TRAINING PETROLEUM ECONOMIC EVALUATION AND PROJECT COST ESTIMATION & RISK ANALYSIS

The course participants will have a thorough background understanding of the general concepts, procedure and terminology of petroleum economics and profitability analysis of Oil and Gas Projects. In particular it emphasizes the peculiarity and fiscal arrangements of the petroleum industry. It also reviews the various contractual and fiscal terms prevalent in the petroleum industry, and how the various arrangements affect investment profitability.

Project cost estimating is the predictive process used to quantify, cost, and price the resources required by the scope of the project, to better manage budgets and deliver projects that do not exceed the identified scope, and that are on time throughout the development process. The need to solidify the estimation process can be seen in four areas:

1. State financial plan

2. Creation of public satisfaction and a positive response

3. Project control

4. Problems currently being encountered.

1. OVERVIEW
   1. Indonesia Upstream Oil And Gas Business Process
   2. Upstream Oil And Gas Activity Phase
2. PRINCIPLE OF PETROLEUM ECONOMIC CALCULATION
   1. Oil and Gas Production Profile Which Will Be Produced
   2. Costs That Have Or Will Be Issued
   3. Oil and Gas Prices Per Unit Volume
   4. Sharing Mechanisms
3. PETROLEUM  ECONOMIC ANALYSIS
   1. Cash Flow Analysis
   2. NPV Analysis
   3. IRR Analysis
   4. MARR
   5. POT
   6. Incremental Analysis
   7. Comparing Economic Indicator
4. EVALUATION OF UPSTREAM OIL AND GAS PROJECT
   1. Payback Period
   2. Evaluation of Upstream Oil and Gas Project: Individual
   3. Evaluation of Petro-economic of  Executing Agency
   4. Evaluating  Economic Impact
5. PROJECT COST ESTIMATION:
   1. Project Cost Management Process
   2. Cost Estimating Process
   3. Cost Estimating Methodology
   4. Cost Estimating & Project Development Phases
   5. Basis Of Estimate
6. RISK ANALYSIS
   1. Oil and Gas Upstream Business Risk
   2. Risk & Uncertainty
   3. Expected Value Concept
   4. Decision Tree Analysis
   5. Farm-out Decision
   6. Probability Analysis
   7. Sensitivity Analysis
   8. Spider and Tornado Diagrams

• Petroleum Economists & Financial Analysts: Professionals structuring upstream cash flow models, calculating DCF metrics (NPV, IRR, Payback), and evaluating fiscal regime impacts.
• Cost & Estimating Engineers / Estimators: Technical personnel responsible for CAPEX/OPEX estimation, Class 1–5 cost estimates (AACE standards), contingency determination, and cost benchmarking.
• Project Managers & Project Controls Engineers: Leads managing onshore/offshore field developments who need to integrate cost control, schedule risk, and economic performance.
• Facilities, Reservoir & Drilling Engineers: Engineers translating technical designs (drilling campaigns, subsea tie-backs, platform installations) into realistic cost structures and economic models.
• Asset Managers & Business Development Teams: Strategic planners assessing bid round proposals, farm-in/farm-out opportunities, and portfolio capital allocation under uncertainty.
• Risk & Decision Analysts: Specialists performing quantitative risk analysis, decision tree modelling, sensitivity analysis, and Monte Carlo simulations.