INDONESIAN PETROLEUM ASSOCIATION Professional Division Committee

PRACTICAL INVESTMENT APPRAISAL AND BUSINESS DECISION ANALYSIS IN PETROLEUM EXPLORATION & PRODUCTION
With special reference to the Indonesian PSC system
Dates Instructor : : April 25-29, 2005 (five day course) H.L. Ong, D.Sc. - Lecturer, Institute Technology Bandung - Advisor to P.T. Geoservices Hotel Bali Padma - Legian, Bali US$ 1,600 US$ 1,700 (IPA Members) (Non-IPA Members)

Venue Cost

: :

Includes: hotel accommodation for 6 (six) nights

PLEASE REGISTER AS SOON AS POSSIBLE TO THE IPA SECRETARIAT Wisma Kyoei Prince, 17th Floor (Suite 1701) Jln. Jendral Sudirman Kav.3 Jakarta 10220 Indonesia Phones : 572-4284, 572-4285, 572-4286 Fax. : 572-4259 E-mail address : ipa@cbn.net.id or riniipa@cbn.net.id

WHAT YOU WILL LEARN

Appreciation of national and international micro- and macro- economic issues Undertake preliminary estimation of capital and operating costs, set up cash flow statements and perform techno- economic project evaluation Proper evaluation of a bid proposal or ranking alternative investment proposals. Gaining increasing awareness of the economic principles that underlie business decisions. Better understanding of financial parameters influencing the profit of a project How to improve your business decisions under risk and uncertainty. Communicate more effectively with financial managers Prepare individuals to become financially independent

WHO WILL BENEFIT

The course has been designed for professionals who work in the oil and service industries. Many of the concepts and examples to be covered in this course can be of assistance in the management of small to medium enterprises or of personal financial affairs. Target attendees include: Explorationists (Geologists & Geophysicists) and Petroleum/Reservoir Engineers. Project managers, engineers, and supervisors. Commercial and Business Development analysts working for the service industries (Seismic, Drilling, Pipeline, Construction) Portfolio managers and contract-specialists involved in the preparation of cost and engineering estimates Bid Committee members who are evaluating tenders/bids Independent and individual operators

CONTENT Global economic outlook of the petroleum industry. Worldwide supply and demand.
Economic awareness in the divestment and investment of assets. Shareholders expectation. Economic characteristics of the petroleum industry. Country risk and cost of capital.

Petroleum finance and accounting. Financial statements and Ratio analysis.

Exploration vs. Production costing (SE vs. FC). Reserve and rate of production. Cash Flow concepts including various depreciation allowances. Building cash flow models. Exploration sunk cost and depletion of reserves. Profit/Loss accounts and LCF. The time value of money. Understanding compounding and discounting concepts and the use of formulae or tables for calculations of PV, FV, and AV. Annuity (capital recovery and sinking fund) in day-to-day operations. Practical techniques for the ranking of investment proposals. The calculation and use of Net Present Value (NPV), Internal Rate of Return (IRR), Benefit-to-Cost ratio, payback, Profit-to-Investment Ratio (PIR or DPIR), etc.

Decision analysis. How to identify and quantify project risks and uncertainties. Statistical and subjective probabilities. How to perform sensitivity analysis. Expected value and decision trees in exploration. Choosing the right discount rate.

The Indonesian Fiscal terms (Taxes, Bonus, DMO, etc.). Indonesian PSC vs. Royalty of

Austral-Asia. The role of oil and gas in the Indonesian economy. Evolution of the various types of agreements: PSC, JOB, EOR, and TAC. The new Laws on Oil and Gas and Autonomy of the regions.

INSTRUCTOR
H.L. Ong is a graduate of ITB and received a Government scholarship to pursue his graduate studies at the Colorado School of Mines where he earned his Doctor of Science degree. Dr. Ong has been teaching at ITB since graduating from Mines in 1968. He was instrumental in setting up P.T. Geoservices in 1971 and became the Principle Advisor of the company until his semi-retirement in 2002. This course is unique in that it is presented by a person with extensive teaching experience as well as running his own successful company for more than 30 years. As a result the speaker has the capability to explain the principles involved with many lively and topical examples throughout the course.

COURSE MATERIALS PROVIDED

The following comprehensive course materials are provided to enable each participant to further his/her studies: Course Notes and photocopies of pertinent references. Gitman, L.,J., 2003, Principles of Managerial Finance, 10th ed., Addison-Wesley. Newnan, D.G., 1988, Engineering Economic Analysis, 3rd ed., Engineering Press, Inc., California (In Indonesia published by Binarupa Askara, Jakarta, 1990). Newnan, D.G., 1990, Solution Manual of Engineering Economic Analysis, 3rd. ed. Binarupa Askara Publishing, Jakarta.

PREREQUISITES
No prior knowledge is assumed during the course and the subject matter is presented in a stimulating, logical, and practical manner. Just show interest, eagerness to learn, and willingness to work.

COURSE REGISTRATION FORM

Course Name : Practical Investment Appraisal and Business Decision Analysis in Petroleum Exploration & Production with special reference to the Indonesian PSC system April 25 - 29, 2005 (five day course) Hotel Bali Padma - Legian, Bali H.L. Ong, D.Sc. - Lecturer, Institute Technology Bandung - Advisor to P.T. Geoservices US$ 1,600.00 US$ 1,700.00 (IPA Members) (Non-IPA Members)

Dates Venue Instructor

: : :

Price

Includes: hotel accommodation for 6 (six) night

Attendee Name Company Phone/Facsimile E-mail address

: ______________________________________________________ : ______________________________________________________ : ______________________________________________________ : ______________________________________________________

Mobile phone no. : ______________________________________________________ Contact Person Period stay Flight detail Payment Method : : ______________________________________________________ : ______________________________________________________ : ______________________________________________________ Cheque Cash Transfer addressed to IPA Secretariat addressed to IPA Secretariat addressed to Bangkok Bank Ltd. - Jakarta Branch US$: 0309-100763-401 RP. : 0309-100763-001

Please return this form together with payment to the: IPA SECRETARIAT Wisma Kyoei Prince, 17th Floor (Suite 1701) Jln. Jendral Sudirman Kav. 3 Jakarta 10220 Phones : 572-4284, 572-4285, 572-4286 Fax. : 572-4259 E-mail : ipa@cbn.net.id or riniipa@cbn.net.id