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Presentation 1

  1. 1. Petroleum Project Economics Econ210D Presentation 1 Economics in the Petroleum Industry Week 1
  2. 2. Economics in the Petroleum Industry Week 1
  3. 3. Crude Oil and Natural Gas Production Economics in the Petroleum Industry Week 1 Five Year Average Natural Gas Production & Sales Volumes Schedule (MMscf/d) Year 2005 2006 2007 2008 2009 Production 3,136 3,789 3,992 4,059 4,102 Sales 2,970 3,515 3,729 3,673 3,706 Crude Oil Production and Prices: Five Year Average (BBL/day)   Year 2005 2006 2007 2008 2009 Oil Production 138,814 147,693 123,263 115,475 100,068
  4. 4. Organizational Structure President/CEO Reservoir Engineering HR Facilities Engineering Drilling Engineering Production Operations Economics IT Economics in the Petroleum Industry Week 1
  5. 5. Who owns an oil company? <ul><li>Shareholders jointly own an oil company </li></ul><ul><li>Oil companies raise finance from the sale of shares </li></ul><ul><li>A person who own shares is a shareholder </li></ul><ul><li>Each shareholder is entitled to a share of the company’s profit which is called the dividend </li></ul>Economics in the Petroleum Industry Week 1
  6. 6. <ul><li>Find more reserves </li></ul><ul><li>Obtain optimum production rates </li></ul><ul><li>Achieve cost efficiency </li></ul><ul><li>Practice safety </li></ul><ul><li>Maximize profit or return on investment </li></ul>Objectives of Oil and Gas Companies Economics in the Petroleum Industry Week 1
  7. 7. <ul><li>Profitability forecasts </li></ul><ul><li>Decision making – recommending projects and obtaining approval. </li></ul><ul><li>Reporting to shareholders </li></ul><ul><li>Reporting to host country government </li></ul>Why Economic Evaluation of Petroleum Projects is Important ? Economics in the Petroleum Industry Week 1

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