Expanded Basic Petroleum Economics - BEC

Discipline: Petroleum Business
Level: Basic
Instructors who teach this course:
  • Mr. Tim Nieman
  • Dr. Kent Saugier
  • Dr. Richard D. Seba
  • Mr. Ronnie Tucker


  • About the course
  • Designed For
  • You will learn
  • Course Content
About the course
Could you answer the following three questions for your next project? What will it cost? What is it worth? Will it earn sufficient profit? Before undertaking any project, these questions should be answered. This course will provide the fundamentals necessary to enable you to do so. Budgeting and financing, accounting, and contractual arrangements, which also significantly impact the economic viability of a project, are covered. Participants practice cash flow techniques for economic evaluations and investigate frequently encountered situations. Participants are invited to submit their own economic problems (in advance), if appropriate. Each participant will receive Economics of Worldwide Petroleum Production, written specifically for PetroSkills courses.


"The instructor did a good job of describing situations in an interesting manner, it kept me wanting to come back each day. Material covered was consistent with expectations. I last took an economics course 15+ years ago in college and this was a good refresher." - Team Lead - Completions, United States


"The course was well-rounded and highly relevant to the actual running of a business. The course material was up to date and we benefitted greatly from [Instructor's] rich experience." - Participant, United Kingdom


Designed For
Managers, engineers, explorationists, field accounting supervisors and other personnel who need to develop or improve their skill and understanding of basic economic analysis and profitability of petroleum exploration and production. Due to similarity in content, PetroSkills recommends that participants take this course if they have no previous experience in this subject. For participants with more exposure to the subject, please review the Economics of Worldwide Petroleum Production description as its course content is more advanced than either Basic Petroleum Economics or Expanded Basic Petroleum Economics. Take one or the other, but not both courses.
You will learn
  • How to evaluate the economic viability of a project
  • Cash flow techniques applicable in economic evaluations
  • Models to weigh risk and uncertainty
  • Techniques to determine expected value
  • The effect finance, budgeting, and contractual agreements have on a project
  • The basic principles of accounting
Course Content
  • Forecasting oil production
  • Defining: reserves, operating expenses, capital expenditures, inflation, factors effecting oil and gas prices
  • Cash flow techniques
  • Economic criteria: interest, hurdle rate, time value of money, selection, ranking criteria
  • Risk, uncertainty: types of risk, mathematical techniques, probabilistic models, uncertainty in economic analysis
  • Financing, ownership in the oil and gas industry: business arrangements between operators, between mineral owners
  • Accounting versus cash flow: accounting principles and definitions, differences between accounting cash numbers, depreciation, depletion, amortization
  • Budgeting: types, processes, selecting of projects for the budget
  • Economic analysis of operations
  • Computer economics software
  • Tips on economic factors in computer spreadsheet analysis
  • Ethics in economic analyses