Department & Faculty:

Department of Petroleum Engineering, Page 1 of 7

Faculty of Chemical & Natural Resources Engineering
Subject & Code: Semester: 2
Petroleum Economics and Management (MKPP 1113) Academic Session:
Total Contact Hours: 3 hours X 14 Weeks 2016/2017

Lecturer : Assoc. Prof. Dr. Muhammad A.Manan

Room : N01-438
Tel. : 07-5535733 / 012-7628267
Email : m-amanan@petroleum.utm.my / r-muhammad@utm.my
Section : 02
Prerequisite : None
Synopsis : Understanding of the big picture of petroleum industry is an
important prerequisite to successfully identifying, evaluating and
selecting petroleum projects. There are many factors that need
to be taken into consideration and these factors need to be
evaluated accordingly. The course focuses in giving an
understanding of petroleum industry and factors that influence
the feasibility of the petroleum upstream project. The cash flow
model incorporating PSC fiscal terms is introduced and several
risk analysis methods also introduced to be incorporated in the
cash flow model.

Programme Learning Taxonomy

Programme outcome Assessment
No. Course outcome
addressed methods
1 Propose an economic analysis PO1 (C5) Test, Exam,
spread sheet models to evaluate PO3 (CTPS4) Assignment
economic profitability of oil and gas
projects using various economic
indicators.

2 Devise cashflow of petroleum PO1 (C5) Test, Exam,

projects based on PSC terms. PO3 (CTPS4) Assignment
PO8 (TS2)

3 Propose how to manage producing PO1 (C5) Test, Exam,

field, production decline, and field Assignment
abandonment.

4 Integrate knowledge into PO9 (LS2) Project,

entrepreneurship decision making. PO11 (KK2) Assignment

Prepared by: Certified by: (Course Coordinator)

Signature: Name:
Name: Assoc. Prof. Dr. Muhammad A.Manan Signature:
Date: 14 February 2017 Date:
Department & Faculty:
Department of Petroleum Engineering, Page 2 of 7
Faculty of Chemical & Natural Resources Engineering
Subject & Code: Semester: 2
Petroleum Economics and Management (MKPP 1113) Academic Session:
Total Contact Hours: 3 hours X 14 Weeks 2016/2017

TOTAL STUDENT LEARNING TIME (SLT) BASED ON TEACHING-LEARNING

No. Teaching and learning activity SLT (hours)
1 Direct learning: (42)
(a) Lectures (50 mins × 42 meetings) 35
(b) Student-centered learning (laboratory visit and 7
demonstration, etc.)
2 Indirect learning: (72)
(a) Assignment ( 2 times) 20
(b) Project 12
(b) Revision 31
(c) Self-learning pre-assessment:
(i) Test 3
(iii) Final exam 6
3 Assessment: (6)
(a) Test (2 times) 3
(b) Final exam (1 time × 3 hours) 3
Total 120
No. of credits 120/40 = 3

Prepared by: Certified by: (Course Coordinator)

Signature: Name:
Name: Assoc. Prof. Dr. Muhammad A.Manan Signature:
Date: 14 February 2017 Date:
Department & Faculty:
Department of Petroleum Engineering,
Faculty of Chemical & Natural Resources Engineering
Subject & Code:
Petroleum Economics and Management (MKPP 1113)
Total Contact Hours: 3 hours X 14 Weeks
Chapter Topic
1 Introduction to the Petroleum
Industry
 Historical Facts
 World Hydrocarbon Reserves
 Reserves Distribution
 Key Players in Petroleum
Industry
 Objectives of Petroleum
Companies in Upstream
Investments
 investments.
2 Key Questions Asked in Petroleum
E&P Investment
 Influencing Variables in
Petroleum E&P investment
3 Petroleum agreements
 Roles of Petroleum Agreement
 Types of Petroleum Agreement
o Concession Systems
o Production Sharing
Contracts
o Service Contracts
 Ideal Objectives of a Host
Government in Designing the
Contract
 Elements that Petroleum
Company Needs in Petroleum
Agreement
4 Political Risk
 Definition
 Political Risk Events of
Petroleum Specific
Prepared by:
Signature:
Name: Assoc. Prof. Dr. Muhammad A.Manan
Date: 14 February 2017
Page 3 of 7
Semester: 2
Academic Session:
2016/2017
Topic Outcomes
Students should be able to:
 Outline the history and key issues in
petroleum industry.
 Categorize key players in the industry
such as government, OPEC,
International Oil Companies, National Oil
Companies, Service Companies and
their roles in the industry.
 Compare the objectives of petroleum
companies in their upstream
Students should be able to:
 Outline key questions that need to be
asked by petroleum companies in
upstream investment.
 Categorise the key influencing variables
in upstream investment.
Students should be able to:
 Analyse the roles of petroleum
agreement
 Outline the key elements in different
types of petroleum agreement
 Compare the objectives of host
government in designing the agreement
and what elements in the agreement that
the petroleum companies are hoping for.
Students should be able to:
 Outline the political risk
 Analyse political risk events of petroleum
specific.
Certified by: (Course Coordinator)
Name:
Signature:
Date:
Department & Faculty:
Department of Petroleum Engineering,
Faculty of Chemical & Natural Resources Engineering
Subject & Code:
Petroleum Economics and Management (MKPP 1113)
Total Contact Hours: 3 hours X 14 Weeks
Chapter Topic
5 Upstream Activities
 Bidding Phase
 Exploration Phase
 Appraisal Phase
o Understanding of
Petroleum Field
Development Plan
 Development Phase
 Production Phase
 Abandonment Phase
6 Petroleum Industry in Malaysia
 Historical Facts
 Malaysia Petroleum Facts
 Petroleum Development Act (PDA)
 National Petroleum Policy
 National Energy Policy
 National Depletion Policy
 Malaysia Production Sharing
Contracts (PSC)
7 Economic Evaluation of E&P Project
 Time Value of Money Concepts
 Methods of Economic Analysis
 Information Required for
Petroleum Project Feasibility
Study
 Project Discounted Cash flow
Model
 Incorporating PSC in Project Cash
flow Model
 Profitability Indicators
Page 4 of 7
Semester: 2
Academic Session:
2016/2017
Topic Outcomes
Students should be able to:
 Compare phases in petroleum
upstream project.
 Outline activities performed and costs
involved in each phase.
 Propose the Petroleum Field
Development Plan.
Students should be able to:
 Outline the historical and other
factual information regarding
petroleum industry in Malaysia.
 Analyse Malaysia government
policies related to petroleum resources
 Outline evolution of Malaysia PSC
Students should be able to:
 Outline the time value of money
concept (brief review)
 Understand methods of Economic
Analysis. (brief review)
 Categorize the information
required for petroleum project
feasibility study.
 Propose petroleum project cash flow
on project basis as well as
incorporating PSC fiscal terms in the
model.
 Compare the outputs of the cash flow
models
 Use technology in presentation to
defend the proposed oil and gas
project.
Department & Faculty:
Department of Petroleum Engineering, Page 5 of 7
Faculty of Chemical & Natural Resources Engineering
Subject & Code: Semester: 2
Petroleum Economics and Management (MKPP 1113) Academic Session:
Total Contact Hours: 3 hours X 14 Weeks 2016/2017

