Petrochemical Engineering PDF

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Amir Kahttak...

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Question Number 1: What is Petroleum Economics? Petroleum Economics involves the application of the techniques of economic analysis at every stage in the development of oil and gas exploration and production projects. The economics of oil and gas projects are affected by a range of factors, including: 1. 2. 3. 4.

The level of knowledge about the oil or gas field The location, type and number of wells Market conditions The effect of tax/royalty systems

By analysing factors like these, Petroleum Economists are able to assist in making investment decisions, such as deciding whether or not to drill an exploration well or whether or not to develop an entire gas production project. They are crucial in the negotiations around Production Sharing Contracts and purchasing oil and gas properties. Petroleum Economists are also involved in the assessment and management of the technical, economic and other risks associated with the different phases of an oil or gas projects. In short, Petroleum economics is about how oil and gas activities are driven by economic considerations, and how the values are shared. Just about anyone working with the petroleum sector needs to understand some fundamentals of its economics. Question Number 2: Important factors of considerations in Cash Flow, Revenue, and Expenditures of oil and gas petroleum economics. Answer: 

Cash Flow Basics

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Revenue

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Expenditures

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Tax and after Tax cash flows

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Product prices, net profitability and economic limits

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Fiscal Systems, Risk, and Investment Analysis

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Petroleum Economics Challenge

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Investment analysis, time value of money, economic indicators, and opportunity costs.

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Economics challenge

Expenditures, including capital and operating expenses....