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Cross Border Petroleum Pipeline Projects and their Financial Exposures due to Political Risk The Energy industry has always faced political/country risks such as expropriation, unilateral tariff and royalty increases and adverse labor conditions when operating in developing countries. International Oil Companies(IOCs) often rely on qualitative approaches such as factor analysis and/or discrete (high/low/base case) scenarios to assess their financial exposures to political risk. However, upper management decision makers often struggle to translate these qualitative risk analyses into the impact on their project’s financial targets. Mr. Randall presents one way to quantitatively assess political risk exposure by combining a petroleum industry qualitative country risk factor analysis with an @Risk financial model. To illustrate this approach, he uses a case study of one of the world’s most ambitious, yet politically uncertain cross border pipeline projects: The Chad/Cameroon Crude Oil Pipeline.
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A Refined Approach for Defining Construction Project Uncertainty Risk analysis is a term or concept that that has many different meanings to many different people. Often projects include some form of qualitative risk planning, brainstorming or mitigation but few do true quantitative risk analysis at the budgeting phase. Many experts concur that if you don’t do some sort of quantitative analysis, you’re not really doing risk analysis at all and in a lot of cases you may even be wasting your time. Using knowledge and training from the PMI, AACE and Palisade combined with solid experience as a project manager and senior engineer in the heavy industrial sector, Jason has developed a new approach which is being adopted by industrial companies and organizations such as the Canadian Department of National Defence. The process is used for doing project risk analysis for quantifying uncertainty on capital construction budgets. What is unique about the approach is a dual S-Curve concept used for quantifying Contingency separate from Risk Reserve on the project. The analysis also yields Schedule Contingency and incorporates concepts such as Escalation and Cash Flow modelling.
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Environmental Liability Estimation Application of probabilistic, decision and risk analysis techniques is increasingly being applied in different industries and sectors to better understand and account for various uncertainties as it relates to costs, scheduling, and other project specific needs. Indeed, use of these techniques is increasingly being applied in the environmental remediation industry to address issues such as developing probabilistic cost estimates, defining strategies for reducing costs and other criteria, and estimating environmental liabilities for a site or portfolio of sites. ARCADIS has helped our clients, including oil and gas companies and various utilities, apply probabilistic and risk analysis techniques to predict and quantify their potential environmental liabilities. The information collected is typically used to develop strategies for reducing costs, track the performance of a particular portfolio and financial liability reporting purposes. The discussion will touch on the use of @RISK in conjunction with statistical approaches to model the uncertainties around these issues. Part of the discussion will involve use of case studies to highlight these methods and results.
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Integrated Natural Gas Supply and Marketing Optimization Model Increasing world wide demand for natural gas and price volatility are driving business requirements for more sophisticated tools to assist with optimizing portfolio production scenario’s to achieve the highest profit potential. This presentation discusses how the Palisade RiskOptimizer (SDK) is integrated into a physical asset and contract model to rapidly generate an optimal gas supply scenario to meet real-time contract quality and quantity terms. Business rules, constraints and gas flow network configurations generally include both linear and non-linear solution sets, which are ideally suited for the evolver analysis process. The presentation material is taken from current ENSYTE client experiences as well as from a meta-analysis of similar industry initiatives.
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Integrated Quantitative Project Risk Analysis - Structuring the Model Effectively A project risk analysis is only as good as the model that was used to prepare it. It is critical that the model be constructed to reflect the risks specifically associated with the project. The model must be able to accurately reflect the risks associated with schedule, quantities, cost and the residual unmitigated risk items from the qualitative risk analysis. The model should also take into account the interrelationships and dependencies of these items. The presentation will address these issues and present examples of how results can vary based on the level of detail used in preparing the risk analysis.
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Optimizing Oil & Gas Subsea Field Architecture Justin E. Morse
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Raja Ramachandran Upstream operators typically outsource subsea field layout designs to engineering design firms. The operator provides constraints on the number and location of wells, flow rates, fluid properties and topsides (units where the oil / gas flow for collection, for example floating production ships or truss spars). The subsea design firm is charged with providing the layout that connects the wells to the topsides through various components, including production trees, flow lines, jumpers and manifolds. Subsea field developments typically last for several years to decades. The intent of this simulation project is to determine the optimum subsea field architecture layout and component grades by minimizing the total system costs. These costs include the upfront capital, future intervention costs and the production revenue loss due to component failure and repairs. Though this project is based on a fictitious field development, the simulation principles can be extended to complex, real-world designs.
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