E&P Projects Value Management

PIMP/PVMGB

Who should attend?

  • This course aims to acquire a thorough understanding of how upstream projects are structured and carried out within their contractual and economic framework.
Audience :
  • Oil & Gas professionals from various disciplines who require formal training in management and are particularly interested in a comprehensive view of the methodology and tools needed for evaluating projects in the exploration-production sector.

Level : Proficiency

Course Content

  • STRUCTURE & DYNAMICS OF UPSTREAM PROJECTS

      • Strategic issues in Oil & Gas: structure of the Oil & Gas industries, picture of worldwide Oil & Gas supply and demand, primary objectives of an oil company, economic analysis and long-term planning, E&P portfolio components and risk dynamics, focus on geological risk and economic risk, important value drivers, life cycle of upstream assets, critical decision points and value creation, E&P assets valuation, stakeholders, business and operational processes.
      • Exploration phase: exploration rounds and blocks, fundamental questions for a managers, speculation and decision process, petroleum system, and prospect evaluation, techniques and expertise involved (geology, geophysics, geological modeling, exploration drilling), exploration risk and reward analysis, probability of success and decision tree analysis, expected monetary value, exploration block valuation and basis for decision in exploration, impact of state participation, exploration risk mitigation through farm-out agreements.
      • Development/production phase: from discovery to development and production, appraisal phase, uncertainties and reserves evaluation, reserves probability distribution and classification, techniques and expertise involved (reservoir modeling, drilling and well completion, recovery mechanisms, production profiles, Oil & Gas processing, production facilities), field development schemes, capital expenditures, operating expenses, abandonment issues and costs, concept of value of a discovery for an oil company, decision tree analysis for choosing optimal strategy, cost and value of information.
      • E&P contractual framework: strategic objectives of States and IOCs, state participation and role of NOCs, economic rent sharing, risk mitigation through joint-ventures, different types and structure of patrimonial contracts, important obligations, fundamental concepts in joint-operating agreements, decision committees, financing of operations, unitization agreements, cost recovery, sharing value through mechanisms of production-sharing contracts and risk-service contracts, government take, state control and supervision.
  • OIL & GAS PROJECT STUDIES & MANAGEMENT

      • Front-end development studies: front-end loading as a foundation for smarter project execution, phases and deliverables (prefeasibility stage, feasibility stage, basic engineering), project scope definition and execution plan.
      • Fundamentals of financial management: corporate finance, project finance, cost of debt capital, cost of equity capital, balance sheet, return on capital employed, return on equity, weighted average cost of capital and fundamental condition for project value creation, cost accounting and budgeting.
      • Field development project economic evaluation: methodology for assessing the economic value of an Oil & Gas field development project, global project cash flows (Revenues, Capex, Opex and Gvt Take), discounting, risks and discount rate, economic indicators (net present value, internal rate of return, pay-out-time), quantitative risk analysis.
      • Case study: oil field development project with State participation within the framework of a PSC.
      • Principles of project management: large capital Oil & Gas projects challenges and performance, final investment decision, project risks, organizational risks and external risks, FEED and EPC contracts, project organization, control and management (schedule, cost, quality, HSE, and risk issues), keys to successful project delivery.

Learning Objectives

  • Upon completion of the course, participants will be able to:
  • identify the various components in the Oil & Gas chains,
  • see the various technical components of upstream projects,
  • grasp the essence of Oil & Gas contracts, and economic rent sharing,
  • comprehend the risks involved in and the decision process for exploration-production projects,
  • follow the methodology of Oil & Gas project studies leading to a final investment decision,
  • understand the concepts behind various indicators of value and profitability,
  • see the fundamentals of project management techniques applied to E&P projects.