Supported By
SOGCE NETWORKING GOLF
29 JUNE 2024
Sutera Harbour Golf & Country Club,
Kota Kinabalu, Sabah Malaysia
"Accelerating & Humanising Energy Transition and Digital Transformation in the Oil, Gas & Energy Industry"
SOGCE Talent Development Programme
Introduction
Sabah has been a key state for the development of Oil, Gas and Energy sector which has contributed significantly to nation building. With nation's 'Right Asset, Right Player' strategy, the state hosts multiple key exploration & development blocks managed by prominent operating companies supported by local supply chain.
With the aspiration to empower local talents and organisations to actively participate and support local sector, prelude to SOGCE 2024, Midas Events Management, the organiser of SOGCE in partnership with Semarak Training, the pioneer of Malaysia’s integrated professional training provider is proud to organise our next SOGCE's Talent Development Programme with the focus on Petroleum Economics.
Economics drives the entire oil & gas producing industry. Almost every decision is made on the basis of an economic evaluation. Oil & gas operating company develops petroleum economics to justify risk and return of investment of its projects.
Therefore, it is important for professionals who are involved in Field Development Planning and Portfolio Planning to understand the fundamentals of petroleum economics for investment decision, how projects are selected and how development concepts are selected. While each country has its unique economic policies, Malaysia has been applying Production Sharing Contracts as the guidelines for operating companies and to manage the resources responsibly.
This masterclass has been developed to help professionals on the subject and offers 2 levels of courses:
1. Fundamentals of Petroleum Economics (2 Days): 11 – 12 December 2023
2. Advanced Petroleum Economics (3 Days): 13 – 15 December 2023
Learning stage and need of each professional might be different, thus this programme is designed to give flexibility where delegate is able to choose to attend either single course or complete masterclass (2-in-1).
Learning Outcomes
By the end of the course, delegate will be able to:
• Understand how every major NOCs and IOCs evaluate projects, decide which development option is
chosen for FDP, valuation of assets and how risk are mitigated.
• Comprehend economic indicators used and how they are presented to top management for decision
making.
• Recognise how current Malaysia’s R/C and sliding scale (Deepwater) PSCs work.
• Understand the value drivers in the PSC and the key to maximising the contractor’s value from the PSC.
• Appreciate the fundamental of Portfolio and Portfolio Optimization.
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Fundamentals of Petroleum Economics (2 Days)
Course Outline: Day 1
• Why petroleum economics
• Cash Flow – underlying principle to petroleum
economics evaluation
• Cash Flow in different type of petroleum contracts
• Concession
• Production Sharing Contract (PSC)
• World Wide Fiscal system
• Malaysian PSC and its evolution
o PSC Flow Mechanism
o Cost Recovery
o Profit Sharing
ü Sliding Scale
ü Production Based
ü Threshold volume Based
o Profitability Based (Revenue over Cost (R/C)
o Net Cash Flow (Tax on profit Only
Fundamentals of Petroleum Economics (2 Days)
Course Outline: Day 2
• Tax
o Taxation concept
o Capital Allowance
o Net Cash Flow ( Tax based on Entitlement –
Cost Recovery + Profit)
o Optimizing tax OPEX vs CAPEX
• Comparison of NCF based on different taxation
basis
• Cost Escalation
o Real Term (RT) vs Money Of the Day (MOD)
• Time Value of Money
• Profitability Indicators
• Risk Analysis/Mitigation
o Sensitivity Analysis
o Exploration Economics
Fundamentals of Petroleum Economics (2 Days)
Overview
This course uncovers the fundamentals of petroleum economics for investment decision, how projects are selected and how development concepts are selected.
Objective
This course is designed for professionals involved in E&P business to understand how economics is used to support and influence management investment decision. In addition, it helps professionals to understand both sides, national Oil Company (NOC) & on the opposite side, International Oil Company (IOC), aspirations and limitations and how it affects the working relationship between both parties.
Learning Outcomes
By the end of course, participants will be able to understand how every major NOCs and IOCs evaluate
projects, decide which development option is chosen for FDP, valuation of assets and how risk are mitigated.
Economic indicators used and how they are presented to top management for decision making.
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Advanced Petroleum Economics (3 Days)
Overview
This course discusses intermediate to advanced petroleum economics with real life practical examples with
focus on Malaysia current Production Sharing Contracts.
