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