About this Training Course 

This 4-day practical training workshop offers participants the opportunity to explore many oil and gas decision challenges, including hands-on application of industry-standard tools and techniques to assess realistic scenarios and associated data. The essential commercial drivers are held in perspective at all times.

The course commences with a brief overview of the critical Business Environment factors within which all Energy industries operate, with pointers to major sources of market uncertainty impacting potentially massive investment decisions. The more recent major influences of Climate Change policies and completely unexpected European warfare both contribute to accelerating Energy Transition as an unavoidable backdrop to Oil and Gas Investments of all kinds Focus then shifts from the macro-economic, towards the realm of individual project commitments typical of the upstream petroleum sector, outlining key areas of uncertainty within the principal cashflow components. This leads on to various aspects of cashflow analysis and a brief review of the range of key economic and financial indicators at both project and corporate level, including the broad impact of various forms of taxation and contract mechanisms. A range of bespoke excel models is used to offer realistic hands-on experience concerning impact and interpretation of varying assumptions.

Risk and uncertainty definitions are clarified and linked to definitions of common financial value indicators. Common methods of quantifying uncertainties and risks are then described, from simple parametric methods to probabilistic simulations leading to the use of Decision Tree Analysis to analyse problems. These tools are then applied to technical issues over the field life cycle, from exploration risking to the quantification of value of information during field appraisal and on to production forecasting using both deterministic and probabilistic methodology. Human factors involved in identifying risk and quantifying uncertainties are explored, from the preferences implicit in utility theory to the behavioural heuristics which commonly lead to bias in technical judgement.

Risk diversification principles and associated Portfolio Management theory are described on the final day, with some pointers as to how this might find practical application within E&P decision-making. The course concludes with brief review of a multi-faceted case study in which ‘management teams will have the opportunity to assess a range of asset-related risks, and propose mainly qualitative resource allocation solutions – also including several political issues.

The course offers realistic tools and various practical commercial and technical techniques to identify, analyse and manage uncertainties and risk in exploration and production projects. Learning is reinforced by working on realistic case material to explore uncertainties and risks in the context of production forecasting, cash-flow management, incremental projects and asset portfolio manipulation. Economic models, Monte Carlo modelling and Decision Tree analysis software are employed during the course to develop practical skills in risk and portfolio management.