Upstream Oil and Gas Development Lifecycle Costing Courses - LONDON CORPORATE TRAINING

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LCT staff were helpful and attentive beyond the normal call of duty. The consultants were very good in the delivery of the course – both in terms of content and presentation. They mixed seriousness and humour to keep the course interesting and to help us learn.

Zenith Bank, Ghana

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Upstream Oil and Gas Development Lifecycle Costing

Course Ref: OG.5

Course Subject: Oil and Gas

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Dates for This Course

Who should attend?

  • Upstream oil and gas industry professionals, managers and discipline experts, who need to gain a deeper understanding of upstream lifecycle costing
  • Persons involved in industry oversight, from regulators, government agencies, non-governmental organisations (NGOs), charities, special interest and campaigning groups that need to better understand the cost constraints under which oil companies operate
  • Early career professionals wishing to advance their understanding of upstream oil and gas costing and economics issues

Learning Objectives

  • To prepare participants to collaborate within multidisciplinary teams on field development planning tasks leading to investment decisions
  • To gain a comprehensive overview of the nature and magnitude of exploration, development, production and decommissioning costs
  • To understand how to express lifecycle costings in cash flow and economic models
  • To gain an understanding of the challenges of upstream lifecycle costing, and of dealing with uncertain and incomplete information

Course Content

Upstream Oil & Gas Lifecycle Costing

  • Aspects of the upstream oil and gas exploration, development and production industry.
  • The asset (oil or gas field) lifecycle from acquisition and exploration, through to production and decommissioning
  • Relationship to cost estimation and cost engineering
  • Approaches to costing
  • Bottom-up vs. top-down approaches
  • Analog, benchmarking, parametric and cost metrics approaches
  • Provision for engineering growth, contingency, unallocated provision, operator's reserve
  • Types of cost: exploration; capital (capex), operating (opex) and decommissioning (abex)

Upstream Oil and Gas Lifecycle Cost Components

  • Description of the items (activities, services, wells, facilities) that add to lifecycle costs (so they mean more than just numbers in a spreadsheet)
  • Illustrative costs for all components
  • The parameters ('key-drivers') that most influence the cost of components
  • Cost metrics and rules-of-thumb
  • Building of a cost model

Field Development Planning

  • Introduction of the time element
  • Time value of money, discounted cash flow, basic petroleum economics
  • Cost, production, revenue, cash-flow profiles
  • Building of an economic model

The Wider Context

  • Issues relevant to how costs are prepared, used and influenced
  • Petroleum production licences and contracts
  • Cost 'train wrecks' – when costs go out of control
  • The wisdom (and cost) of front end loading (FEL)
  • Current and future challenges to oil and gas production (and hence to costing)
  • Human aspects (biases, irrationality, vested interest) that can skew costing
  • Dealing with risk, uncertainty and incomplete information
  • Decision making
  • Regional and host-country factors, including productivity and local content issues