Petroleum Economics and Portfolio Risk Analysis (for Improved Decision Making Under Uncertainty) – GH Universal Hotel Bandung 19 – 22 November 2014

September 15, 2014 • Tell FriendsPrinter Friendly

This intensive course will provide participants with the tools and techniques to avoid some common errors in evaluation and execute investment decision with better assessment using Market Risk, Monte Carlo Simulation, Decision Tree, Real Options & Portfolio Management.


Key Highlights

  • Basic of evaluation techniques as well as the practical implementation of these techniques to upstream project assessment in PSC Regime
  • Identifying and quantifying risk using sensitivity analysis and Monte Carlo Simulation
  • Assessing risk market information in managing upstream project.
  • Making investment decisions in exploration and development project, acquisition project or bidding evaluation on block tender.

     Topic          Description

Basic Project Economics

  1. Overview of PSC regime
  2. Petroleum Economics (Key parameter, cash flow)
  3. Valuation Techniques (IRR, Pay back, PI, NPV)

Project Risk

  1. Deterministic Approach (sensitivity and scenario analysis)
  2. Probabilistic Approach (Monte Carlo Simulation)

Modern Project Economics

  1. Common errors in conventional technique
  2. Overview of Modern Valuation (Real Options)
  3. Conventional vs. Modern NPV
  4. The Use of Market Information
  5. Market Comparable approach ($/boe transaction and Paddock Siegel Smith Model)

Decision Under Uncertainty

  1. Decision Tree (EMV, Value of Information)
  2. Portfolio Management (Selection, Diversification and Optimization)
  3. Contingent Decision Analysis using Real Options


Case Study
  • Harvard Business Case Study : Penzoil vs Texaco
  • Acquisition on PSC Block
  • Evaluation of bidding proposal on Block Tender

  1. Extensive set of course notes detailing valuation concepts, numerical calculations and practical valuation examples.
  2. Excel sspreadsheets Model for petroleum projects evaluation
  3. Risk Simulator software (Trial Version) for Monte Carlo Simulation
  4. Free Book “A New Era of Project Economics and Investment Decision Techniques”
Further Information
Xperiential and Professional Training  (XP training)Menara Kartika Chandra Lt.2 R206 Jl. Gatot Subroto Kav 18-20  JakartaPh. 021-5251351,  Fax. 021-5256479.E-mail:

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