Financial Modelling & Petroleum Project Economics

INTRODUCTION:

Effective financial modelling and project economics provide the foundation for evaluating investment opportunities, managing risks, and optimizing returns. This course offers a deep understanding of how to build robust financial models tailored to the unique requirements of petroleum projects.

Financial modelling plays a critical role in assessing the feasibility of exploration, development, and production projects. Participants will learn how to construct dynamic models that integrate key variables such as oil price forecasts, production volumes, operational costs, and fiscal terms. These models enable stakeholders to assess cash flows, profitability, and overall project viability under various scenarios.

The course also covers the fundamental principles of petroleum project economics, focusing on metrics like net present value (NPV), internal rate of return (IRR), payback period, and sensitivity analysis. Participants will explore how these tools are applied to support investment decisions, budget planning, and portfolio management. By understanding these economic principles, attendees can identify opportunities to improve project performance and reduce financial risks. Additionally, the training addresses the challenges posed by fluctuating oil prices, geopolitical risks, and evolving regulatory frameworks. Participants will gain insights into strategies for managing uncertainty and aligning project economics with organizational goals. 

Leveraging international best practices, this training ensures that participants are equipped with the skills to navigate the complexities of the petroleum sector. Whether preparing investment proposals, negotiating contracts, or evaluating strategic partnerships, attendees will leave with a toolkit for making informed, data-driven decisions.

COURSE OBJECTIVES:

By the end of the course, participants will be able to;

• Explain key economic metrics and their application in project evaluation.

• Develop skills for analyzing project feasibility and profitability under varying market conditions.

• Explore strategies for managing risks and uncertainties in petroleum project economics.

• Acquire practical experience in using financial modelling tools and techniques.

• Highlight international best practices for optimizing investments in the petroleum industry.

COURSE OUTLINE:

Module 1: Fundamentals of Financial Modelling in the Petroleum Industry

• Introduction to financial modelling concepts

• Understanding petroleum project lifecycles and financial implications

• Key components of financial models: inputs, outputs, and assumptions

• Building basic models for cash flow analysis

Module 2: Principles of Petroleum Project Economics

• Overview of economic evaluation techniques

• Key performance indicators: NPV, IRR, payback period, and profitability index

• Sensitivity and scenario analysis to assess project risks

• Applications of economic metrics in decision-making

Module 3: Advanced Financial Modelling Techniques

• Building dynamic models for complex petroleum projects

• Incorporating fiscal regimes, taxation, and royalties into models

• Production forecasting and revenue modelling

• Leveraging Excel and other tools for advanced analysis

Module 4: Managing Risks and Uncertainties

• Identifying and quantifying project risks

• Scenario planning and Monte Carlo simulations

• Evaluating the impact of market volatility and geopolitical factors

• Strategies for risk mitigation in financial models

Module 5: Cost Analysis and Capital Budgeting

• Estimating exploration, development, and operational costs

• Capital expenditure (CapEx) vs. operational expenditure (OpEx)

• Budgeting and forecasting in petroleum projects

• Evaluating trade-offs between cost reduction and project performance

Module 6: International Best Practices and Future Trends

• Aligning financial models with global industry standards

• Adapting to emerging technologies and digital tools

• Incorporating environmental, social, and governance (ESG) factors

• Future trends in petroleum project evaluation and economic analysis

Target Audience:

• Financial analysts and economists in the oil and gas industry.

• Project managers and engineers involved in petroleum project evaluation.

• Corporate strategists and decision-makers in energy companies.

• Investment analysts and portfolio managers specializing in energy projects.

• Accountants and auditors focused on project cost management.

• Professionals involved in contract negotiation and fiscal policy analysis in the oil and gas industry.

Venue:  Kigali

Duration: 1 week

Date: Open