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Petroleum engineering school information.

Oil and Gas Financial Management Course

If you have role as petroleum engineer or management for Oil Company, you must understand about financial management related to the petroleum industry.




Oil and Gas Financial Management course is aimed to understand the fundamental of finance applied to the petroleum industry. It provides an overview of the key issues concerned in energy investment, including sources of funds for energy projects, project finance and risks associated with it, and bank borrowing for oil and gas projects.

The topics in the oil and gas financial management should have several topics as listed below;

Financial Management
• Management of Liquidity
• Management of Capital Structure
• Management of Long Term Investments

Financial Objectives
• Maximization of Profits
• Maximization of Shareholders Wealth
Capital Structures
• Principal Components of a Corporate Balance Sheet
• Definition of Major Capital Structure Components

Organizational Structures - Corporation

• Basic Concept
• Operational Concept
• Management Structure
• Subsidiary Corporation
• Wholly Owned Subsidiary
• Not Wholly Owned Subsidiary
• Incorporating a New Oil Company
• Private Company
• Public Company
• Joint Ventures
• Definition
• Joint Venture Agreement
• Management
• Partnerships

Energy Project Finance
• Advantages and Disadvantages of Project Financing
• Characteristics of a Project Viable for Financing
• Parties Involved in Project Financing
• Components of Project Financing
• Project Finance Cycle
• Types of Project Financing
• Nonrecourse Project Financing
• Project Financing Covered by a Guarantee of Completion
• Project Financing Supported by an Undertaking for the Life of the Financing

Sources of Funds for Energy Projects
• Sources of Equity and Debt
• Instruments used in Raising Debt or capital
• Internal and External Sources
• Trade Credit
• Open Account
• Commercial Banks
• Short Term Loans
• Secured Loans
• Unsecured Loans
• Long Term Debt
• Commercial Paper
• Bonds
• Debentures
• International Lending Agencies
• Lease Financing
• Common Stock
• Preferred Stock
• Partnerships
• Venture Capital

Risks Associated with Oil and Gas Project Financing
• Risks in Project Financing that are Within the Company’s Control
• Operating Risks
• Participant Risk
• Engineering Risk
• Completion Risk
• Risks in Project Financing that are Outside the Company’s Control
• Reserve Risk
• Market Risk
• Infrastructure Risk
• Environmental Risk
• Political Risk
• Foreign Risk
• Risks in Project Financing - Lender’s Perspective
• Reserves
• Infrastructure
• Construction
• Costing Aspects
• Capital Costs
• Operating Costs
• Marketing
• Economic Viability
• Risks Versus Capital Availability
• Role of Independent Consultant in Project Finance

Developments in Oil and Gas Industry Financing
• Creative Financing
• Oil Price-Linked Financing Instruments
• Master limited Partnerships
• Leverage Buyouts

Cost of Capital and Financial Ratios
• Weighted Average Cost of Capital
• Weighted Average Cost of Capital as an Investment Criteria
• Capital Rationing Situation
• Financing Ratios
• Current Assets to Current Liabilities: Current Ratios
• Long Term Debt to Net Worth
• Return on Assets and Return on Equity

Financing of Acquisitions and mergers in the Petroleum Industry
• Reasons for Mergers and Acquisitions
• Economics of Mergers and Acquisitions
• Successful and Unsuccessful Mergers and Acquisitions

Privatization of National Oil Companies
• Motives for Privatization
• Methods of Privatization
• Consequences of Privatization
Bank Borrowing for Energy Projects
• Bank Borrowing Based on Oil and Gas Reserves
• Petroleum Production Loan
• Risk Factors in Oil and Gas Financing
• Structuring a Loan Facility
• Determination of Loan Value
• Cover Ratios
• Future Net Revenue to Debt Service
• Remaining Future Net Revenue to Loan
• Elements of a Loan Information Memorandum
• How to Negotiate a Loan
• Loan Approval Process

Books for Petroleum Economics for oil and gas financial management

Basic of Drilling, Completion and Workover Operations

The Basic of Drilling, Completion and Workover Operations course is exclusively designed to provide a technical overview of the science and art of drilling, completion practices and post-completion borehole improvement or remedial workover techniques (and intervention) to. The aim is to develop an understanding of the what, why and how each of these aspects of technology. Learners will learn to visualize what happens "down hole" what can be achieved and gain a sense of risk and borehole the possibility of damage to formation. How can they adopt the practices of drilling and reservoir evaluation and performance to assist operation. Participants will become familiar in conjunction with specific technical terms and in terms of practical applications, the communication and interaction between the disciplines should.

