Upstream Asset Evaluation & Stochastic Economic Modeling Framework
This post reconstructs the evaluation, financial modeling, and decision analytics framework used when leading an upstream (oil & gas) analytics team (circa 2015–2018). It blends technical reservoir & production modeling with fiscal, stochastic, real‑options, and portfolio layers plus emerging carbon governance. 1. Checklist (Top-Level Components) Scope definition Technical (subsurface & production) models Commercial & fiscal models Market & price modeling Cost & economic models Real options layer Stochastic engine & correlations Portfolio aggregation Risk & sensitivity Carbon / ESG integration Data architecture & governance Validation & model risk management Implementation blueprint 2. Scope & Objectives Asset lifecycle: exploration → appraisal → development planning → execution → ramp-up → plateau → decline → abandonment. Decisions supported: license bidding, sanction (FID), phasing, drilling sequence, facility sizing, hedging, M&A, divestment, suspension, expansion, abandonment timing. Outputs: NPV (pre/post tax), IRR, payback, PI, EMV / ENPV, free cash flow profiles, value at risk (P10/P50/P90), option-adjusted value, carbon-adjusted value, capital efficiency, portfolio efficient frontier. ...