An Intensive 10-day Training Course
The 10-Day Advanced Project Economics & Risk Management
Improve Decision-making and Increase Investment Effectiveness
Modules
This course is split in two modules:
Module 1: Project Analysis: Tools & Techniques for Managing Risk & Uncertainty
Module 2: Advanced Project Economics, Risk & Decision Analysis
Each module is structured and can be taken as a stand-alone training course; however, delegates will maximise their benefits by taking Module 1 and 2 back-to-back as a 2-week training course.
Course Outline
Module 1: Project Analysis: Tools & Techniques for Managing Risk & Uncertainty
Day 1
Fundamentals of Decision Analysis
- What is Project Management Decision Analysis?
- The Purpose of the Project Business Case
- The Need for Systematic Risk Management for Decision Making
- Risk and Uncertainty on Projects
- Option Analysis
- Identifying Key Decision-making Factors
- Fundamental Tools of Engineering Economics
- Time Value of Money
- Appraisal Methods - Discounted Cash Flow Projections
- Time Equivalence
Day 2
Cash-Flow Modelling and Project Decision Analysis
- Financial Modelling and Project Evaluation
- Rate of Return Computations (IRR)
- Determining the Internal Rate of Return (IRR)
- The Risk of not understanding IRR
- Understanding the Project Context to assist in decision-making
- Determine stakeholders and their level of influence
- Capture Requirements
- Determine Scope of Work
Day 3
The Cost of Capital
- Capital & Operating Expenditures (CAPEX/OPEX)
- Estimating the Cost of Capital for a Project
- Benefit- Cost Ratio (BCR)
- Dis-benefits
- Identify Risks
- Forecasting Risk Impacts & Probabilities
- Opportunity Costs, Sunk Costs & Salvage Value of a Project
- Determining the Risk Priorities
- The Need for the Company Cash Flow
Day 4
Decision Analysis: Expected Value Concept
- Basic Probability Concepts
- Fundamental Probability Concepts
- Mutually & Non- Mutually Exclusive, Independent Events
- Qualitative Project Risk Analysis
- Semi-Quantitative Bow-Tie Process
- Detailed Risk Qualification and Prioritisation
- Expected Monetary Value
- Scenario Planning
- Sensitivity Analysis Tools
- Simulation Process
- Tornado Diagram
- Defining the Variables- PERT
Day 5
Decision Trees, EMV, Risk Responses and ROI
- Decision Tree Analysis
- Developing Decision Trees
- Solving Decision Trees
- Risk Responses
- Developing Risk Responses
- Evaluating Response Relevance
- ROI Analysis
- Understanding ROI
- Identifying ROI
- Evaluating and Presenting your Project Options
Module 2: Advanced Project Economics, Risk & Decision Analysis
Day 6
Development Economics
- A brief history of energy usage
- Principles of development economics
- Understanding of economic terms
- Inflation and its impact on nominal & real cashflows
- Project financing
Day 7
Uncertainty in Investments
- Handling uncertainty in capital projects
- Understanding probability concepts
- The expected value concept: features and pitfalls
- Expected Monetary Value (EMV)
- Expected Profitability Index (EPI)
- Expected Opportunity Loss (EOL)
Day 8
Risks and Uncertainties
- Risk & uncertainty
- Risk aversion and risk premium
- Exploration project threats and opportunities
- Economic decision criteria
- Decision tree analysis
- Probability distribution
- Monte Carlo simulation
Day 9
Setting-up Spreadsheet Calculations Using Excel
- Spreadsheet Calculations
- Cashflow analysis
- Sensitivity analysis calculations
- Tornado diagrams
- Introduction to Monte Carlo simulations using @Risk
Day 10
Practical Use of the @Risk add-on
- Developing an integrated economic model
- Developing and using an @Risk Model Analysis
- Project sensitivity analysis utilizing data from @Risk Model
- Training course final review and close
Certificate
Oxford Management Centre Certificate will be provided to delegates who successfully completed the training course.