Prepared by: Certified by: (Course Coordinator)

Signature: Name:
Name: Assoc. Prof. Dr. Muhammad A.Manan Signature:
Date: 14 February 2017 Date:

Chapter Topic Topic Outcomes

8 Risk Analysis Students should be able to:

 Understanding of Risks in
Petroleum Projects
 Risk Analysis Methods
o Sensitivity Analysis
o Range/Scenario Analysis
o Probability Analysis
o Risk Simulation
 Incorporating Risk Analysis in the
Cash Flow Model
 Outline the risks in petroleum
projects.
 Compare risk analysis methods.
 Incorporate risk analysis
methods in the project cash flow
model.
 Discuss, summarize, and
synthesis the output of the analysis.

9 Managing the Fields Students should be able to:

 Managing the Producing Field
 Managing the Declining Field
 Managing Field Abandonment
 Define strategies for managing
the producing field by monitoring the
subsurface and surface facilities, and the
external and internal factors.
 Prepare strategies for
managing the declining filed by infill
drilling, workover activity, enhance oil
recovery, production debottlenecking,
and incremental development.
 Identify and discuss the
economic lifetime, and abandonment
funding and methods.
Department & Faculty:
Department of Petroleum Engineering, Page 6 of 7
Faculty of Chemical & Natural Resources Engineering
Subject & Code: Semester: 2
Petroleum Economics and Management (MKPP 1113) Academic Session:
Total Contact Hours: 3 hours X 14 Weeks 2016/2017

Prepared by: Certified by: (Course Coordinator)

Signature: Name:
Name: Assoc. Prof. Dr. Muhammad A.Manan Signature:
Date: 14 February 2017 Date:

Teaching Methodology : Lecture, discussion, seminar

Texts and References : References:

1. Steinmetz, R (Editor) (1992). The Business of Petroleum
Exploration. The American Association of Petroleum Geologists.
2. Newendrop, P.D. (1987). Petroleum Exploration Economics and
Risk Analysis. The Petroleum Publishing Company.
3. Hashim, Ismail (2005). Tuah Jebat di PETRONAS.
4. Johnston, D (1992). Oil Company: Financial Analysis in Non-
technical Language. Penn Well Publishing Company.

Academic Integrity : Academic integrity forms a fundamental bond of trust between

colleagues, peers, lecturers, and students, and it underlies all genuine
learning. At UTM, there is no tolerance for plagiarism or academic
dishonesty in any form, including unacknowledged "borrowing" of
proprietary material, copying answers or papers, or passing off
someone else’s work as one's own. A breach of ethics or act of
dishonesty can result in:
 failure of a paper or exam within a course
 failure of an entire course (blatant plagiarism, cheating on a test or
assignment)
 academic suspension or expulsion from the college

Assessment : The breakdown for grading is as follows:

 Final Exam 50%
 Test (2 times) 30%
 Assignments 10%
 Project 10%
(1) Technical content 12 %
(C5, A3, LL1-LL2)
(2) Presentation 5 %
(CS1-CS4, KK1-KK2: defend proposal)
(3) Peer evaluation 3%
(LS1-LS3)
---------
Total 100 %
---------
Department & Faculty:
Department of Petroleum Engineering, Page 7 of 7
Faculty of Chemical & Natural Resources Engineering
Subject & Code: Semester: 2
Petroleum Economics and Management (MKPP 1113) Academic Session:
Total Contact Hours: 3 hours X 14 Weeks 2016/2017

Prepared by: Certified by: (Course Coordinator)

Signature: Name:
Name: Assoc. Prof. Dr. Muhammad A.Manan Signature:
Date: 14 February 2017 Date: