FUNDAMENTALS OF UPSTREAM

PETROLEUM ECONOMICS AND

RISK ANALYSIS
23 25 June 2014 | Kuala Lumpur | Malaysia
30 June 2 July 2014 | Perth | Australia

ECONOMIC ASPECTS OF
PRODUCTION SHARING
CONTRACTS

BACK BY
POPULAR
DEMAND!
7th RUN!

25 27 June 2014 | Kuala Lumpur | Malaysia

2 4 July 2014 | Perth | Australia

WITH DAVID FISHMAN

CHIEF ECONOMIST
Petroleum Reservoir & Economics Group in
the Robertson CGG Company

Please visit us for more information:

www.petroedgeasia.net

FUNDAMENTALS OF UPSTREAM ECONOMICS & RISK ANALYSIS

23 25 June 2014 | Kuala Lumpur | Malaysia * 30 June 2 July 2014 | Perth | Australia

Course Overview
An Introduction to Upstream Economics and Risk Analysis is a practical course
that will enable delegates from all technical and commercial disciplines to
become familiar with the theories and methods used to value oil and gas
prospects, discoveries and fields in the international petroleum industry.
This course will help you:
x
x
x

Develop your knowledge of upstream economic evaluation

Understand practices to quantify uncertainty and risk in exploration,
reserves and cost determination, and economic evaluation
Contribute to economic evaluation and appraisal for exploration,
development and production activities

Notes for participants:

- A comprehensive course manual
with model answers to the
workshop questions will be
provided.
- A working knowledge of
Microsoft Excel is required.
- Delegates will be required to bring
a laptop with Excel loaded to
undertake the workshops.

Course benefits include:

x
x
x
x
x

Gaining experience of economic evaluations

Constructing production sharing contract and tax and royalty concession spreadsheets
Understanding the government and oil company perspectives
Understanding the differences between petroleum production fiscal and contract terms
Evaluating investment opportunities

Detailed course schedule:

Day 1 Morning
Introduction & Cashflow Analysis
Objectives of undertaking an economic
analysis
What makes the oil and gas industry
different?
Cashflow equations
Real vs Nominal cashflows
Discounted Cash Flow
The time value of money, compounding &
discounting
Discount rate, discount factor & discount
method
The cost of capital and the hurdle
discount rate
Day 1 Afternoon
Capital Budgeting Techniques
Undiscounted methods (PIR, Payback,
Exposure)
Discounted methods (e.g. NPV, IRR, DPIR)
Valuing an asset, making development &
investment decisions

Oil and Gas Asset Net Cash Flow Project

Components
Reserves, production and sales profiles
Tariff income
Capital, operating, transportation
& abandonment Costs
Working interests, carried
interests, ORRs & NPIs
Day 2 Morning
Oil and Gas Asset Net Cash Flow Economic
Components
Inflation, cost escalation
Oil and gas prices
Interest rates & exchange rates
Day 2 Afternoon
Advanced Petroleum Economic Techniques
Aggregation and consolidation
analysis
Ring Fences
Incremental analysis

Get your wh
hole team trained cost effectively through in--house training!
Call us at +65 67419927 or email info@asiaedge.net
www.petroedgeasia.net

FUNDAMENTALS OF UPSTREAM ECONOMICS & RISK ANALYSIS

23 25 June 2014 | Kuala Lumpur | Malaysia * 30 June 2 July 2014 | Perth | Australia

Petroleum Economic Models

Introduction
Self-build models
Tailor made models
Third party models
Discrete Economic Solutions
Sensitivity analysis
Spider & Tornado diagrams
Minimum economic reserve &
break-even oil price
Probabilistic Economic Solutions
Introduction to probability analysis
Expected value (EMV)
Farm-In and Farm-Out analysis
Exploration prospect portfolio
management
Decision tree analysis
Exploration prospect analysis example

Day 3 Morning
Oil and Gas Asset Net Cash Flow Taxation
and Government Take Components
Production sharing contracts
Royalty & taxation systems
Risk service & other systems
Calculating royalties, taxes, cost recovery
and profit oil splits
Day 3 Afternoon
Fiscal Systems in practice
The concept of marginal government
take: its meaning and uses
Practical guide to calculation of marginal
government take
Worldwide comparison of government
take
Review of fiscal systems including a selection
from those of:
Tanzania, Australia, Angola, Ghana, Brazil,
Indonesia, Vietnam, India, Namibia,Malaysia
Norway, USA, Canada,PNG

About your expert course facilitator

David Fishman
ROBERTSON CGG Company - BEARDALL-PARRY
DEPARTMENT
David Fishman is the Chief Economist of the Petroleum Reservoir &
Economics Group in the Robertson CGG Company, Wallingford office.
The Economics & Facilities Engineering Department at Wallingford
encompasses Beardall Parry & Associates who have been undertaking
Petroleum Economics training for over ten years.
With over 25 years experience in the international oil industry, Davids
assignments have included: preparing independent petroleum
consultant reports for the privatisation of Britoil, British Gas and
Enterprise Oil; independent valuation reports for numerous project and
corporate finance loans; and many data room exercises involving field or
portfolio acquisitions. Much of this experience was gained as Managing
Director, Economics with ERC Energy Resource Consultants, a leading international petroleum
consultancy which became part of the Robertson group in 1986. With ERC, David had overall
responsibility for all economic and financial aspects of consulting projects from 1980 until 1992. Over
26 company flotations and rights issues, 8 Defence documents during contested take-overs and 19
project and corporate financings were carried out by ERC during this period. David was Vice President,
Commercial with Atlantis (PGS) from its inception in 1996 until mid 2001. He was responsible for the
economic and commercial evaluation of all new projects under evaluation and of Atlantis licence
interests located offshore Tunisia, in the northern Arab Emirates and in northern Oman. He also
served as the Economist in the Planning Department of the head office of Perenco in London from
November 2006 until March 2008 following which he rejoined Robertson CGG Company as Chief
Economist having been an associate of Beardall Parry since 2002.

