Economic evaluation in the petroleum industry paperback 20. You have to use the rate of return of the best alternative use of money as the discount rate. Kent saugier is a handson scientific, technology and business professional with twentyfive years experience in upstream oil and gas, offshore technology, economics, economic modeling, international petroleum contracts, project management, software applications and technology including design, licensing and commercialization. Petroleum economics net present value internal rate of return. It covers everything you need to know about the economics behind the petroleum industry, in very simple language. Economic evaluation in the petroleum industry free ebook download as pdf. This book is a guide to the basic economics of petroleum production as practiced throughout the world. His research interest covers the oil, gas, and refining industry and is related to cost assessment, fiscal analysis, infrastructure modeling, and valuation studies. Kelkar committee roadmap for fiscal consolidation ministry of. Similarly, the ministry of petroleum and natural gas. This course will introduce a variety of fundamental petroleum economic principles including revenue, expenditures, fiscal systems, risk analysis, and investment analysis. This course is designed for learning the basics of petroleum economics and project selection.
Introduction to petroleum economics society of petroleum. In particular, the pervasive presence of important distortions is the main reason it was necessaryor at least exceedingly usefulto construct these concepts. Feb 17, 2015 new york basel tm petroleum refining technology and economics fourth edition james h. Buyers representative determine your positions and interests on each issue. The comparison of methods of evaluation of project and firms 4. The petroleum companies generally make the decision for a certain petroleum project on the base of economics models. Orlandi encyclopedia of life support systems eolss these shows structural characteristics, relations of strength, economic and political dynamics which cannot be immediately attributed to the traditional life cycle of an industry and which indeed can no longer be repeated. Project economic issues have been pigeonholed into a very narrow concern with the calculation of economic rates of return, as opposed to a more fundamental. Economics is the primary link between basics of petroleum. Discussion progresses from an introduction to the industry, through principles and techniques of engineering economics, to the application of economic methods. Energy project economics and measures of performance. Project economics and uncertainty are recurring themes both in course presentations and.
Report of the committee on roadmap for reduction in import. This article presents basic aspects related to the economic evaluation process. Covers the application of a wide range of topics, including reservoir characterization, geology and geophysics, core analysis, well logging, well testing, reservoir management, enhanced oil recovery, fluid mechanics, performance prediction, reservoir simulation, digital energy, uncertaintyrisk assessment, information management, resource and reserve evaluation, portfolioasset management. The evaluation methods of project and oil firms 4 hours 1. Several key concepts that will be covered are the time value of money, cash flow basics, common economic indicators, fiscal systems and project selection fundamentals. Petroleum economics and engineering abdelaal, hussein k. An introduction to the oil and gas value chains and the identification of business opportunities along these chains. Vijay kelkar, whos been the secretary oil and finance in the past, has repeated verbatim a privately commissioned report that lobbies for big corporates including reliance, in his latest report on the hydrocarbon sector called roadmap for reduction in import dependency in hydrocarbon sector by 2030. The course provides a comprehensive overview of the practices of exploration and development petroleum economics and its application in valuing oil and gas assets to aid corporate decisions. And so, to improve the decision making process and to be able to face modern challenges, it is imperative to develop a robust solution of the petroleum economics model and an assessment of the associated risks. Participants will construct economic models, to include basic fiscal terms, production and cost profiles and project timing. Huge quantities of data are provided so that the casestudy method can be.
For each issue, list what your interest is and in parenthesis list your position based on each. Project evaluation 183 discounted cash flow 183 factors which influence interest hurdle rate 184 185 internal rate of return irr 186 v. Petroleum economics and engineering crc press book. Developed new methodology for evaluating in fill potential in tight gas reservoir.
These developments make some associated works easier and may help to increase the available information, decrease cost and risks, and. This article presents basic aspects related to the economic evaluation process such as concepts and. It is an excellent book because it considers all economic aspects of the petroleum industry. Economic and financial determinants of oil and gas. The training approach is based on principles of economic evaluation of petroleum related project with focusing on step by step developing economic models, determining economic indicators, evaluating and quantifying risks and uncertainties and making the right investment decision for the project. Basic petroleum economics mai 2004 ppm 2nd workshop of the china case study 2 investment decisions investment decisions are among the most important decisions that a companygovernment can take capital intensive irreversible high riskuncertainty. Due to similarity in content, petroskills recommends that participants take this course if they have no previous experience in this subject. Petroleum economics distance learning training course. The internationalization of china oil companies 4 hours 1. Oil prices on indian economy submitted for the award of doctor of. This course is an excellent introduction to the fundamentals of petroleum economics. Econ 2000 this course introduces students to the economics of energy at the micro level.
Kaiser has led several studies and published extensively in the field and regularly teaches petroleum economics at lsu and short courses for. Then the net present value means the increase in value by choosing this project instead of the best alternative. Expanded basic petroleum economics training course. The petroleum companies generally make the decision for a certain. Please visit the course list builder to get started. Cornelis van kooten university of victoria victoria, canada draft. It discusses the science of petroleum economics, starting from squareone, the tools of the trade that petroleum economists use, day in and day out, and also its application. Introduction to petroleum economics is about the process of gathering project data, calculating whether a project should proceed and delivering recommendations. Petroleum economics net present value internal rate of. The economic, political and policy implications of this state of affairs are discussed in chapter 21. Discussion progresses from an introduction to the industry.
