Handbook

Students will learn how to carry out net cash flow analyses for petroleum industry investment decisions. The contents will include the definition and composition of cash flow, deriving net cash flow under tax/royalty systems and production sharing contracts, depreciation methods, inflation, sunk costs.

Building on the net cash flow analyses mentioned above, students will study economic indicators (net present value, rate of return and other indicators), what they mean, and the issues associated with their application in practice.

Students will also carry out petroleum fiscal analyses, covering the nature of petroleum fiscal regimes, the effects of fiscal regimes on exploration and field development decision making and economic analyses of fiscal regimes in Australia and Indonesia.

Moreover, the course will cover how risk analysis is conducted in the oil and gas industry. The coverage will include risks in the oil industry, project risk and expected value, sensitivity analysis, probability analysis, Monte Carlo simulation, probabilistic reserves estimates, probabilistic economics, portfolio analysis, asset management, risk and discount rates.