Risk & Uncertainty Analysis in Capital Investments
$5500.00
Risk & Uncertainty Analysis in Capital Investments: 5-Day Professional Training Course
Course Overview
This advanced 5-day training program provides comprehensive knowledge of risk assessment and uncertainty management for capital investment decisions in oil and gas. Designed for professionals in the Kingdom of Saudi Arabia (KSA), Oman, GCC countries, and Africa, this course covers probabilistic analysis, decision theory, portfolio optimization, and risk mitigation strategies essential for maximizing value in upstream capital investments.
Target Audience
Investment analysts and portfolio managers
Financial planners and economic evaluators
Asset managers and development planners
Reservoir and petroleum engineers
Business development professionals
Risk management specialists
Senior management and decision-makers
Technical professionals from Saudi Aramco, PDO, ADNOC, and African operators
Government officials evaluating investments
Consultants and financial advisors
Day 1: Fundamentals of Risk and Uncertainty
Morning Session: Introduction to Risk Analysis
Module 1.1: Risk and Uncertainty Concepts
Definitions: risk vs. uncertainty
Sources of uncertainty in upstream investments
Geological, technical, commercial, and political risks
Deterministic vs. probabilistic approaches
Risk attitude: risk-averse, risk-neutral, risk-seeking
Expected value concepts
Utility theory fundamentals
Regional risk profiles: Middle East vs. Africa
Module 1.2: Types of Investment Risks
Technical Risks:
Geological risk: reservoir properties, hydrocarbon presence
Drilling and completion risks
Production performance uncertainty
Facility and infrastructure risks
Commercial Risks:
Oil and gas price volatility
Market access and transportation
Fiscal and regulatory changes
Currency and inflation risks
Political and Operational Risks:
Country and sovereign risk assessment
Regulatory and licensing uncertainties
Environmental and social risks
Force majeure and operational disruptions
Afternoon Session: Probability and Statistics
Module 1.3: Probability Fundamentals
Probability distributions: normal, lognormal, triangular, uniform
Central tendency: mean, median, mode
Dispersion measures: variance, standard deviation, coefficient of variation
Correlation and dependence
Conditional probability
Bayes’ theorem applications
Statistical independence assumptions
Module 1.4: Data Analysis and Estimation
Historical data analysis
Expert elicitation techniques
Three-point estimation: low, most likely, high (P10, P50, P90)
Confidence intervals
Bias recognition and mitigation
Anchoring and adjustment
Range assessment methods
Calibration of expert judgments
Day 2: Probabilistic Analysis Methods
Morning Session: Monte Carlo Simulation
Module 2.1: Monte Carlo Fundamentals
Monte Carlo simulation principles
Random number generation
Sampling methods: random, Latin hypercube
Building probabilistic models
Input distribution selection
Number of iterations determination
Convergence testing
Software tools: @Risk, Crystal Ball, Python
Module 2.2: Reserves and Resources Uncertainty
Probabilistic reserves estimation
P90, P50, P10 reserves definitions
Aggregation methods: arithmetic, probabilistic
SPE-PRMS guidelines for uncertainty
Resource classification uncertainty
Volumetric uncertainty analysis
Recovery factor probability distributions
Oman and Saudi field examples
Afternoon Session: Economic Uncertainty Analysis
Module 2.3: Probabilistic Economic Evaluation
NPV probability distributions
Expected Monetary Value (EMV) calculation
Probabilistic IRR analysis
Breakeven probability assessment
Sensitivity vs. probabilistic analysis
Risk-adjusted discount rates
Downside risk measures: Value at Risk (VaR)
Cumulative probability curves interpretation
Module 2.4: Price and Cost Uncertainty
Oil price forecasting and scenarios
Price volatility modeling
Mean reversion models
Gas price uncertainty in GCC markets
CAPEX and OPEX uncertainty ranges
Schedule and timing uncertainties
Correlation between variables
Multi-variate simulation approaches
Day 3: Decision Analysis and Risk Management
Morning Session: Decision Theory
Module 3.1: Decision Tree Analysis
Decision nodes and chance nodes
Probability weighting and expected values
Sequential decision making
Folding back and solving decision trees
Value of perfect information (VPI)
Value of imperfect information
Exploration decision trees
Field development decision trees
Module 3.2: Real Options Valuation
Options in upstream investments
Flexibility and strategic value
Option types: defer, expand, abandon, switch
Binomial tree models
Black-Scholes applications
Strategic value quantification
Phased development options
Farm-in/farm-out option value
Afternoon Session: Portfolio Risk Analysis
Module 3.3: Portfolio Theory Applications
Portfolio diversification benefits
Efficient frontier construction
Risk-return optimization
Correlation impact on portfolio risk
Geographic diversification strategies
Resource type diversification
Maturity profile balancing
Capital allocation optimization
Module 3.4: Risk Aggregation Methods
Project vs. portfolio risk assessment
Dependency and correlation modeling
Copula methods for complex dependencies
Portfolio NPV distributions
Downside risk at portfolio level
Tail risk analysis
Stress testing portfolios
Saudi Aramco and ADNOC portfolio strategies
Day 4: Sensitivity Analysis and Risk Mitigation
Morning Session: Sensitivity and Scenario Analysis
Module 4.1: Deterministic Sensitivity Analysis
One-way sensitivity analysis
Tornado diagrams construction and interpretation
Spider plots for multi-variable analysis
Two-way sensitivity tables
Key value drivers identification
Breakeven analysis techniques
Switching values determination
Kuwait heavy oil development sensitivities
Module 4.2: Scenario Analysis
Base, optimistic, pessimistic scenarios
Scenario probability weighting
Discrete vs. continuous scenarios
