This training course is split into two modules:

Each module is structured and can be taken as a stand-alone training course; however, delegates will maximise their benefits by taking Modules I, and II back-to-back as a 2-week training course.

DAILY AGENDA

Module I: 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

Measures of Project Profitability

  • 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
  • Internal Rate of Return computations (IRR)
  • Determining the Internal Rate of Return (IRR)
  • The risk of not understanding IRR

Analysing Project Specifics

  • 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

Risk Modelling in Practice

  • Identify Risks
  • Forecasting risk impacts & probabilities
  • Opportunity costs, sunk costs & salvage value of a project
  • Determining the Risk Priorities
  • The need for company cash flow
Day 4: Decision Analysis: Expected Value Concept
  • Basic Probability Concepts
    • Fundamental probability concepts
    • Mutually & non-mutually exclusive, independent events
  • Quantitative Project Risk Analysis
    • Semi-quantitative bow-tie process
    • Detailed risk quantification 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 II: 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
Objectives Icon

Certificate

  • On successful completion of this training course, KC Academy Certificate will be awarded to the delegates.