SPE logo

Petroleum Economics: Optimising Value throughout the Asset Life Cycle 

17 – 19 March 2014

Dubai, UAE | The Address Dubai Marina

Technical Agenda

Monday, 17 March

Opening Keynote Address

  • Peter Grieve, Shell VP Economics
  • Distinguished Guest Speaker: Adif Zulkifli, Head Strategy and New Venture, Exploration and Production, Petronas 

Session 1: Macroeconomics and Global Geopolitical Outlook

Session Chairs: Kenneth Henriks, Maersk Oil; Omair Hameed, Schlumberger; Aidah Al-Zahrani, Saudi Aramco

The unpredictability in the oil and gas sector directly influences the global economy. Variations in the market supply and demand of oil and gas are very important to predict efficiently and also to analyse its impact on the international market drivers. The past few years have seen various factors such as the oil price volatility, cost explosion, the role of shale gas, deep water exploration, scarcity of human resources, service contracts, etc. that have resulted in greater challenges to estimate and forecast the drivers linked to the oil and gas sector. The role of technology and a stronger integration between the upstream and downstream sector has offered new avenues for companies to optimise value and reduce uncertainty.

In this session, industry leaders from the different stakeholders (IOC’s, NOC’s, Service Companies, Financial Institutions etc.) will present on wide ranging topics related to the global energy sector market trends, geopolitical drivers, and encourage debate on challenges facing the oil and gas industry.

Session 2: Value Drivers and Associated Risks

Session Chairs: Andres Flores, OXY; Kirk Hanes, Palantir Solutions; Wil Mos, Shell

Declining global economic conditions and conflicting demands from stakeholders for increasing returns but with reduced risk and exposure and greater transparency, create a turbulent macro environment for oil and gas companies. The traditional model of large scale investment into major capital projects can no longer guarantee success; instead, organisations must focus on capital management throughout a project’s life cycle. Significant effort, time, and resources are invested in project delivery. However, poor decisions during the planning phases may result in loss of value during execution. Companies which take a holistic approach to capital management across the project life cycle to manage costs, resources, and schedules carefully will benefit from increased collaboration leading to integrated and dynamic decision making balancing risk and reward.

This session will focus on:

  • Identification of the key value drivers in the oil and gas industry today
  • Discussion of the key risks facing the industry
  • How to balance risk and value to ensure success

Tuesday, 18 March

Session 3: Asset Life Cycle Monetisation

Session Chairs: Ramin Lakani, Halliburton; Sohan Harkeshvinderjit Singh, Schelumberger; Sarika Varma, Heriot-Watt University

Traditionally, economic analysis was done to help business managers make decisions to invest or divest; i.e. at the start or the end of a project. A more effective way to manage capital projects in the oil and gas industry is to take the holistic approach of a stage-gate model for evaluating progress and enabling informed decisions about next steps in the asset life cycle. Given the increasing risks and uncertainties seen in most projects, it is pertinent to re-evaluate decisions at each stage of a project; at the very least, to validate the original assumptions and to ensure that the correct decisions are continually made. This session will present case studies and share best practices in evaluating and maintaining asset value throughout its life cycle, whilst avoiding the risk of making myopic, short term decisions. Furthermore, evaluation of integrated assets across upstream, midstream, and downstream parts of the oil and gas industry will be analysed.

Wednesday, 19 March

Session 4: Unconventional Resource Economics

Session Chairs: Dhiya Said, Petroleum Development Oman; Rabih El Chaar, OXY; Hayder Obead Al Moallem, ADCO

The unconventional oil and natural gas sectors are changing the global energy landscape. While North American markets are blazing the trail, other areas (including the Middle East) have started to realise the potential of their unconventional resources and are yet to fully capitalise on them.

The differences between conventional and unconventional resources relate to reservoir characteristics and producing mechanisms have created technical, developmental, environmental, and economical challenges. These challenges have consequences that affect the assessment of potential resources and reserves and call for greater flexibility in the commercial decision making process.

The session will aim to highlight:

  • Differences in economic analysis of unconventional (tight oil, tight gas, shale gas, shale oil, etc.) prospects versus other conventional and unconventional plays
  • Costs/returns in various parts of the world
  • Estimation of reserves and ultimate recovery as a function of physical properties and available economic analysis tools and models including decision mapping and decision trees.

Session 5: Integrated Economics

Session Chairs: Abdul Jalil Zainol, PETRONAS; Sirak Kifle, Baker Hughes

Oil and gas investment decisions are based on a thorough analysis of variables and uncertainties throughout the total value chain of the activities. Integrated economics is another critical valuation approach for companies and host government participating in investment and decision making across the value chain activities namely upstream, midstream, downstream, transportation and services.

This session will share and deliberate a practical introduction to the techniques used within the petroleum industry to value integrated projects, assets, and companies involved across the value chain. It will also addresses the key drivers and value contributors to derive the optimum integrated economic valuation such as fiscal systems, risk, transfer price, and provide participants with the knowledge to answer questions such as "how does integrated economics work?" and "what is the benefit of having integrated valuation?"