Exploration & Development In the Oil & Gas Industry

This course is designed to help students (including but not limited to; oil and gas analysts, energy traders and Energy Risk Professional (GARP) candidates), understand how oil & gas companies explore for hydrocarbons, as well as how oil & gas projects are developed AFTER discovery is made and/or legal access to the deposit(s) is gained.

The course covers the first two readings from "Crude Oil Markets & Refined Products" section from GARP's Energy Risk Professional certification curriculum & is also suitable for anyone trying to understand the basics of oil and gas exploration and development.

The two readings cover the following GARP specific learning objectives:

1. Reading 01: Access, Leasing & Exploration; which discusses the following (GARP specified) Learning Objectives:
   

   • Summarize the process of accessing new reserves & outline the steps involved in developing a petroleum project.

   • Identify key subsurface geological structures that impact oil and gas production;
     e.g., permeability vs porosity.

   • Identify the owner of subsurface mineral and resource rights based on jurisdiction & market assumptions.

   • Compare & contrast the fiscal regimes of international petroleum agreements.

   • Describe the typical components of a lease agreement and methods used to establish royalty payments.

   • Understand reserve valuation & reporting requirements.

   • Compare and contrast the physical and economic factors associated with various reserve classifications (proved, developed, undeveloped, p90, etc.) & understand the differences between conventional and unconventional reserves.

   • Define and calculate reserve replacement & reserve life given a set of market assumptions.

     
     

2. Reading 02: Developing Oil and Gas Projects; which discusses the following  (GARP Specific) Learning Objectives:
   

   • Describe & identify the various steps & associated risk elements that may be considered in taking an upstream project from concept to completion.

   • Explain & apply the concept of unitization in the development of Joint Development Zones.

   • Calculate & interpret relative project economics using following metrics: Net Present Value, Internal Rate of Return, Weighted Average Cost of Capital & Risk-Adjusted Return.

   • Classify pre-completion, post-completion & macro-economics risks & explain their impact on project development decisions.

   • Describe potential risk exposures related to the use of contractors and sub-contractors in petroleum projects.