Objective
This course is the continuation of Fundamentals of Petroleum Economics concentrating on Incremental Analyses which is how projects evaluation are actually done day to day by both NOC and IOC. It also aims to help delegates to understand basis of Portfolio Analyses and Optimization. Spreadsheet model will be provided and will be used to perform portfolio optimisation exercises in this course.
Learning Outcomes
By the end of course, participants will be able to:
• Recognise how current Malaysia’s R/C and sliding scale (Deepwater) PSCs work.
• Understand the value drivers in the PSC and the key to maximising the contractor’s value from the PSC.
• Appreciate the fundamental of Portfolio and Portfolio Optimization.
• Understand why some things that are intuitive might not be correct in petroleum economics evaluation.
• Grasp the impact of high oil price vs lower price in oil prices used in economic evaluation.
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Advanced Petroleum Economics (3 Days)
Course Outlines: Day 1
• Stand Alone versus Incremental project analyses.
• Project Basis vs Consolidated Contract Area Basis (as per PSC)
• Why Stand alone economics is not accurate and Incremental Analyses is the only accurate analyses.
o Incremental Sliding Scale PSC analysis
o R/C PSC Incremental analysis.
Who Should Attend
Front-end engineers, geologist, reservoir
engineer, managers, planners, lawyers, and
those involved in Field Development Planning
project teams and Portfolio Planning.
Advanced Petroleum Economics (3 Days)
Course Outlines: Day 2
• Buy vs Lease for R/C PSC
• Explaining some unexpected results due to incremental effect.
o Incremental “Reserves” higher than project reserves
o Result at higher price worse off than lower price
o Entitlement number goes down even though higher price is used in valuation.
Course Methodology
• Workshop style
• Lectures with exercises using spreadsheet
• Group activities
• Case studies
• Q&A
Advanced Petroleum Economics (3 Days)
Course Outlines: Day 3
• Portfolio Analyses
o Optimizing Portfolio
o Efficient Frontier
o Difficulties/Limitations in doing Portfolio Analyses
• Course wrap up
About Expert Trainer: Rozmee Ismail
Mr Rozmee is a Petroleum Techno Commercial Professional with 28 years of experience in the upstream Oil & Gas industry. He has worked in both National Oil Company (NOC) and International Oil Company (IOC). The
experience has given him a balanced view of the aspirations of both sides and he believes both sides needs to understand this to ensure a successful relationship in the implementation of a petroleum contract.
He strongly believes that petroleum economics is the cornerstone of a petroleum contract spelled out through the commercial provisions spelled out in the PSC. As such he believes executives involved with upstream O&G should understand the commercial aspect of the PSC that their company are involved in.
He is proven trainer having conducted petroleum economics related courses over the last 20 years with good feedback from participants. Post retirement, he has conducted courses for several NOCs; Myanmar Oil & Gas Enterprise (MOGE), Senegal PETROSEN and Gabon Ministry of Hydrocarbon and Mines.
His background as front end engineer gives him a unique perspective of optimizing the economics of a project by through phasing of development to maximize the value of a projects.
He is also involved with the industry by being guest lecturer at Universiti Teknologi Petronas (UTP) and Universiti Teknologi MARA (UITM). In addition, he’s also industry external examiner for UTP’s Master in Petroleum Engineering programme.
Grab discounts while it lasts:
Course Individual Early Bird Team
Fund. MYR 5,800 MYR 5,600 MYR 5,300
Adv. MYR 8,700 MYR 8,500 MYR 8,200
Both MYR 14,000 MYR 13,500 MYR 13,000
Register By 24 Nov By 8 Nov Min. 3 pax
Let’s hear what past participants had to say:
“He is a trainer who is very knowledgeable and highly experienced in Malaysia & South-East Asia markets. He is also
very open to debate & opposing views.” Senior Planning Analyst, SapuraOMV Upstream (Sarawak) Inc.
“I benefited the most from the real-life experience sharing by the trainer. The course is practical to my current role.”
Staff Engineer (FDP), PTTEP Sarawak Oil Limited
“The instructor shared a real-life experience which is very useful & relatable.”
Business Planning Lead, SEA Hibiscus Sdn Bhd