Price scenario modeling
Geopolitical scenario development
Climate policy scenarios
Energy transition impact scenarios
African frontier exploration scenarios
Afternoon Session: Risk Mitigation Strategies
Module 4.3: Technical Risk Mitigation
Appraisal programs and value of information
Pilot projects and phased development
Technology selection and proven methods
Contingency planning
Risk sharing through partnerships
Farm-out strategies
Technical service contracts
Insurance and indemnification
Module 4.4: Commercial Risk Mitigation
Hedging and derivatives
Fixed-price contracts
Take-or-pay agreements
Fiscal stabilization clauses
Political risk insurance
Escrow accounts and guarantees
Force majeure provisions
Currency risk management
Day 5: Advanced Topics and Applications
Morning Session: Advanced Risk Techniques
Module 5.1: Bayesian Methods
Bayesian updating of probabilities
Prior and posterior distributions
Incorporating new information
Conjugate priors
Bayesian decision analysis
Exploration success probability updating
Reservoir performance updating
Production forecasting with Bayesian approaches
Module 5.2: Stochastic Modeling
Time series analysis
Autoregressive models
Stochastic differential equations
Geometric Brownian motion
Mean-reverting processes
Jump-diffusion models
Production decline uncertainty
Long-term price forecasting
Afternoon Session: Integrated Risk Management
Module 5.3: Enterprise Risk Management
ERM framework for upstream companies
Risk identification and assessment
Risk register development
Risk appetite and tolerance
Key Risk Indicators (KRIs)
Risk reporting and governance
Integration with strategic planning
NOC risk management frameworks
Module 5.4: ESG and Emerging Risks
Environmental and Climate Risks:
Carbon price uncertainty
Stranded asset risk assessment
Climate policy scenario analysis
Transition risk quantification
Physical climate risk impacts
Social and Governance Risks:
Community opposition risks
Reputational risk assessment
Governance failure impacts
Corruption and fraud risks
Transparency and reporting obligations
Emerging Technology Risks:
Digital transformation uncertainties
Cybersecurity risk quantification
Technology obsolescence risks
Innovation investment risks
Regional Case Studies and Workshop
Saudi Arabia - Mega Project Risk Analysis:
Ghawar field development uncertainty analysis
Jafurah unconventional gas project risks
Offshore development decision tree analysis
Price sensitivity for tight oil economics
Strategic options in Vision 2030 context
Oman - Mature Field and EOR Risks:
PDO polymer flooding uncertainty analysis
Khazzan tight gas probabilistic reserves
Mukhaizna steam flood risk assessment
Mature field redevelopment decision trees
Portfolio optimization across blocks
UAE - Offshore and Sour Gas:
ADNOC concession investment risks
Sour gas development uncertainty
Shah gas project probabilistic economics
Offshore field expansion real options
Portfolio risk aggregation
Kuwait - Heavy Oil Uncertainties:
Greater Burgan recovery factor uncertainty
Thermal EOR feasibility risk analysis
Heavy oil CAPEX uncertainty ranges
Development phasing decision analysis
Qatar - Gas Projects:
North Field expansion investment risks
LNG price and volume uncertainties
Mega-project execution risks
Market demand scenario analysis
Africa - Frontier and Deepwater:
Nigeria deepwater exploration risks
Angola pre-salt drilling uncertainties
Mozambique LNG project risk assessment
Ghana field development decision trees
Senegal/Mauritania discovery valuation
East Africa political risk quantification
Marginal field economic uncertainty
Interactive Workshop Components
Monte Carlo simulation hands-on exercise
Decision tree building and analysis
Portfolio optimization simulation
Tornado diagram construction
Scenario analysis development
Risk register creation
Value of information calculation
Real options valuation exercise
Group case study presentation
Risk mitigation strategy workshop
Excel and @Risk modeling practice
Learning Outcomes
Participants will master:
Probabilistic methods for reserves and economics
Monte Carlo simulation techniques and software
Decision analysis including decision trees and real options
Portfolio optimization under uncertainty
Sensitivity and scenario analysis methodologies
Risk mitigation strategies and implementation
Bayesian updating and stochastic modeling
Enterprise risk management frameworks
Regional expertise in KSA, Oman, GCC, and African risk profiles
Advanced software proficiency for risk analysis
Regional Risk Focus
Saudi Arabia: Mega-project execution risks, unconventional resource uncertainties, Vision 2030 transition risks
Oman: Mature field economics, EOR technology risks, fiscal sustainability uncertainties
GCC: Political stability, sour gas development risks, downstream integration uncertainties
Africa: Political and regulatory risks, infrastructure challenges, frontier exploration uncertainties, currency volatility
Training Methodology
Technical lectures with practical applications
Software workshops: @Risk, Crystal Ball
Hands-on modeling exercises
Real project case studies
Interactive simulation sessions
Group problem-solving
Decision analysis workshops
Excel-based tools and templates
Duration: 5 days (40 hours)
Delivery: In-person preferred, virtual available
Language: English (Arabic support available)
Software: @Risk or Crystal Ball license provided
Materials: Models, templates, case studies
Certification: Professional risk analysis certificate
Keywords: risk analysis oil and gas, uncertainty management KSA, Monte Carlo simulation upstream, investment risk Oman, portfolio optimization GCC, probabilistic reserves Africa, decision tree analysis, real options petroleum, risk mitigation strategies, Saudi Aramco investment analysis, ADNOC risk management, PDO uncertainty analysis, capital investment decisions, probabilistic economic evaluation, upstream risk assessment
