petroleum project economics 06

7/24/2019 Petroleum Project Economics 06

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Petroleum Project

EconomicsEcon210D

Presentation 6

Sensitivity Analysis for ChangingVariables

ee! 6 1


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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

2Sensitivity Analysis for hanging!ariables "eek #


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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%

(Sensitivity Analysis for hanging!ariables "eek #


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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

!ariables "eek #


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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%

+Sensitivity Analysis for hanging!ariables "eek #


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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

!ariables "eek #


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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$

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%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

!ariables "eek #


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1/Sensitivity Analysis for hanging!ariables "eek #


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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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1(Sensitivity Analysis for hanging!ariables "eek #


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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 +'+

petroleum project economics 06

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