Download - Petroleum Project Economics 06
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Petroleum Project
EconomicsEcon210D
Presentation 6
Sensitivity Analysis for ChangingVariables
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Changing Variables
Economic evaluations are made based on
assumed parameters
These parameters are likely to change
over life of field
Such changes would affect the feasibility
of the project
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Sensitivity Analysis forChanging Variables
$easuring the effect of changes in key
variables on the economic performance of
an investment%
&arameters are varied one at a time with
all other variables held constant%
The effect on '&! is usually measured%
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Petroleum Project Parameters
Parameter Field Estimate
Recoverable Reserves 160 mbo
Field Life 20 years
Oil Price $60Total CAPE $!00m
OPE "er bbl $!
Sensitivity analysis e)amines the effect ofchanges in any one of these parameters on
the economic evaluation of a project%*Sensitivity Analysis for hanging
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"n#e$en#ent an# ControlVariables
The parameters which are changed in the
sensitivity analysis is called the
independent variable%
The other variables in the sensitivity
analysis which are held constant are called
control variables%
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"n#e$en#ent an# ControlVariables
ParameterField
EstimateSensitivityAnalysis
Recoverable
Reserves 160 mbo Co#trolField Life 20 years Co#trolOil Price $60 #de"e#de#t
Total CAPE $!00m Co#trolOPE "er bbl $! Co#trol
,n this sensitivity analysis- oil price is theindependent variable and all other parameters
are control variables%#Sensitivity Analysis for hanging
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S$i#er Plots Sensitivity analysis e)amines "hat if3 situations
based on changes in one parameter at a time%
Spider plots are used to present graphically
several sensitivity analyses
This helps to give a visuali4ation of the
parameters which has the biggest effect on a
projects profitability%
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S$i#er Plots
Change inIndepend
ent
Variable
NPV due to change in IndependentVariables
Price OPEXCAPE
X
eser
ves
Field
!i"e
#a$
%!0& 0'0 %2'( !') !') )'* 1'!
%2!& 1'! 0'0 +'+ +'+ !') 2'2
0& 2'( 2'( 2'( 2'( 2'( 2'(
2!& +'+ !') 1'! 1'! 0'0 ,'6
!0& !') )'* 0'0 0'0 %2'( +'+0Sensitivity Analysis for hanging
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%ther "n#e$en#ent Variables
Altered production profiles
hanges in production start6up date
7nscheduled shut downs
,nflation
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)ome or!
7sing the data in the following slide-
together with the data from presentation *
conduct a sensitivity analysis based on the
changes in the slide which follows%
7se the results to construct a spider plot%
1*
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IndependentVariable
Price OPEX CAPEX
Percentage
Change
%!0& %2'( !')
!0& 0 +'+