Get your wh
hole team trained cost effectively through in--house training!
Call us at +65 67419927 or email info@asiaedge.net
www.petroedgeasia.net

FUNDAMENTALS
OF UPSTREAM
ECONOMICS
& RISK
ANALYSIS
ECONOMIC
ASPECTS
OF PRODUCTION
SHARING
CONTRACTS
23
Lumpur
| Malaysia
* 30*June
July2014
2014 || Perth
Perth || Australia
25
25
27June
June2014
2014| |Kuala
Kuala
Lumpur
| Malaysia
2
72
July
Australia

Course Overview
This three-day course reviews the upstream economic aspects of Production Sharing Contracts (PSCs).
It describes in detail the financial structure and mechanisms of PSCs across the world and the
economic and value implications of the various terms. The course is punctuated with a number of
worked examples and case studies taken from actual contracts in the global oil industry.
The course is designed for those working in the upstream industry who are not familiar with PSCs and
who require either a working or practical knowledge of the financial mechanics and economic aspects
of the contracts. Whilst it is suitable for delegates from all technical and commercial disciplines, some
background knowledge in upstream economics would be an advantage.
Course participants will:
x
x
x
x
x
x
x

Investigate cost recovery

Understand profit sharing
Learn about bonuses and bonus calculations
Examine sliding scale fiscal mechanisms
Identify taxation liability and allowances
Study ring fence calculations and examples
Analyse and discuss the economics of PSCs

Detailed course schedule:

Day 1 Morning
Oil and Gas Asset Net Cash Flow Taxation
and Government Take Components
Production sharing contracts
Royalty & taxation systems
Risk service contracts & other systems
Calculating royalties, taxes, cost recovery
and profit oil splits
Day 1 Afternoon
Fiscal Systems in practice
The concept of marginal government
take: its meaning and uses
Practical guide to calculation of marginal
government take
Worldwide comparison of government
take
Review of fiscal systems including a selection
from those of:
Tanzania, Australia, Angola, Ghana, Brazil,
Indonesia, Vietnam, India, Namibia,Malaysia
Norway, USA, Canada,PNG
Day 2 Morning and Afternoon
Fiscal Systems in practice
- Continued

Notes for participants:

- A comprehensive course manual
with model answers to the
workshop questions will be
provided.
- A working knowledge of
Microsoft Excel is required.
- Delegates will be required to bring
a laptop with Excel loaded to
undertake the workshops.
Upstream Economics Workshop: The PSC
Model Case Study
Introduction to the gas discovery, PSC
based case study
Establishing the economic model
framework, structure & calculation flows
Understanding the PSC fiscal structure &
algorithms
Determining the field, economic & fiscal
data and building the input decks
Step by step construction and audit of the
PSC model
Running the economic cases & evaluating
the results
Summary and closing remarks
Day 3 Morning and Afternoon
Upstream Economics Workshop: The PSC
Model Case Study - Continued
The Economics of LNG including a Workshop
LNG pricing around the world
Calculation of the LNG netback price
Quick guide to LNG process and costs
Construction of the LNG economic model
Determination of transfer price between
the Upstream project and LNG plant
Consideration of the returns to the LNG
project versus the returns to the
Upstream project
Summary and Closing Remarks

Get your wh
hole team trained cost effectively through in--house training!
Call us at +65 67419927 or email info@asiaedge.net
www.petroedgeasia.net

FUNDAMENTALS OF UPSTREAM ECONOMICS & RISK ANALYSIS

23 25 June 2014 | Kuala Lumpur | Malaysia * 30 June 2 July 2014 | Perth | Australia
EARLY BIRD 9
NORMAL 9
FUNDAMENTALS OF UPSTREAM PETROLEUM ECONOMICS & RISK ANALYSIS (3 Days only)
Kuala Lumpur | Malaysia
SGD3,899
SGD4,099
23 25 June 2014
Perth | Australia
AUD3,899
AUD4,099
30 June 2 July 2014
ECONOMIC ASPECTS OF PRODUCTION SHARING CONTRACTS (3 Days only)
Kuala Lumpur | Malaysia
SGD3,899
25 27 June 2014
Perth | Australia
AUD3,899
2 4 July 2014

SGD4,099
AUD4,099

petroEDGE recognises the value of learning

in teams.
Group bookings at the same time from the
same
company receive the following:
3 or more at 5% off
5 or more at 7% off
8 of more at 10%
All other promotions including early bird are
exclusive of the group discount.

FULL 5 Days
Kuala Lumpur | Malaysia
23 27 June 2014
Perth | Australia
30 June 4 July 2014

SGD5,599

SGD5,799

AUD5,599

AUD5,799

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Get your wh
hole team trained cost effectively through in--house training!
Call us at +65 67419927 or email info@asiaedge.net
www.petroedgeasia.net