Trainer Profile

- Multidisciplinary instructors (reservoir, production, drilling)
- Regional NOC/IOC engineering advisors
- Guest speakers from petroleum economics and HSE backgrounds

Certification

Certificate of Completion and individual assessment report provided.

Economics of Petroleum Production
Costs, Forecasting & Profitability

Duration: 5 Days
Target Audience: Reservoir Engineers, Production Engineers, Asset Managers, Planners, Financial Analysts, Petroleum Economists
Delivery Mode: Classroom / Virtual with Practical Calculations, Economic Modeling, and Case Studies
Level: Intermediate to Advanced

Course Overview

This course equips participants with the knowledge and tools to perform economic evaluations of petroleum production projects. Topics include production forecasting, cost estimation, cash flow modeling, economic indicators, risk analysis, and portfolio optimization, all illustrated with practical examples from oil and gas field developments.

Day-by-Day Outline

Day 1 – Fundamentals of Petroleum Economics

- Introduction to petroleum economic concepts and terminology
- Types of costs: CAPEX, OPEX, abandonment, and sunk costs
- Oil & gas price forecasting and volatility considerations
- Basic cash flow components and time value of money
- Exercise: Build a simple cash flow model for a single well

Day 2 – Production Forecasting & Revenue Estimation

- Production profiles for oil and gas wells
- Decline curve analysis methods
- Revenue estimation under different pricing scenarios
- Fiscal regimes and revenue sharing mechanisms
- Workshop: Forecast production and revenues for a hypothetical field

Day 3 – Cash Flow Modeling & Economic Indicators

- Building project cash flow statements
- Net Present Value (NPV), Internal Rate of Return (IRR), Payback Period
- Profitability Index (PI) and investment efficiency metrics
- Sensitivity analysis of key economic drivers
- Exercise: Calculate NPV and IRR for field redevelopment options

Day 4 – Risk Analysis & Portfolio Economics

- Incorporating risk and uncertainty into economic models
- Monte Carlo simulations and probability distributions
- Real options valuation in petroleum projects
- Portfolio management concepts and capital allocation
- Workshop: Perform risked economic evaluation of multiple prospects

Day 5 – Economic Decision-Making & Case Studies

- Economic decision trees and project ranking
- Break-even analysis and marginal economics
- Lessons learned from global oil & gas investment successes and failures
- Integrating technical and economic uncertainties in decision-making
- Capstone Project: Evaluate and compare competing development projects

Expected Learning Outcomes

Build and interpret cash flow models for petroleum production projects
Apply economic indicators to assess project viability
Perform sensitivity and risk analyses to support investment decisions
Evaluate multiple prospects to optimize portfolios
Communicate economic results effectively to stakeholders

Training Methods

- Classroom instruction and interactive discussions
- Case studies and exercises with real-world data
- Excel-based economic models and production forecasts
- Software demonstrations (Petrel, Pipesim, MBAL, PEEP overview)

Customization for Regional Needs

- Examples from regional onshore/offshore fields
- Arabic-English delivery option available
- Integration with national regulatory frameworks