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Design and Implementation of an Advanced Resources Economic and Risk Analysis Course Abstract

Graduate students in an engineering masters or doctoral program tend to naturally concentrate their efforts on the understanding of theoretical issues related to their research area of interest. This will frequently lead to a “cultural” shock when they, after concluding their program, enter or return to the job market. Commonly these professionals will be asked to analyze, develop and/or implement projects based not only on technical premises but also on solid and very well supported economic feasibility studies. Frequently the common graduate academic background does not prepare students for those tasks.

The importance of a thorough understanding of economic issues is even more noticeable in the oil industry, where uncertainties related to oil and gas reserves, prices and government regulations make any long-term project extremely risky.

Based on the abovementioned factors, a graduate course was designed and implemented aiming to prepare the students to deal with the main economic issues and challenges faced by the oil industry. Besides the basics on engineering economics, the course covers advanced material related to budgeting, economic decision tools, scheduling and corporate planning, Monte Carlo simulation and risk analysis for oil industry projects. Economic analysis of operations, production forecasts and its associated costs and expected profits are also studied.

Furthermore, besides the theoretical topics covered, the students are also required to develop a project where actual challenges from the oil industry are analyzed under the perspective of the risks and uncertainties involved. In the project, the associated costs and economic results also have to be determined and scrutinized. All projects are presented in a seminar at the end of the course. In addition, a “Newsletter” analyzing current problems, challenges and industry development is produced weekly by the group during the duration of the course.

This paper gives details about the course experience, methods used for classroom interaction, methodology to choose the project’s topic and participants’ feedback. Examples of projects developed and main topics covered by the “Newsletter” are also presented.

Introduction

Most engineering programs across North America1,2 have in their core curriculum an Engineering Economy course. Petroleum engineering programs generally have in addition a course on Oil & Gas Property Evaluation.

On the graduate level, this structure is not always repeated. Masters and Doctoral programs tend to concentrate on the core petroleum engineering disciplines. In addition to those courses, students may be asked to take courses outside of the department, in advanced mathematics or numerical modeling and also other closely related disciplines such as geostatistics, geology and geomechanics.

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Cunha, J. (2006, June), Design And Implementation Of An Advanced Resources Economic And Risk Analysis Course Paper presented at 2006 Annual Conference & Exposition, Chicago, Illinois. 10.18260/1-2--11