UNIVERSITY OF PETROLEUM & ENERGY STUDIES

Format No. QSP/7.1/01.F01(A) Issue No. 02 Rev. No 6 Dated: April, 18, 2012

UNIVERSITY OF PETROLEUM & ENERGY STUDIESCollege of Engineering Studies, Dehradun

COURSE PLAN

Program:M.Tech Course:Petroleum ExplorationSemester:IIISession:August - December, 2014Subject:Economics and Risk Management in Exploration

Subject Code:MBCE 706No. of Credits:2

Faculty Member: Dr.Mandira Agarwal

APPROVED BY:

(HOD) (DEAN)

UPES Campus | Energy Acres| P.O. Bidholi via Prem Nagar| Dehradun-248007(UK)Tel: +91-135-2261090/91 | Fax: +91-135-2694204 | URL: www.upes.ac.in

A. LEVEL OF KNOWLEDGE REQUIRED

The students should have knowledge on Basics of Oil & Gas Terminology, basic knowledge of Mathematics, Economics & Accounting. The basic knowledge in Upstream and Downstream is also desirable.. In addition, the student should have knowledge of the latest news of the Oil & Gas and Petroleum industry by reading journals, magazines and news articles on the said subject.

A. PREREQUISITE

Basic knowledge in Geology & Economics and its Application

B. OBJECTIVES OF COURSE

This course will help to understand about the status of oil sector with respect to oil explorationThe overall theme of the course is to emphasize the process of thinking: qualitatively quantitatively, and strategically, using concrete, real-life practical examples as specific exemplars Business news paper reviews, articles pertaining to economics and challenges in the upstream sector of oil & Gas.

The course objectives are to:1. To understand the NELP and PSC structure.2. To gain knowledge in Risk and Uncertainty in upstream sector3. To understand the major elements of OPEX of Facilities and Infrastructure.4. To understand the Economic Indicators for project viability.5. To understand the concept of Decision Analysis for taking better decisions in complex situations, usually under uncertainty in oil and gas sector.

C. COURSE OUTLINE

Module 1: NELP and PSCModule 2: Risks in upstream sectorModule 3: Major Elements of OPEX for Surface Facility & InfrastructureModule 4: Determination of Profitability Indicators for viability of projectModule 5: Determination of Decision Tree for evaluating projects.Module 6: Risk Management in Petroleum Exploration

D. PEDAGOGY

Interactive approach during the study. Students shall be advised in advance to prepare the topics for discussion in the class), Work in small groups and personalized teaching(Student counseling, tutoring, and individual assignments). The students will work in team and deliver presentation on a given topic

E. COURSE COMPLETION PLAN

Lectures : 1 hour per lecture Total hours per week: 2 contact hours per week

F. EVALUATION & GRADING

DescriptionMarksSchedule

1. Internal Examination30%Detailed Below

2. Mid term Exam20%Academic Calendar

3. End term Exam50%Academic Calendar

Internal Assessment: Marks 100 (shall be done based on the following):

i) Assignment: 20% weightageii) Written Test/Quiz: 40% weightage

iii) Student Presentations: 40% weightage

Class Tests : Class Tests containing short theory questions to ascertain that whether the students could understand the concepts or not. (1 hour)

Assignments: Students are supposed to submit Home Assignments on a specified date. Assignments will be designed to encourage the students to go to the library for consultation of books, journals etc. Those who fail to submit the assignments by the due date shall be penalized through deduction of marks. Neat and well written answers must be submitted. Mid- Sem Examination: 20% Mid- Sem examination shall be of two hour duration and shall be a combination of Objective, short & long theory questions.

End -Sem Examination: 50%End-Sem examination shall be of three hours duration. The examination paper shall have objective & short and long theory question and numerical problems.

AttendanceStudents are required to have minimum attendance of 75% in each subject. Students with less than said percentage shall NOT be allowed to appear in the end semester examination.

Cell Phones and other Electronic Communication Devices: Cell phones and other electronic communication devices (such as Blackberries) are not permitted in classes, Tests or the Mid/Final Examination.

E-Mail and LMS: Each student in the class should have an e-mail id and a pass word to access the LMS system regularly. Regularly, important information Date of conducting class tests, guest lectures, syndicate sessions etc. to the class will be transmitted via e-mail/LMS.

G. DETAILED SESSION PLAN

No. ofSessionsTopicReferencesPedagogy

01 - 05

Module 1. NELP and PSC Indian NELP Production Sharing Contract Structure of the NELP PSC Basic Terminology Illustration

Handouts/ppt

1.Presentation2. Q. & A

Assignment # 1

06 - 07

Module 2. Risks in upstream sector

Introduction Categories of Risks Treatment of Risks in Project Appraisal

Handouts/ppt

1.Presentation2. Q. & A

08Student Presentation

09 - 12

Module 3. Major Elements of OPEX for Surface Facility & Infrastructure

Introduction Capital Costs Operating Expense Model Operating Expense Categories Optimizing Production CostsHandouts/ppt 1.Presentation2. Q. & A

13Class Test # 1

MID TERM EXAMINATION

14 - 17

Module 4. Determination of Profitability Indicators for viability of project

Introduction Present Value Concepts Discount Factor Net Present Value The use of net present value in investment decisions Internal Rate of Return Payback period Profitability Index IllustrationHandouts/ppt 1.Presentation2. Q. & A.

18Assignment # 2

Student Presentation

19 - 21

Module 5. Determination of Decision Tree for evaluating projects.

Introduction Construction of Decision Tree Decision Tree Analysis

Handouts/ppt 1.Presentation2. Q. & A.

Class Test # 2

22Student Presentation

23

Module 6. Risk Management in Petroleum Exploration

Introduction Case StudyHandouts/ppt. 1.Presentation2. Q. & A.

24Student Presentation

END TERM EXAMINATION

*One Session = 60 minutes

H. SUGGESTED READINGS

H.1 REFERENCE BOOKS:

1. International Exploration Economics, Risk, and Contract Analysis, Daniel Johnston,2003, Penn Well Corporation, Tulsa, Oklahoma, USA, 401P

2. Risk Analysis and Management of Petroleum Exploration Ventures, Peter R.Rose,, AAPG Methods in Exploration Series, No.12, AAPG, Tulsa, Oklahoma, USA.

3. Decision Analysis for Petroleum Exploration, Newendorp, P.D., Petroleum Publishing Company, Tulsa, Oklahoma, USA.1975

4. An Introduction to Exploration Economics (2nd ed.), The Petroleum Publishing Company, Tuls, Oklahoma, 1977.

5. Economic Analysis and Investment Decision, Chi U,Ikoku, The University of Port Harcourt, John Wiley & Sons, New York, 1976

6. Economic Risk in Hydrocarbon Exploration, Carlye Calvin, Academic Press, California, USA,1999

H2. Students will be informed as the course progresses upon specific topics available on the worldwide web. www. Infraline.com www.iea.org www.worldenergy.org www.api.org www.oilhistory.com www.opec.org www.petroleum.nic.in

H3. JOURNALS / NEWS PAPERS Journal of Petroleum Technology Published by Soc. Of Petroleum Technology, USA The Leading Edge Published by The Soc. Of Exploration Geophysicists E & P Published by Hart Energy Publishing, Texas Oil and Gas Journal Published by Pennwell DEW- the complete energy journal published by Technology Publications, Dehradun Oil Asia Published by Oil Asia Publications Pvt. Ltd., Mumbai Petroleum Update E & P News from India Published by S.L.Johar,Dehradun

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