Risk Analysis

By the end of the course participants will be able to:

Quick links

Designed for:

The course is designed for staff in engineering and commercial functions, who already have an understanding of petroleum economics (discounted cashflow, NPV, EMV) and are involved in the quantification of risk for either exploration or production projects.

Duration

1 to 3 days

Learning Level

Skills
skills 1
Knowledge
skills 1
Awareness
skills 1
  • Distinguish risk from uncertainty
  • Apply a systematic approach to identifying uncertainties
  • Describe uncertainty using probability distributions
  • Combine technical and commercial uncertainties
  • Incorporate technical and commercial uncertainties in decision making
  • Describe methods for reducing risk
  • Evaluate the benefit of risk reduction methods
  • Understand how portfolio theory applies to E& P companies
  • Discuss the human behavioural aspects of uncertainty and risk estimation

Course Content

The course can be tailored for specfic areas, but will cover any or all of the following:

Introduction
  • Defining uncertainty and risk
  • Identifying uncertainties in the E&P business
  • Expressing uncertainty
  • Combining uncertainties
  • Dependent and independent variables
  • The Monte Carlo method
  • The Parametric method
  • Three point distributions
Tools for quantifying risk
  • Sensitivity analysis
  • Decision tree analysis
  • Simulation
Technical uncertainties and their management
  • Exploration
  • Appraisal and feasibility studies
  • Development planning
  • Production
Commercial uncertainties and their management
  • Market factors
  • Human factors
Portfolio Management
  • Overview
  • The budget line
  • Indifference curves
  • Market and taste combined
  • The efficient frontier with respect to risk and value
  • Impact of diversification on total portfolio risk
Course Duration

Duration is 1 – 2 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’.

Mark Bentley

PhD
30+ years - geoscience

Mark develops and runs courses in the Open Air, Reservoir, E&P, Uncertainty & Risk and Energy Transition series for TRACS. He has a career background at Shell, AGR, TRACS and Langdale Geoscience. He has served as a distinguished lecturer for SPE and EAGE, acted as Training Director for TRACS and is an Associate Professor Heriot-Watt University. He is also co-author of the textbook ‘Reservoir Model Design’.

Richard Oxlade

MEng, CEng, BSc
40+ years - reservoir engineering and commercial

Richard runs courses in Reservoir and Business & Risk series. He has a career background at BP, AGR and TRACS. Richard is a global advisor, business planning & economic analysis.

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