Learners will learn how drilling, completing and workover a well will affect the ability to produce reservoir fluid. What's more, they will learn about what can be done within open-hole and cased-hole wells in conjunction with reservoir management. Finally , they will learn how drilling practices can damage or stimulate producing wells.

Recommended drilling and workover books: Drilling and Petroleum Operation Books
Drilling and Well Completion Books
Drilling Engineer Books

Petroleum Engineering Optimization

What is about Petroleum Engineering Optimization?

Petroleum Engineering Optimization examines techniques of reservoir optimization and parameter estimation that is useful in petroleum engineering and geosciences. In regard to reservoir optimization, there are several parameters to look at such as matching reservoir models, linear and nonlinear parameter estimation, history matching and the computation of confidence intervals on estimates parameter values.

Specific parameter estimation techniques include Newton type methods (Gauss-Newton, Newton, Levenberg-Marquardt, eigenvalue modification approaches), quasi-Newton (Broyden’s algorithm), singular value decomposition (SVD) and robust (LAV and MLAV) methods.

Methods to optimize goal-oriented projects are also emphasized on this course, for instance environmental impact minimization and cost reduction, production or profit maximization, etc. Optimization techniques includes gradient-based methods such as Newton, variational approaches such as optimal control theory, direct search methods (line search, conjugate gradient and polytope), and exploration methods such as simulated annealing, taboo search and genetic algorithm. What’s more, both constrained and unconstrained methods are also studied.

What are you required for Petroleum Engineering Optimization?

If you are interested in this subject, you are required to pass several courses in regard to mathematics and computer programming for example Linear algebra, computer language C, C++, Matlab or Java.

Suggested Books for Petroleum Engineering Optimization Topic

“The Basics of Practical Optimization”, Adam B. Levy, Society for Industrial and Applied Mathematics
“Numerical Recipes with Source Code CD-ROM 3rd Edition: The Art of Scientific Computing”, William H. Press, Saul A. Teukolsky, William T. Vetterling, Brian P. Flannery, Cambridge Press
“Genetic Algorithms in Search, Optimization, and Machine Learning”, Michael Affenzeller, Stephan Winkler, Stefan Wagner, Andreas Beham,Chapman & Hall Publisher
"Genetic Algorithms in Search, Optimization", and Machine Learning,David E. Goldberg, Addison-Wesley Professional
"Nonlinear Regression (Wiley Series in Probability and Statistics)",George A. F. Seber, C. J. Wild,Wiley-Interscience
"Nonlinear Regression Analysis and Its Applications (Wiley Series in Probability and Statistics)",Douglas M. Bates, Donald G. Watts,Wiley

Thermal Processes in Petroleum Engineering to Enhance Oil Recovery

Enhance Oil Recovery by thermal processes involve exchanging heat into reservoir in order to increase oil production. There are several topics in regard to thermal process to enhance oil recovery. There are several topics in regards to Enhance Oil Recovery by thermal processes as listed below;


Introduction to Thermal Processes in petroleum engineering

· Hot water injection

· Steam injection

· In-situ combustion

Heat transport in concentric systems

* Modes of heat transport
* Heat conduction in concentric systems
* Heat transport in injection and production wells

Steam injection

* Process description of steam injection
* “Screening guidelines”
* Thermal properties of steam and rocks
* Steamflood models

o Marx-Langenheim
o Jones
o Gomma
o DOE
o Numerical simulation – Shutler and Coats

* Cyclic steam injection model

o Boberg-Lantz

In-situ combustion

· Process description of In-situ combustion as dry forward combustion, wet combustion, reverse combustion

· Kinetics of in-situ combustion

· In-situ combustion models as Nelson, Crookston et al. andRamey

Thermal Project evaluation

* Project design
* Economic evaluation

Reference books: Enhance Oil Recovery Books

Phase Behavior of Petroleum Reservoir Fluids

Phase Behavior of Petroleum Reservoir Fluids studies about behavior of reservoir fluid with several parameters in reservoir. There are several parts of this course as listed below;


Phase Behavior Fundamentals.
• Phase Diagrams.
• Volumetric and phase behavior of pure substances.
• Volumetric and phase behavior of binary systems. Phase diagrams (P-V, P-T, P-x, y-x). Phase Equilibria
• Ternary Diagrams.
• Multicomponent systems. Classification of reservoir fluids based on phase diagrams, PVT and production data.
• Representation.

