Economic Evaluations and Project Economics: 5-Day Professional Training Course

Course Overview

This comprehensive 5-day training program provides essential knowledge of economic evaluation methods and project economics for oil and gas investments. Designed for professionals in the Kingdom of Saudi Arabia (KSA), Oman, GCC countries, and Africa, this course covers financial analysis, risk assessment, fiscal systems, portfolio optimization, and decision-making frameworks crucial for maximizing asset value in upstream operations.

Target Audience

• Petroleum engineers and reservoir engineers

• Economic analysts and financial planners

• Asset managers and portfolio strategists

• Business development professionals

• Investment analysts in energy sector

• Project managers and development planners

• Technical professionals from Saudi Aramco, PDO, ADNOC, and African operators

• Government officials in petroleum ministries

• Consultants and advisors

Day 1: Fundamentals of Petroleum Economics

Morning Session: Economic Principles

Module 1.1: Introduction to Petroleum Economics

• Time value of money concepts

• Cash flow fundamentals

• Discount rate and present value

• Investment decision criteria

• Risk and return relationships

• Upstream investment characteristics

• Capital intensity in oil and gas projects

• Regional investment climate: KSA, Oman, GCC, Africa

Module 1.2: Economic Indicators

• Net Present Value (NPV) calculation and interpretation

• Internal Rate of Return (IRR) and Modified IRR

• Profitability Index (PI) and benefit-cost ratio

• Payback period and discounted payback

• Return on Investment (ROI) metrics

• Breakeven analysis and sensitivities

• Unit technical cost (UTC) benchmarking

• Comparing economic indicators

Afternoon Session: Cost Estimation

Module 1.3: Capital Expenditure (CAPEX)

• Exploration and appraisal costs

• Development drilling expenditures

• Facilities and infrastructure investments

• Subsea systems and offshore platforms

• Pipeline and transportation infrastructure

• Cost estimation methods: factored, definitive, detailed

• Contingency and escalation allowances

• CAPEX benchmarking in Middle East and Africa

Module 1.4: Operating Expenditure (OPEX)

• Fixed vs. variable operating costs

• Production costs per barrel

• Artificial lift operating costs

• Water handling and disposal costs

• Maintenance and workover expenses

• Personnel and administrative costs

• Utilities and energy consumption

• OPEX optimization strategies

• Regional cost comparisons

Day 2: Fiscal Systems and Government Take

Morning Session: Petroleum Fiscal Regimes

Module 2.1: Fiscal System Types

• Royalty and tax systems (R/T)

• Production Sharing Contracts (PSCs)

• Service contracts and fee structures

• Hybrid fiscal arrangements

• Concession agreements

• Risk service agreements

• Carried interest provisions

• Regional fiscal regime comparison

Module 2.2: Fiscal Terms Analysis

• Royalty rates and structures

• Corporate income tax and petroleum tax

• Signature and production bonuses

• Cost recovery mechanisms and limits

• Profit oil/gas sharing formulas

• Depreciation and amortization rules

• Ring-fencing and consolidation

• Domestic market obligations (DMO)

Afternoon Session: Government Take and Competitiveness

Module 2.3: Government Take Calculation

• Government take definition and components

• Contractor take and effective royalty rate

• Fiscal modeling spreadsheets

• Progressive vs. regressive fiscal terms

• Impact of oil price on government take

• Fiscal stability and contract sanctity

• KSA, Oman, UAE fiscal frameworks

• African fiscal regimes: Nigeria, Angola, Egypt, Ghana

Module 2.4: Fiscal System Optimization

• Balancing government and contractor interests

• Fiscal incentives for marginal fields

• Deepwater and frontier exploration incentives

• Enhanced oil recovery (EOR) fiscal benefits

• Local content cost implications

• Gas development fiscal considerations

• Renegotiation triggers and processes

• Investment attractiveness ranking

Day 3: Risk Analysis and Decision Making

Morning Session: Risk and Uncertainty

Module 3.1: Risk Assessment Fundamentals

• Types of risk: geological, technical, commercial, political

• Probability and impact assessment

• Expected Monetary Value (EMV)

