training specialists to the upstream oil and gas industry

Strategic E&P Portfolio Risk Management, Modelling and Optimization

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Course overview

Risk management, stochastic modelling and optimization are essential requirements for upstream oil and gas decision making. The information provided by modern portfolio modelling techniques and tools also leads to improved insight and understanding of the potential contributions assets can make to specific portfolio combinations. A quantified corporate strategy, with clearly defined goals and constraints, integrated with portfolio models leads to more robust upstream portfolio decisions.

The course is designed for

    • Petroleum economists
    • Portfolio analysts
    • Business development and new venture managers
    • Acquisition specialists
    • Risk managers
    • Upstream strategy and planning professionals

Learning objectives

This course includes presentations, exercises and case studies focused on the upstream oil and gas sector. The materials presented are designed to provide delegates with knowledge of portfolio management issues and modelling techniques and how they are applied.

Course outline

Benefits of stochastic (probabilistic) portfolio valuation models
Measuring the probability of achieving key strategic and corporate targets
Risked portfolio simulation models: inputs and outputs
Portfolio optimization: Linear, non-linear and evolutionary algorithms
Applying optimizers to simulation model outputs
Enhancing portfolio understanding and decision making using optimizers
Portfolio modelling software considerations

Day Three – Organizational and business development factors

Organisational issues associated with portfolio management teams
Human factors and constraints to portfolio model implementation
Utility factors, preferences and biases of portfolio decision makers
Enterprise risk management constraints to portfolio management
Establishing short-, medium- and long-term planning horizons
Recognizing the value of optionality associated with certain assets
Influences of long-term and infrastructure assets on portfolio risk
Asset Acquisitions and divestments evaluated with a portfolio model
Performing gap analysis with the aid of a portfolio model
Using a portfolio model to assess strategic options and quantify goals
Integrating global and long-term considerations with portfolio selection

Day One – E&P portfolio characterization considerations

Benefits of a portfolio approach to oil and gas asset valuations and decision making
Key criteria to measure performance of upstream asset portfolios
Strategic goals and constraints are essential for portfolio decision making
Advantages of balanced and diversified upstream asset portfolios
Budget constraints and their influence portfolio capital allocation decisions
Applying the principles of financial asset portfolio theory to E&P assets
Distinguishing asset risk and portfolio risk
Efficient frontiers and feasible envelopes aid portfolio selection
Correlation among E&P assets and its influence on portfolio risk

Day Two – Portfolio modelling and optimization

Developing a portfolio model in combination with a quantified strategy
Factoring in asset limitations and synergies
Expected monetary value approach to quantifying upstream asset risk
Competitive bidding for upstream assets
Considering an asset portfolio independently of corporate constraints
Recognising the influence of corporate financial and strategic drivers
Different methods to quantify portfolio uncertainty and downside risk


Location Start Date End Date Cost Trainer Book
Upon request       Ian Tchacos Make enquiry

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Website: Studio Beam Ltd