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Early development

Petroleum Risk and Portfolio Management

The objective of the Petroleum Risk and Portfolio Management course is to provide practical advice and tools that can be used to identify, express, analyse and manage both technical and non-technical E&P risk and uncertainties.

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Designed for:

The course is designed for staff working in geoscience, engineering, finance, or commercial departments of oil and gas companies, or companies which supply finance or services to the oil and gas industry.

Duration

3 days

Learning Level

Skills

Knowledge

Awareness

Learning is reinforced by working on case studies to explore risk quantification and mitigation, risked production and cash-flow management, risk management through asset portfolio manipulation and the risking of incremental projects.

Monte Carlo modelling and Decision Tree analysis software will be employed throughout the course.

A number of company reports and portfolios will be used to develop practical skills.

Course Content

Introduction

Brief review of economic and financial indicators (with an emphasis on risk management)

Defining uncertainty and risk

Identifying uncertainties in E&P businesses

Expressing uncertainty and accounting for data limitations

Combining uncertainties

Dependant and independent variables
Methods: Monte Carlo, Parametric and
Three point distributions

Tools for quantifying risk

Sensitivity analysis
Decision three analysis
Simulation (Monte Carlo)

Technical uncertainties and their management

Exploration – volume, portfolio and timing
Appraisal and feasibility studies – value
of information and value of flexibility
Development planning – uncertainty reduction vs mitigation
Production forecasting – deterministic
vs probabilistic methods

Non technical uncertainties and their management

Market factors – price, cost, exchange rate, inflation
Human factors – political, fiscal, competitor, partner
Portfolio Management
Portfolio theory overview
Utility theory – influence on corporate behaviour
Asset selection – ‘right sized’ and core vs non-core
The portfolio ‘efficient frontier’ with respect to risk and value – is it valid for E&P?
Impact of diversification on total portfolio risk
Company behaviour as a function of portfolio size and spread – P90 vs P50 companies.

Course Duration

Duration is 3 days.

Course Tutors

Mark Cook

BSc, MBA
40+ years - reservoir engineering, economics and risk analysis

Mark develops and runs courses in Early Development, Business & Risk and Reservoir Engineering series. He has a career background at Shell, TRACS (Director), and AGR (VP). Mark is Author of ‘Petroleum Economics and Risk Analysis’ and co-author of ‘Hydrocarbon Exploration and Production’, an SPE distinguished lecturer, and guest lecturer at Heriot-Watt University.

Jerry Hadwin

BSc, MEng
35+ years - reservoir engineering

Jerry mainly tutors courses in the Reservoir, Early Development, and Open Air Series. He has a career background at Shell, TRACS and AGR. Jerry is co-author of ‘Adventure Trekking in Oman’.