Mark Twain famously said, “buy land—they’re not making it anymore”. This adage had a similar appeal in the early energy industry. Investors went for “find energy—wherever it is and as much—they’re not making it anymore”. And at least in the early decades of the petroleum industry, the advice worked. Yet, as real estate investors soon found out that not all property has value, energy investors also realised that not all energy projects create value. The energy business is facing new challenges, from harder to find resources to an uncertain market. The energy version of Mark Twain's adage has effectively lost its appeal.
With their technical and market uncertainty, then which projects should we invest in and which ones to reject? We should select those that create value. Here, analytics and valuations have become increasingly significant. We should understand the uncertainty, describe its effects, and make informed decisions. This course discusses the art and science of analysis for value creation. It discusses theory and practice and aims to generate insights about value creation.
This course aims to provide the knowledge and skills to analyse and evaluate investment decisions— to distinguish value-creating from value-destroying ventures. Finding energy resources is an uncertain business. Historically, many ventures failed, yet some successful projects also led to business success and significant value creation. Then, what is a good project opportunity?
The answer is likely multi-dimensional; it is about understanding disciplines from subsurface to economic, comprehensive coverage that eventually reflects our understanding of the value potentials of energy projects.
By the end of this training course, the participants will be able to:
- Understand the principles of finance and economic decision analysis in the energy business
- Gain skills in effective formulation of investment decisions
- Understand the challenges of investment under uncertainty
- Gain skills in using analytical tools, including probabilities and decision trees
- Apply the knowledge and skills to the analysis of value-creating decisions
The training course participants will receive thorough training utilising various proven adult learning teaching and facilitation techniques, including lectures, discussions, and computer applications. The sessions are interactive, and we encourage active engagement in the discussions. At the heart of the informed analysis is clear thinking. This course promotes economic reasoning and logical thinking through the discussion of real-world case studies.