Oil and Gas Properties from Correlations
• Standard PVT tests, Differential Liberation, Constant Composition Expansion, Constant Volume Depletion (CVD),
• Review and definition of oil and gas properties used in reservoir engineering.
• Determination of Compositions.
• Swelling Tests, Minimum Miscibility Pressure (MMP), Separator Tests.
• Viscosity Correlations. Evaluation of Oil Viscosity Using Corresponding States models and Black Oil Models.

Generalized Phase Equilibria Models
• Petroleum Engineering Applications in Separation Processes.
• Low Pressure Phase Equilibrium.
• Extension of Corresponding States to Mixtures.
• The Principle of Corresponding States. Correlations and Models.
• Thermodynamic Properties of Homogeneous and Heterogeneous Systems.
• Phase Equilibrium: Vapor-Liquid-Equilibrium (VLE), Liquid-Liquid Equilibrium (LLE), Solid-Liquid-Equilibrium (SLE).
• Phase Equilibrium Models: Single Components. Reduced Equations of State (EOS.)
• Phase Equilibrium Models: Multicomponent Systems.
• Mixing Rules. Types of VLE Computations: Dew Point and Bubble Point Calculations. Multiphase Flash.
• Low Pressure Phase Equilibria Computations (Surface Separators).
• K-value correlations. Empirical methods to determine equilibrium ratios (K-values)
• Ideal Systems.

High Pressure Phase Equilibrium.
• High Pressure Phase Equilibria Applications (Reservoir)
• Evaluation of Fugacity Coefficients from Equations of State. (Soave Redlich-Kwong, Peng and Robinson).
• Equations of State Models (EOS). Cubic EOS. Root Selection.
• Evaluation of Phase Boundaries (Dew and Bubble Points) and Flash Equilibrium with EOS. Tuning of Equations of State (EOS).
• Generalization to any EOS.

Phase Behavior in Systems Containing
• Water. Low Temperature (Gas Hydrates) and High Temperature
• Gas Hydrates Chemistry and Properties.
• Evaluation of Gas Hydrate Formation Pressure and Temperature. Hydrate
• Inhibition Procedures.
• Formulation of Three-Phase Flash Problems (V-L1-L2). V=vapor, L1= hydrocarbon rich liquid phase and L2= aqueous liquid phase. Evaluation of Phase Equilibria when: (1) Solubility of Hydrocarbons in L2 and Water in L1 is Ignored, (2) Solubility of Water in L1 is considered, solubility of hydrocarbons in L2 is ignored, (3) All Mutual
• Solubilities are Considered.

Heavy Oil Fractions: Hydrocarbon Characterization Procedures
• Estimation Methods for Critical Properties. Characterization Factors.
• Fluid Characterization of the Hydrocarbon Plus Fraction ( C7 ). True Boiling Point Tests (TBP), Viscosity, and Specific Gravity.
• Computation of Viscosity of Oil-Wax Suspensions.
• Splitting and Lumping Schemes of Petroleum Fractions.
• Modeling of Wax Deposition in Pipelines.
• Wax Inhibitors.

Recommended Books
The Properties of Petroleum Fluids – William McCain Jr. Pennwell (1990) – (WM)
The Properties of Gases and Liquids – Bruce E. Poling, John M. Prausnitz, John O'Connell
PVT and Phase Behaviour Of Petroleum Reservoir Fluids, Volume 47 (Developments in Petroleum Science) - Ali Danesh
Phase Behavior of Petroleum Reservoir Fluids - Karen Schou Pedersen, Peter L. Christensen

Petroleum Engineer Salary Survey 2009

The worldwide median Base Pay in 2009 was $124,604, a decrease of about 2% from last year. Median Total Compensation was also down, from $158,103 in 2008 to an even $150,000. Even more dramatic was the reduction in the reported average annual increase in Base Pay to 6.6%, from a mark of 8.1% in the previous year. Only one region, Africa, reported a higher average increase in 2009 than in 2008.



Ref: SPE 2009 Salary Survey