LECTURE

UPSTREAM SECTORS, PROJECT
ECONOMICS & PETROLEUM ACCOUNTING

Overview of the Energy Industry

Oil and gas measurements and units; the value chains; market structures; worldwide oil and gas economics; major players; evolution of the integrated oil and gas business.

Host Government Agreements

Typical host country exploration agreements: summary of the history and key provisions, including bonus payments, royalties, taxes; production sharing; participation arrangements.

Exploration Methods

The exploration process: petroleum geology, exploration geophysics, well logging, developing exploration prospects, preparing and interpreting geological maps; case studies.

Drilling and Well Completions

Planning the well; logistics; drilling functions; drilling procedures; formation evaluation methods; horizontal wells; improvements in drilling.

Field Development and Production Cycle

Onshore and offshore field development and long-term production subsurface design; reservoir fundamentals and reserves estimation: field development; inflow performance; integrated reservoir management; and enhanced recovery. Surface facilities design: design for both onshore and offshore operations; production operations and management; investment analysis and reporting of performance. Case studies.

Gas Processing and Marketing of LPGs

Properties of gas and gas liquids; processing of associated gas; markets for LPGs; economics of natural gas plants.

Crude Oil and Natural Gas Pipeline Systems

Introduction to crude oil and natural gas pipelines; design, construction and operation of pipeline systems; estimating project costs; pipeline contracts and tariffs; new pipeline developments.

Measuring Financial Performance

How companies report to their shareholders; GAAP principles; income statement; balance sheet; cash flow statement; equity statement; taxation and tax codes; preparing corporate financials; the audit; reading a major company annual report; measures of performance and the setting of company goals.

Petroleum Industry Accounting and Taxation

Successful efforts vs. full-cost accounting; corporate taxation; petroleum taxation; accounting for host government and joint venture agreements; supplemental reserves reports included in annual reports.

Energy Project Economics

Economic yardsticks; project cash flow before and after tax; tax expenses and benefits; net cash flow stream and payout; time value of money; opportunity cost and present value of net cash flow; discounted cash flow analysis and internal rate of return; risk assessment and sensitivity analysis; examples of the economic analysis of energy projects.