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Uncertainty and Risk Assessment (PBM33)

    Description

    This course introduces probabilistic and deterministic approaches, their benefits and shortcomings, as applied to project approval, appraisal, reservoir surveillance and production forecasting. Included is the examination of the factors contributing to project uncertainty; subsurface, drilling, facilities, production, scheduling, cost and economics.
    The aim is to deepen the understanding of the complex and varying risks involved in delivering accurate estimates of production, reserves and value to key internal and external stakeholders and hence enhance decision making capability.
    The course is orientated to building an understanding of the economic evaluation of oil and gas assets; the fundamentals of economic evaluation will be covered, including time value of money, discounting and NPV, project cash flow analysis and taxation.

    Course Duration: 5 days

    Course Level: Skill
    Instructor: Pete Smith

    Designed for you, if you are...

    • A reservoir, petroleum, or drilling engineer or geoscientist working in multi-discipline teams with at least 5 years’ experience of the oil & gas industry
    • A team leader or manager

    How we build your confidence

    This is a five-day classroom-based course with worked examples, case studies, individual and group exercises and discussions.

    The benefits from attending

    Participants will learn to:

    • Evaluate uncertainties for projects at different stages of the E&P lifecycle
    • Formulate problems probabilistically and systematically assess risks & uncertainties
    • Develop decision trees to lay-out the logic of the decision, evaluate the robustness of the decision and competently use the provided software
    • Select the key variables in a probabilistic evaluation and manage certainty by acquiring additional data (appraisal) or design of interventions (contingency)
    • Assess the volumetric derivation of resources, both deterministically and probabilistically
    • Validate data using statistical distributions and combine them using both parametric and Monte-Carlo methods
    • Evaluate the impact of correlations between variables whilst undertaking uncertainty assessments
    • Manage the process of acquiring additional data by isolating the most important variables and assessing its value

    Topics

    • Introduction
    • Risk and uncertainty fundamentals, definitions
    • Value - measuring project value
    • Making decisions
    • Statistics and distributions
    • Estimating probabilities and ranges - Improving estimates by calibration
    • Bayesian revision - value of additional data
    • Combining distributions - Monte-Carlo Method - impact of portfolio choices
    • Finding a deterministic value that best represents a distribution
    • Heuristics of probability estimation - ground rules for estimation
    • Correlations and dependent variables - how best to incorporate them
    • Importance - the variables to focus upon
    • The concept of value
    • Basic process of economic evaluation, inflation, time value of money, nominal & effective interest rates, discounted cash flow, net present value (NPV), internal rate of return (IRR), profitability index (PI), cumulative net cash-flow
    • Value of information - value of study, cost of delay, opportunity cost
    • The value of intervention, planning and flexibility
    • Risk and uncertainty in resource estimation
    • Volumetric uncertainty
    • Value of information evaluation
    • Production forecasting
    • Cost uncertainty
    • Schedule uncertainty and critical path commercial considerations
    • Case studies
    • Resource assessment - categorisation and classification of petroleum resources
    • What is the SEC and PRMS schemes?


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