Project management committee to focus on seamless execution of projects. An introduction to basic risk analysis will also be presented. This book explains how to apply economic analysis to the evaluation of engineering challenges in the petroleum industry. Involved in reservoir description field projects and integrated studies. Decisions through the lifecycle of a petroleum project 3 d seismic drill a wildcat drop appraisal drop drop develop in all these phases you have to take decisions investment analysis is used as a managerial tool to take such decisions accept work progr drop applybid license drop mai 2004 ppm 2nd workshop of the china case study 4 objectives. Review of the applications of decision tree analysis in petroleum. This book presents basic aspects of current petroleum refining technology and economics in quite a systematic manner. Introduction to probability distribution and petroleum. The presentation here is brief, providing the participant only with the basics that. Economic evaluation of oilproduction project with eor. That became possible thanks to advanced programs, additional skillsand experiences as well as the outputs of mathematical and statistical sciences. Basic petroleum economics by mari kvaal august 2004 3rd ppm philippines case stydy workshop 2.
The assessment of profit oil or gas should be conducted on the basis of self. Economic evaluation is an essential step for assessing and studying and selecting new petroleum projects which involve different activities. The last section of the chapter presents a petroleum economic evaluation example which presents a complete risk analysis leading to net present values npvs of the example project. Economic evaluation of petroleum projects basic aspects dr. Economics modeling for petroleum exploration and production projects considering risk and imprecise data thesis pdf available january 2016 with 10,901 reads how we measure reads.
Review of the applications of decision tree analysis in. Vijay kelkar, felt the switchover should be in a phased. The subjects treated are petroleum economics, project evaluation and corporate finance. Textbooks can only be purchased by selecting courses. This course will explain how to apply tools from petroleum economics which help make better decisions for upstream oil and gas opportunities. Planning document bullard houses mgmt47 negotiation. Petroleum economics is one of the most influential players in the world economy, so having a comprehensive understanding of this vital area is key for anyone working within the oil and gas or energy industries. China united states mexico former ussr venezuela iran kuwait uae iraq. Course philosophy petroleum professionals need to have a thorough understanding of the value chain and the global competitive landscape in which they operate. Economic evaluation of petroleum projects basic aspects. The 5 days sophisticated training course in petroleum economics is an entrylevel course designed to bridge gaps in your knowledge and give you true business advantage.
Gary colorado school of mines golden, colorado glen marcel dekker, inc. Aogo represents the group of oil and gas explorers which has interest in the indian hydrocarbon sector. Literally any other choice for an economics book will be a better one. The present study considers two important and complementary reasons. Analysis of financial performance of hindustan petroleum. The economic evaluation of projects in the bank tends to be overoptimistic and to neglect downside risksa tendency it shares with the banks macroeconomic forecasts. This new reprint, a collaboration between spe and the society of petroleum evaluation engineers spee, combines the subjects of property and project evaluation, economics, and finance by offering a selection of papers that were presented in spe publications and other forums over the past 30 years. Economic evaluation in the petroleum industry inflation prediction.
Report on recommendations to kelkar committee federation of. The kelkar report, submitted to the petroleum ministry in january 2014, has lifted verbatim material from an association of oil and gas operators aogo report. Mai 2004 ppm 2nd workshop of the china case study 28 1 calculate separately the present value of all the cashflow elements 2 add together the discounted cashflow elements time 012 cashflow100 80 70. Slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. The present value of a project is the sum of discounted cash flow elements. Esanda engineering petroleum economics and risk analysis. Petroleum economics and engineering crc press book this book explains how to apply economic analysis to the evaluation of engineering challenges in the petroleum industry. However i wish it could be updated by the authors or other scholars interested in petroleum industries. Economics for oil and gas projects under conditions of certainty and uncertainty.
The economic decisions continue throughout the producing life of the project. Importance of petroleum economics in decision making macroeconomic condition and project evaluation upstream economic evaluation time value of money cash flow analysis and present value key economic indicators for project evaluation probability and statistics in decision making uncertainty analysis tornado diagram, sensitivity analysis decision tree and monte carlo analysis. Steps to be taken to enhance domestic oil and gas production. Decisions through the lifecycle of a petroleum project 3 d. Economic decision criteria in this part we will see how how to use cashflow and discounting to decide whether a project is economic or not. This paper presents an economic feasibility study for co2 coupled with eor in a small mature brazilian oilfield. The applicability of various probability distributions to the petroleum project development cost analysis is discussed. Petroleum projects which involve different activities. Petroleum project economics and risk analysis workshop. The majority of ge 494 projects are specified such that the economic analysis is a.
Obviously, united states imports a large portion of the petroleum that it consumes. Petroleum project economics and risk analysis ihrdc. Scribd is the worlds largest social reading and publishing site. Petroleum project economics and risk analysis program objectives during this oneweek program participants will learn, in a practical and realistic manner, how to analyze the financial performance of oil and gas investments from both the project and corporate reporting perspectives. Info university of oklahomas p e department has 12 courses in course hero with 2. Pdf economics modeling for petroleum exploration and. Report of the committee on revisiting and revitalizing the public. The basic introduction of evaluation methods of oil project and oil firms 3.
Within north america, recent demand for refined petroleum products has been flat to declining and is forecast to continue on this path. Academic partnership for a masters of science degree in. Pdf petroleum economics, risk and opportunity analysis. International journal of research in management, economics and commerce issn 2250057x, impact factor. Petroleum economics, risk and opportunity analysis. The economics of petroleum refining home canadian fuels. Growing refining overcapacity has resulted in recent refin. Citlalli olivares planning document form negotiation. Participants, working in teams, will evaluate an oil and gas business opportunity in the republic of. View petroleum economics and project evaluation kelkar. Economics modeling for petroleum exploration and production projects considering risk and imprecise data. This chapter covers the basic economic principles that govern the oil and gas industry.
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