This course has a supplemental book located in our spe bookstore entitled. The level of investment in the net zero teesside project will be instructive as to how seriously bp and other majors are taking their recent. Chem project economics and a great selection of related books, art and collectibles available now at. The course covers economic analysis techniques used to optimize the development and operation of mining, petroleum and nonnatural resource production and processing operations.
Most oil and gas development projects will likely have initial production data available. Analysis and valuation, risk management, and the future of energy. Also, to avoid repetition of the phrase oil andor gas, the term oil is used as a reference to both oil and gas unless specific reference. This is referred to as multiple rates of return and occurs primarily in the evaluation of acceleration projects. New to the second edition of project economics and decision analysis, volume 1 is a section on netback pricing and indexed netback pricing. The purpose of petroleum engineering is to examine, define, and implement methods and procedures for developing and extracting oil, gas and associated products so as to optimize profits and obtain a returnoninvestment that is commensurate with the risk incurred in making the investment. That is a good book which is opened with expectation. These developments make some associated works easier and may help to increase the available information, decrease cost and risks, and. The economics of petroleum refining home canadian fuels. The course textbook, economic evaluation and investment decision methods, 16th edition, 2019 by. Introduction to petroleum economics society of petroleum. Let bv be the book value of the depreciable asset, pa is.
This article presents basic aspects related to the economic evaluation process such as concepts and requirements as well as the nature of petroleum projects. Written in plain english for laymen and for experienced practitioners alike, it is a readerfriendly, clear, practical, stepbystep hands. Economic evaluations are also performed to determine reserves and the standardized measure of value for reporting purposes for publicly held companies. 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. Appears in 6 books from 19832008 more page 24 thus the companies of the producing countries undertook efforts at joint planning and cooperation, as for example under the auspices of the organization of arab petroleum exporting countries oapec. 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.
Economic evaluation of petroleum projects basic aspects. This includes financial reporting, capital budgeting, risk, markets and macroeconomics. Decision analysis for petroleum exploration, second edition, planning press. It contains insights into the underlying features and mechanisms of the oil industry and its many branches, as well as a special emphasis on relevant international problems. Oil and gas property valuation and economics spe book store.
Economics drives the entire oilgas producing industry. Petroleum engineering is central to safe, efficient and sustainable development of oil and gas assets to meet global energy and resource demands. This book is highly recommended to those who have got hands in evaluation and. Petroleum economics net present value internal rate of. Almost every decision is made on the basis of an economic evaluation. During that period there has been a certain amount of legislation, and a. Mitchell, editor iii facilities and construction engineering kenneth e. China united states mexico former ussr venezuela iran kuwait uae iraq. The report provided detailed examinations of important issues that affected the revenues of petroleum producers, refiners, marketers, and consumers. Property evaluation a return to first principles, paper spe 68595 presented at the 2001 spe hydrocarbon economics and evaluation.
Students should know how to evaluate projects by using net present value, risk models and optimization techniques and to use market models. 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. This handson and practical course takes you through the fundamental financial aspects of a petroleum company. Petroleum project economics and risk analysis workshop. An introduction to basic risk analysis will also be presented. Course trtope overview of petroleum economics ifp training. That became possible thanks to advanced programs, additional skillsand experiences as well as the outputs of mathematical and statistical sciences. Petroleum project economics during these two units, participants will gain an integrated and practical understanding of. Discussion progresses from an introduction to the industry, through principles and techniques of engineering economics, to the application of economic methods. 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. Editions ophrys, 1990 petroleum industry and trade 519 pages. Necessary reference materials will be posted on ecampus system. This course is an excellent introduction to the fundamentals of petroleum economics. Expanded basic petroleum economics training course.
Integrated petroleum economics and risk analysis society of. Introduction to petroleum economics and energy business environment introduction to financial statements and measures of performance project management fundamentals energy project economics and measures of performance project financing. Petroleum economics and management program spring and summer terms. 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. Additionally, the new edition expands the weighted average cost of capital wacc concept for better comprehension and to recognize its weakness in practice. Introduction to project economics in oil and gas exploration and production upstream industry, including basic project economics method and example of calcul slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. Upstream petroleum fiscal and valuation modeling in excel. Introduction to petroleum economics spe book store. Performing prudent investment evaluation becomes even more critical in the lower crude oil price environment andor development of marginal fieldprojects. 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. Jan 02, 2012 upstream petroleum fiscal and valuation modeling in excel.
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. Pdf economics modeling for petroleum exploration and. Obviously, united states imports a large portion of the petroleum that it consumes. Written in plain english for laymen and for experienced practitioners alike, it is a readerfriendly, clear, practical, stepbystep. Let bv be the book value of the depreciable asset, pa is the. This volume will enable the reader to successfully undertake pre project evaluations, especially in the areas of refining and petrochemistry. Economic evaluation is an essential step for assessing and studying and selecting new petroleum projects which involve different activities. The text also provides a detailed introduction to refinery engineering topics, ranging from the basic principles and unit operations to overall refinery economics. Introduction to petroleum economics is about the process of gathering project data, calculating whether a project should proceed and delivering recommendations. The economic, political and policy implications of this state of affairs are discussed in chapter 21. This highly interactive and scenariobased training programme will enable you to apply a structured approach to project justification, investment appraisal and decisionmaking in the upstream petroleum business. Scribd is the worlds largest social reading and publishing site. This book is a valuable tool in understanding the dynamics of the oil industry from both a broad and specific economic perspective.
