics (includes oil & gas accounting principles);
9. Portfolio management; asset aggregation, methodology and processes

Day One (Pete Smith)

• Introduction
• Risk analysis:
• Utility curves, risk attitudes, and cognitive biases
• Deterministic versus probabilistic: what is the difference?
• Histogram, pdf, cdf, percentiles, mean, mode, median, standard deviation
• Monte Carlo and Applications: A review of the most common distributions used

• Investment profitability – risk and decision analysis
• Probability definitions, objective and subjective, calculation rules, expected value
• Decision trees or Bayes formula and the Value of Information (VOI)
• Practice of E&P contracts economic modeling

• E&P Project Cost Estimation & Control
• Cost estimation vs. project maturity
• Uncertainty levels understanding
• Tools

• Economic & contractual framework
• Introduction to project economic valuation
• Overview of petroleum contracts
• Multiple fiscal regimes
• Unitization principles and examples

• Project valuation
• Price forecasts
• Valuation of Reserves
• Valuation of Resources
• Project Finance, Non-technical Risk Mitigation & Control
• Sources of non-technical risk
• Risk sharing and mitigation
• Non-recourse project finance and Reserves Based Lending
• Oil & gas accounting principles
• Management/project control
• Rolling forecast principles

• Portfolio management:
• Components, and determinants of asset valuation at different stages
• Asset aggregation and portfolio optimization: tools of choice to compare projects, expected results and budget efficiencies,
• Review of methodologies and processes
• Contribution of risk analysis for portfolio management