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Economics and Decision Analysis for Engineers PET685

This course teaches the skills required for a key component of an Engineer's job - creating value by making decisions that yield optimal returns on the allocation of human and financial resources. Engineers perform technical work to support the business objectives of the organization they work for (corporation, government). It is therefore important that they understand that business because it will influence the judgments they make.

Economic evaluations provide the main source of the organization's information by which investment and operational decisions are made regarding the most effective use of resources. There are many subtleties and assumptions that underlie the apparently straight-forward economic calculations that are often seen. Consequently, a fundamental understanding of the concepts behind economic evaluation and of techniques for performing them within a petroleum context, are essential skills.

The many uncertainties inherent to the offshore business create considerable uncertainty in the value that can be realized from resource-allocation decisions. Consequently, there will be a strong emphasis on evaluating the impacts of uncertainty, managing its resultant risks and planning to exploit its up-side potential. 


Course description for study year 2021-2022. Please note that changes may occur.

Facts
Emnekode

PET685

Vekting (SP)

10

Semester undervisningsstart

Autumn

Antall semestre

1

Vurderingsemester

Autumn

Undervisningsspråk

English

Tilbys av

Faculty of Science and Technology, Department of Energy Resources

Learning outcome
The course provides understanding and knowledge of economic and business concepts, time-value of money, discounted cash flow, cash-flows, net present value and other economic decision criteria, the decision-making process, multi-objective decision making, decision-tree analysis, and value-of-information & flexibility. Some of the psychological and judgmental aspects of how people respond to uncertain and complex decision situations will be discussed. 
Content

This course teaches the skills required for a key component of an Engineer's job - creating value by making decisions that yield optimal returns on the allocation of human and financial resources. Engineers perform technical work to support the business objectives of the organization they work for (corporation, government). It is therefore important that they understand that business because it will influence the judgments they make.

Economic evaluations provide the main source of the organization's information by which investment and operational decisions are made regarding the most effective use of resources. There are many subtleties and assumptions that underlie the apparently straight-forward economic calculations that are often seen. Consequently, a fundamental understanding of the concepts behind economic evaluation and of techniques for performing them within a petroleum context, are essential skills.

The many uncertainties inherent to the offshore business create considerable uncertainty in the value that can be realized from resource-allocation decisions. Consequently, there will be a strong emphasis on evaluating the impacts of uncertainty, managing its resultant risks and planning to exploit its up-side potential. 

Required prerequisite knowledge
None
Recommended prerequisites
Bachelor degree in engineering.
Eksamen / vurdering

Written exam and portofolio evaluation

Vurderingsform Vekting Varighet Karakter Hjelpemiddel
Written exam 40/100 4 Hours A - F
Folder evaluation 60/100 A - F

The course has a continuous assessment consisting of a portfolio and a final written exam. The course grade is made up of:·       60% portfolio, 5 assignments, duration = 1 semester·       40% final written examThe two elements will be graded using a letter-based grade. The overall course grade is calculated as a weighted average of each element and its percentage-based contribution. A resit exam is offered for the written exam, but not for the portfolio. Students who wish to re-take the portfolio may do so the next time the course is lectured.

Course teacher(s)
Course coordinator: Reidar Brumer Bratvold
Head of Department: Alejandro Escalona Varela
Method of work
Lectures, Interactive discussions, compulsory assignments, self-study or group work. Lecture language is English. Excel and Python will be used for assignments and tests. The course does provide a short introduction to Python but it is NOT a course in Python so the students will need to consult other resources for learning Python if they are not already familiar with it.
Open for
Exchange programme at Faculty of Science and Technology
Literature
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