Understanding the Economics of the Oil and Gas Industry
The goal of any commercial organisation is to maximise value for its owners, but often the understanding of value is diffuse and diverse.
Oil and gas reservoirs all vary in composition, all contain a minestrone soup of components and pseudo-components. These are processed into sales gas, LNG, LPG, NGLs, condensate, stabilised crude and onwards into petrochemicals and refinery products. The challenge is to maximise the value of these, first in design and then in operation. But do we know how much capital we should invest to generate an extra tonne of propane? To save 100 kW of power? Having comparable market values at our finger tips and understanding their capital equivalents is at the heart of maximising profits, shareholder returns and chasing the share price higher.
Understand the complexity of units in which the industry sells its products: bbls, sm3, Btu, SCF, tonnes, gallons, etc.
Be able to simply convert these to value in comparable units.
Understand the relative value of each of the industry’s products
Hence develop rudimentary methodologies for maximising returns in operation and design
What Will Attendees Learn?
The marginal value of the typical products of and oil and gas processing facility
The capital equivalent of these products
How to apply this knowledge in making decisions to support the pursuit of value of their organisations
Who Should Attend?
Anybody who is involved in the process of generating value for their organisations and its owners.
About the Presenter
MR. MALCOLM HARRISON graduated in Chemical Engineering in 1981 and completed an MBA in 1995. He has worked mostly in the areas of oil and gas, cryogenics and gas monetization. Mr. Harrison has worked for BP, BOC, Foster Wheeler and BG. He was Director of Process Engineering for Foster Wheeler and, most recently, was BG's Chief Process Engineer. He has travelled a lot, worked on all the continents except Antarctica, visited more countries and encountered more cultures than he can remember. While his foundations are in process engineering, the MBA sparked an interest in corporate strategy, in changing organizations and building high performing teams.