The economics of petroleum refining understanding the business of processing crude oil into fuels and other value added products december 20. This book explains how to apply economic analysis to the evaluation of engineering challenges in the petroleum industry. Chemical project economics abebooks passion for books. Petroleum economics, by jean masseron, is a fine introductory text to the entire scope of activities and economic conditions facing the worldwide petroleum industry aapg bulletin. However i wish it could be updated by the authors or other scholars interested in petroleum industries. Petroleum economics, risk and opportunity analysis. Commercial debt finance energy project risk and uncertainty probability theory and quantitative analysis.
Carry out a comprehensive economic study evaluating petroleum related projects using risk and sensitivity analysis by means of spreadsheets. When designing a project, 90% of the work should go into project planning and development and only 10% in the writing of the application. A worked examples approach demystifies fiscal analysis which, unlike disciplines such as earth sciences and engineering, can be learned from a book. Page vii more than eight years have elapsed since the publication of the first edition of this book. We will reference the books in some of the lectures, but the course lectures will not be directly from the books. Apply depreciation schedules to an aftertax economic evaluation. Petroleum economics plays a vital role in the oil and gas industry and it lies at the heart of all decisionmaking. Petroleum economics and engineering abdelaal, hussein k.
The applicability of various probability distributions to the petroleum project development cost analysis is discussed. Students should have a basic understanding of the principal economic framework for the petroleum sector. Fundamentals of petroleum refining presents the fundamentals of thermodynamics and kinetics, and it explains the scientific background essential for understanding refinery operations. In major oil and gas export projects there is often a shift over the life of the project in t he bargaining power of the host government of the nation supplying the resource, the transit. Petroleum economics plays a vital role in the oil and gas industry and it lies at the. Economics modeling for petroleum exploration and production projects considering risk and imprecise data. 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. It is an excellent book because it considers all economic aspects of the petroleum industry.
The last section of the chapter presents a petroleum economic evaluation example. Carry out cash flow analysis, for petroleum related project and use common economic indicators to evaluate between competing alternatives. This course will introduce a variety of fundamental petroleum economic principles including revenue, expenditures, fiscal systems, risk analysis, and investment analysis. Growing refining overcapacity has resulted in recent refin. For example, building a comparable project on the united states gulf coast costs less than half of what it does. Carry out a comprehensive economic evaluation study for any petroleum related project including risk analysis and sensitivity study using spreadsheet contribute to the petroleum project investment within a solid economic system and do a detailed economic evaluation contribute to. 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. Search the worlds most comprehensive index of fulltext books. Generating a view on expected outcome and uncertainty 4 1. This book is a guide to the basic economics of petroleum production as practiced. Financial modeling and petroleum project economics. In this discussion, the terms property and project are used interchangeably as the objects of evaluation. 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. The petroleum economics monthly was published by pkverleger llc for thirtyfive years.
The best economic evaluations are team efforts consisting of geologists. Present the recommendations, conclusions and results of an economic evaluation in a wellorganized report. Download for offline reading, highlight, bookmark or take notes while you read petroleum economics. Petroleum economics distance learning training course. Arnold, editor iv production operations engineering joe dunn clegg, editor v reservoir engineering and petrophysics edward d.
The day program course offering will also include an introduction to a petroleum economic evaluation program widely used by industry and a project assignment will be given that includes the use of the program. Project management must involve detailed evaluation, assessment and mitigation of a wide range of risks in order to make the right decisions at the appropriate times. Introduction to project economics in oil and gas upstream. Analysis and valuation, risk management, and the future of energy simkins, betty, simkins, russell on. Key economic parameters for decision making petrowiki. You must purchase the text books before classes start. He has contributed to over 90 technical papers, edited one book on petroleum economics and engineering, and authored petroleum and gas field processing. Since its establishment in 1975, the institute of geoenergy engineering ige at heriotwatt university has delivered its internationally renowned. How to evaluate the economic viability of a project. Example of an oil price forecast displaying both real escalation lower curve and nominal terms, which includes both real growth and inflation upper curve. Pdf petroleum economics, risk and opportunity analysis. The certificate in petroleum economics is the ideal course for both individuals and corporate groups to develop this crucial knowledge. 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.
Project evaluation 183 discounted cash flow 183 factors which influence interest hurdle rate 184 185 internal rate of return irr 186 v. Introduction to probability distribution and petroleum. Pdf the economic structure of the petroleum industry differs. Within north america, recent demand for refined petroleum products has been flat to declining and is forecast to continue on this path. Petroleum economics ebook written by jean masseron.
Dec 24, 2015 introduction to project economics in oil and gas exploration and production upstream industry, including basic project economics method and example of calcul slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. Petroleum economics free download as powerpoint presentation. The mian book can be purchased online and takes a few days to arrive. 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.
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