Project Economics, Risk and Decision Analysis
Select Other "city & date"
Project Economics, Risk and Decision Analysis Course
Introduction:
This course covers the setup of economic analysis cases, including the estimation of recoverable reserves, production profiles, commodity prices, and project costs – CAPEX, OPEX, taxes, royalties, transportation, depreciation, before-tax (BTAX) cash-flow, after-tax (ATAX) cash-flow, international fiscal regimes (production sharing agreement and concessionary system).
The project Economics, Risk, and Decision Analysis training course starts from the basic required parameters of inflation, interest, and the time value of money. These concepts are then transformed into profitability indicators. Last but not least, the profitability indicators are then used to make investment decisions. The emphasis of the course is to bridge the gap between theoretical concepts and their practical limitations.
The participants will be able to appreciate the amount of information that they never thought of. In addition to this, the emphasis is also on the use of Excel’s financial functions.
Course Objectives:
By the end of the Project Economics, Risk, and Decision Analysis Training Course, participants will be able to:
- Learn how to reduce exposure and mitigate risks in projects and handle uncertainty
- Clarify concepts such as time value of money, cash-flow models, capital budgeting, IRR, NPV, income-producing investments.
- Maximize the return on investments by good decision-making processes based on the commercial viability of projects
- Improve your decision process, investment, and opportunity analysis
- Practice the hands-on experience in building your economic evaluation models and solving case study-based examples
Who Should Attend?
Project Economics, Risk and Decision Analysis training course is ideal for:
- Planning managers
- Project managers
- Analysts • Commercial managers
- Economists • Government officials
- Geologists • Business advisors
- Asset managers • E&P managers
- Product managers
Course Outlines:
Introduction
- Why economic evaluation
- Objective of the course
- Capital expenditure plans
- Basic process of economic evaluation
Inflation
- Inflation defined
- Types of Inflation
- Consumer price index
- Risk Factors (Simple Illustration)
Interest
- Simple interest
- Compound interest formula
- Nominal & effective interest rate
The Time Value of Money
- Equivalence
- Interest tables
- Future value of the present sum
- Present value of future sum
- Future value of ordinary annuity and annuity due
- Present value of ordinary annuity and annuity due
- Project financing
- Loan amortization schedule
Spreadsheet Applications
- Excel’s financial functions for equivalence
- Excel’s financial functions for loan amortization
Problems & Solutions
Before-Tax (BTAX) Cash-Flow
- Cash flow (CF) defined
- Gross revenue (GR)
- Basic data requirement
- Forecasting product stream
- Dependence of Capital
Expenditure (CAPEX)
- Economies of scale
- CAPEX during production
- Breakdown of Operating
Expenditure (OPEX)
- Develop rules of thumb for OPEX
- Gas processing flow diagram
- Typical oil production facilities
- Sample before-tax cash-flow
- Schematic of typical cash-flow
Cost Estimation
- Project cost management
- Various types of costs
- Cost estimation tools and techniques
- Level of cost estimates
- Dependence of cost estimates
- Criticality of cost estimates.
After-Tax (ATAX) Cash-Flow
- ATAX cash-flow additional variables
- Depreciation methods
- Sample After-Tax Cash-Flow
Weighted Average Cost of Capital
- Capital Asset Pricing Model (CAPM)
- Cost of equity and cost of debt
- Weighted average cost of capital
