Personal Development Portfolio: Economic Factors in Oil & Gas Projects

This personal development portfolio reflects on the understanding of economic concepts and prevalent market practices within the international oil and gas industry. It highlights the importance of understanding economic viabilities, assessing market facilities, and analyzing industry-level impacts. The reflection emphasizes the need to understand risks and uncertainties, including political, supply and demand, cost, and geological factors, to prevent project losses. Capital budgeting is identified as a crucial process for evaluating potential projects, such as constructing new plants or making significant foreign investments. The portfolio concludes by emphasizing the importance of evaluating economic factors before undertaking any project in the oil and gas sector.

Running head: PERSONAL DEVELOPMENT PORTFOLIO
PERSONAL DEVELOPMENT PORTFOLIO
Name of the Student
Name of the university
Author note

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From among all the concepts learnt during this program, the most important one is
understanding the economical concepts and the prevalent market practices in the international
market. According to me this is important because it has a vital role to play to find out many
different attributes of a project. This helps in getting a better idea about certain topics related
to the oil and gas industry that include product stream forecasting, capital budgeting,
economic analysis of different operations and risk and uncertainty as well. In any project
there is a need to understand the economic viabilities so that work can be proceeded with
accordingly. The analysis of economic impact assesses the facilities available in the market as
well as the industry-level impact on oil and gas industry. The risks and uncertainties need to
be understood so that the project does not have to face any loss in its venture (Ruqaishi and
Bashir 2015). The risks such as political, supply and demand, cost, geological and the risks
related to bottom line are required to be checked in a project related to oil industry and gas
industry. In case of an oil and gas company, the primary risk is aligning itself to the
regulations that are there to limit where, when and how oil extraction can be done. The
regulations and laws are different for different countries and the political risks increases in
cases where the oil and the gas companies work on certain deposits abroad. The countries
which have stability in their economy are preferred by these companies and those countries
that have a history of not only granting but also enforcing some long-term leases. Geological
risk is another major risk that considers factors such as difficulty in extracting oil. Deciding
on the fact that whether a chosen oil reserve is economically feasible is another important
factor. The supply and demand risk is also considered a major risk in this case and other
economic factors that are financial crises and macroeconomics factors can be responsible in
drying up the capital (Aris, Valentine and Mohamad 2015). The increasing demands of the
customers as well as market globalization put risk management high on the chart for the
companies that want to progress in the field. Performing risk management requires tools and

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techniques that can effectively identify as well as analyze the risks. Capital budgeting is that
process which a business makes use of to evaluate the potential projects. This also helps in
deciding on major investments. In case of the oil and the gas industry, the projects can be
construction of new plants or making huge investments in some venture outside the country.
These projects require capital budgeting before these get approved or rejected (Handfield,
Primo and Oliveira 2015). The potential opportunities need to be identified and evaluated. In
order to do the same available opportunities are required to be explored and estimations
made. Operation costs and implementation costs need to be estimated. Thus from this, I got a
clear idea of the importance of evaluating the economical factors that relate to the oil and gas
industry before carrying out any project in that sector.

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References
Aris, Z., Valentine, J. and Mohamad, F., 2015. Project management in oil and gas industry
context (oil & gas companies and contractors).
Handfield, R.B., Primo, M. and Oliveira, M.P.V.D., 2015. The role of effective relationship
management in successful large oil and gas projects: Insights from procurement
executives. Journal of Strategic Contracting and Negotiation, 1(1), pp.15-41.
Ruqaishi, M. and Bashir, H.A., 2015. Causes of delay in construction projects in the oil and
gas industry in the gulf cooperation council countries: a case study. Journal of Management
in Engineering, 31(3), p.05014017.