• Risk-adjusted NPV calculations

• Probabilistic vs. deterministic approaches

• Monte Carlo simulation principles

• Tornado diagrams and sensitivity analysis

• Spider plots for multi-variable analysis

Module 3.2: Reserves and Resource Classification

• SPE-PRMS reserves definitions: 1P, 2P, 3P

• Proved, probable, and possible reserves

• Contingent and prospective resources

• Probabilistic reserves estimation: P10, P50, P90

• Economic cutoff and commerciality

• SEC and international reporting standards

• Reserves auditing and certification

• Booking reserves in complex fiscal systems

Afternoon Session: Decision Analysis

Module 3.3: Decision Tree Analysis

• Decision nodes and chance nodes

• Probability weighting techniques

• Value of information (VOI) analysis

• Sequential decision making

• Real options valuation

• Flexibility and option value

• Exploration decision trees

• Field development optimization trees

Module 3.4: Scenario Analysis

• Base, optimistic, and pessimistic scenarios

• Price scenario modeling

• Production profile uncertainties

• Cost variation scenarios

• Fiscal term sensitivities

• Geopolitical risk scenarios

• Climate policy impact analysis

• Integrated scenario planning

Day 4: Project Evaluation and Portfolio Management

Morning Session: Project Evaluation Workflows

Module 4.1: Exploration Economics

• Prospect risking and chance of success

• Geological risk factors assessment

• Expected value of exploration

• Portfolio diversification benefits

• Farm-in and farm-out economics

• Minimum economic field size

• Discovery value assessment

• Exploration budget optimization

Module 4.2: Development Project Economics

• Field development plan (FDP) economics

• Concept selection and screening

• Phased development strategies

• Plateau production optimization

• Facilities sizing economics

• Tie-back vs. standalone facilities

• Marginal field development economics

• African marginal field case studies

Afternoon Session: Portfolio Optimization

Module 4.3: Portfolio Management

• Portfolio theory applied to upstream

• Asset maturity and lifecycle management

• High-grading and prioritization

• Capital allocation frameworks

• Portfolio diversification strategies

• Geographic and resource diversification

• Risk-return optimization

• Portfolio rebalancing strategies

Module 4.4: Mergers, Acquisitions, and Divestments

• Asset valuation methods

• Comparable transaction analysis

• Discounted cash flow valuation

• Due diligence economics

• Synergies and integration costs

• Bid strategy and negotiations

• Divestment timing and strategy

• GCC M&A transaction examples

Day 5: Advanced Topics and Regional Applications

Morning Session: Advanced Economic Concepts

Module 5.1: Enhanced Oil Recovery Economics

• EOR screening economic thresholds

• Incremental recovery valuation

• EOR capital and operating costs

• Polymer, thermal, and gas injection economics

• CO2 supply cost considerations

• EOR project phasing and timing

• Saudi Uthmaniyah CO2 EOR economics

• Oman polymer flooding project economics

Module 5.2: Gas and LNG Project Economics

• Gas project economic characteristics

• LNG value chain economics

• Gas pricing mechanisms: oil-indexed vs. hub-based

• Stranded gas monetization options

• Gas-to-liquids (GTL) economics

• Pipeline vs. LNG economics

• Qatar North Field expansion economics

• African gas-to-power projects

Afternoon Session: Sustainability and Future Trends

Module 5.3: Carbon Economics and Energy Transition

• Carbon pricing and emissions trading

• Cost of carbon capture and storage (CCS)

• CO2-EOR with sequestration economics

• Methane emissions reduction costs

• Flare reduction investment economics

• Green hydrogen production economics

• Renewable energy integration costs

• Saudi circular carbon economy initiatives

Module 5.4: Digital Investment Economics

• Digital transformation ROI calculation

• AI and automation cost-benefit analysis

• Predictive maintenance economic value

• Digital oilfield investment justification

• Cybersecurity investment economics

• Cloud computing cost optimization

• Technology vendor evaluation

• ADNOC digital investment strategy

Case Studies and Workshop

Regional Economic Case Studies:

Saudi Arabia - Mega Project Economics:

• Ghawar field economics and value optimization

• Jafurah unconventional gas project evaluation

• Saudi Aramco offshore development economics

• Vision 2030 downstream integration economics

• Unconventional tight oil breakeven analysis

Oman - Mature Field and EOR:

• Mature field redevelopment economics

• Marmul polymer flooding project valuation

• Khazzan tight gas development economics

• Mukhaizna heavy oil steam flood ROI

• PDO cost optimization strategies

UAE - Offshore and Sour Gas:

• ADNOC offshore concession economics

• Upper Zakum field development optimization

• Sour gas development project economics

• Shah gas project evaluation

• Downstream integration value

Kuwait - Heavy Oil Development:

• Greater Burgan redevelopment economics

• Heavy oil production cost analysis

• Thermal EOR feasibility studies

• Kuwait’s Project Kuwait economics

Africa - Diverse Opportunities:

• Nigeria deepwater project economics

• Angola pre-salt development costs

• Egypt Western Desert marginal fields

• Mozambique LNG project evaluation

• Ghana Jubilee field development

• Senegal/Mauritania emerging plays economics

Interactive Workshop:

• Cash flow modeling exercise

• NPV and IRR calculations hands-on

• Fiscal system comparison analysis

• Risk-weighted portfolio optimization

• Decision tree development

• Sensitivity and scenario analysis

• Economic limit calculations

• Investment ranking exercise

• Group presentations and peer review

Learning Outcomes

Participants will master:

• Financial analysis skills for upstream projects

• Economic indicator calculation and interpretation

• Fiscal system understanding and government take analysis

• Risk assessment and probabilistic evaluation methods

• Decision-making frameworks under uncertainty

• Portfolio optimization and capital allocation strategies

• Valuation techniques for M&A and divestments

• Regional expertise in KSA, Oman, GCC, and African economics

• Software proficiency in economic modeling tools

Regional Economic Focus

Saudi Arabia: Mega-project economics, unconventional development, Vision 2030 integration, Aramco investment strategies

Oman: Mature field economics, EOR project evaluation, cost optimization, Vision 2040 diversification

GCC: Offshore development economics, gas monetization, regional fiscal competitiveness, NOC transformation

Africa: Marginal field development, deepwater project economics, fiscal reform impacts, local content cost implications

Training Methodology

• Technical lectures with practical examples

• Excel-based economic modeling workshops

• Economic software demonstrations

• Real project case study analysis

• Interactive calculation exercises

• Group economic evaluation projects

• Fiscal modeling spreadsheet development

• Decision analysis simulations

Duration: 5 days (40 hours)
Delivery: In-person, virtual, or hybrid
Language: English (Arabic support available)
Software: Excel modeling templates, economic evaluation tools
Certification: Professional economic evaluation certificate

Keywords: petroleum economics training, project economics course KSA, oil and gas financial analysis Oman, upstream investment GCC, economic evaluation Africa, NPV IRR calculation, fiscal systems Middle East, government take analysis, portfolio optimization, Saudi Aramco economics, PDO project evaluation, ADNOC investment, reserves valuation, risk analysis upstream, M&A valuation oil gas