o Oil and gas market fundamental
o Resource access and allocation method
o Classifications of resources & reserves
o Reserves definitions and estimation methods
o Key elements of proved reserves
o Production decline equations and analysis
o Production forecasting using spreadsheet
o Economic life estimation
o Upstream cost classifications revisited
o Factors driving upstream costs and cost dynamics

o Capital sourcing for oil and gas projects
o Project performance models
o Capital recovery mechanisms
o Cash flow classification—BIT or AIT; Real or Nominal
o Cost of capital and hurdle rate
o Time value of money concept
o Discounted cash flow model and analysis
o Popular performance indicators—NPV; IRR; GRR; PO; AROI
o IRR and its limitations
o Screening and selection economics—MEI or NMEI
o Decision rules & interpretations of indicators
o NPV profile, Fisherian effects and incremental economics
Syndicated Exercise: Petroleum production forecasting using spreadsheet applications and discounted cash flow modeling applications and incremental economic analysis.

o Economic rent theory and rent extraction spectrum                                                                        o Why fiscal systems?
   o HG & Firms objectives
   o Features of Concessionary & Contracture regimes
   o Fiscal instruments & contract terms
   o Contracts—JV, PSC, R&T, R-factor
   o Designing fiscal terms—what to look for
   o Elements of PSC
   o Fiscal system comparisons

Petroleum fiscal systems modeling, economic analysis and system performance measures
o Cost recovery specifications
o Profit oil sharing mechanism
o Cost recovery items – ITC vs ITA vs Uplift
o PSC specific provisions & implications
o PSC cash flow distributions
o Commerciality threshold, ring-fencing & GPO
o Stakeholder mutuality of interests and concerns

Toggle Content

o Language of risk and uncertainty, mean, mode, median
o Probability distributions and curves
o Introduction to stochastic simulation process
o Stochastic model specifications
o Defining stochastic assumptions
o Setting simulation preferences
o Correcting for input dependencies
o Creating and using sensitivity charts
o Correlation coefficients and interpreting simulations
o P-values and expectation curves and stochastic outputs
o Certainty intervals & interpretation of output statistics

o Develop and apply deterministic contractual and concessionary economic cash flow models using spreadsheet
o Demonstrate stochastic analysis of contractual and concessionary economic cash flow models using excel add-in software package.