Saturday, January 25, 2020

Direct and Indirect Impacts on Health

Direct and Indirect Impacts on Health Daisy Paco The task You are required to prepare a written report based on the information gained from Identify, assess and discuss both direct and indirect impacts on health the following determinants have with regards to planning, implementation, and the evaluation of health interventions. Determinant factors Demographic distribution of populations According to Statistics New Zealand this year New Zealand has an estimated population of over 4.5 million which based on the record from 2006 census 4, 027, 947 it was increased. During 2010 New Zealander’s fertility rate or births per woman is 2.1 and median child birthing age was 30 while in Maori populations fertility rate is 2.8 and median age is 26. Also in 2010 the infant mortality rate was 5.1 per 1000 live births for the total population and the age-standardized mortality rate (technique used to allow populations to be compared when the age profiles of the populations are quite different)[1] was 3.8 per 1000 which evidently reduced from 4.8 in the year 2000 which only means that there is health improvement among their citizens. For the life expectancy of female child born in New Zealand in 2008 was 82.4 years, and for males was 78.8 years. As well as forecast shows that there will be an increase life expectancy at birth from 80-85 years by year 2050, thus corresponds t o expectation for decline infant mortality. Since the ageing population of New Zealand is predominantly growing the demand for health and disability services is increasing too. It is generally recognised that increased life expectancy, due partly to the success of health interventions, has resulted in many countries facing a growing challenge of chronic illnesses and disabilities and an increasing demand for both acute and long-term health services (Goulding et al 2003). In fact the population by 2050 is predicted to extent to 5.3million, 36years to 43years increase median age and an increase of 60 older people from 18% to 29%. Therefore at the very basic level the growing statistics of old age people will definitely surge demand for both informal and formal services of health in the future. Political values Political values are set of roles and behaviours that are being shaped from within the political world. People usually acquire their political values through political socialization. Where in it can be from their family members, social media, friends, in school, book and person’s unique experiences. This factor is very essential in such way that a person’s awareness will boost them to pay particular attention in their health. For instances the people around you can be effectively influential with regards to health by merely having the values taken from social adherence like for example from school or books thought to be â€Å"prevention is better than cure†, a family with such food preferences, choosing a healthy lifestyle that probably passed to their next kin, and advertisement from medias which people may learn from it. Religious beliefs In New Zealand the predominant religion is Christianity with over half the population based on New Zealand Census 2006. At about 55.6% identified themselves as Christians, while 34.7% had no religion and 4% with other religion affiliation. With the arrival of missionaries indigenous Maori population convert themselves to Christianity from being in animistic traditional religion. Denominations of main Christians include Roman Catholics, Methodism, Presbyterianism and Anglicanism. Others are Pentecostal, Baptist and Latter-day-Saint. Religious belief is a distinct way or strong belief on divine intervention, existence or control with destiny, supernatural power and worship of a deity or deities. People with strong religious belief may cope with stress better and may avoid such bad alternatives to lessen stress like alcohol, smoking and drugs. Another is going to worship keeps people physically active thus decreases the risk in acquiring certain diseases and disability. Moreover, there are also negative impacts of religious belief on health such as psychological well-being and self-esteem maybe affected, causes negative emotions like fear and stress that contributes to have negative physiological effects, individual might engage to vices like smoking, drug use and drinking alcohol and lastly might stereotype in the group. Human values Human values for me are the person’s own notion or concept of how things are given importance. It is all about the decision made by individual for the pursuit of doing what is right or what is expected of them. Health can be influence depending on individual preferences. For example, you can be as healthy as you wanted to and as you choose to be. A person with strong value to health knows how to become one by having healthy lifestyle, proper management of disease, physical activities and avoiding such vices. Hence, some people are just careless of their health because it doesn’t really matter to them as long as they enjoy what they do without thinking of possible future result like smoking causes lung cancer, drug used leads to withdrawal, depression, mental illness and drinking alcohol for liver damage. Ethnicity Ethnicity is described as distinctive cultural and social practice preserved within the group between generations, a sense of identification with the group and often a common genetic heritage, and a common history and origin (Last 1995). New Zealand ethnicity make-up is diverse increasingly. It includes European origin which is still the leading single group, Pacific Islander, Maori, Asian and others. Ethnicity can have significant impact on health and on uptake of health services. Thus understanding and knowledge on ethnic backgrounds of a population can help improve the healthcare of such population. In addition, it is being addressed here in New Zealand the disparities of health due to ethnic orientation. And it is said that there’s still a difference between access of health services between Maori and non-Maori’s despite the presence of Treaty of Waitangi which gives them right and privileges on health services. As well as there’s a limited access to health m erely by ethnic discrimination. Traditions Traditions is a way of behaving, doing something and thinking that is being passed down from great generation to generation within a certain group or society either through word of mouth or practice. Traditions disparities influences attitude of patients towards medical care and their ability to manage, understand, and deal with the progress of an illness, the consequences of medical treatment, and the meaning of a diagnosis. Patients and their families bring values and tradition related to reporting of symptoms, notions of health and illness, expectations for how health care will be delivered, and beliefs concerning medication and treatments. Furthermore, traditions impact patient expectations and roles, managing death and dying patient, how much information about treatment and illness are desired, family and gender roles, bereavement patterns, and decision making processes. Therefore, it is important that when giving care to patient we pay due respect with cultural and traditional differences and must remain non-judgemental when given data or information that is different from us. References: Wikipedia. (2014, August 25). Demographics of New Zealand Wikipedia, the free encyclopaedia. RetrievedSeptember29, 2014, from http://en.wikipedia.org/wiki/Demographics_of_New_Zealand [1] Wikipedia. (2014, September 4). Age Adjustment. RetrievedSeptember29, 2014, from http://en.wikipedia.org/wiki/Age_adjustment Direct and Indirect Impacts on Health Direct and Indirect Impacts on Health 1. Identify, assess and discuss both direct and indirect impacts on health the following determinants have with regards to planning, implementation, and the evaluation of health intervention. Demographic distribution of population. The actual demographic distribution influences medical immediately and also in a roundabout way. In Completely New Zealand main the main population will be coping with Auckland. One of the most associated with migrants along with consumers are coping with this Auckland place. Thus, the requirement associated with well being ability will be additional throughout Auckland when compared with other areas associated with completely New Zealand. Folks need to have additional well being ability within the city place. In most nations around the world population is quite loaded with several places. Thus, it truly is hard to present player well being ability to help everybody. Moreover, several regions usually are not appropriate clear with the bad services. The idea measure likewise influences medical criteria. Several distant regions are very a long way away in the principal centre exactly where most of us are unable to accomplish generally there in time to offer the most beneficial health s ervices within the crisis. Inside Indian there is additional population associated with small get older. Whilst in Completely New Zealand you will find around 50, 000 people associated with old age while using difficulty with the dementia. Per just one study will probably be around 120000 after 07 a long time. Thus, will probably be a tremendous difficulty to the nation to handle the idea. b. Political values. Democratization can be a necessary to assure your thanks associated with human privileges, cultural money and also importance. As we key in the 3rd thousands of a long time your strategy associated with democratization is dispersing in order to a lot more countries. Your advancement, possibly be in which as it might, is moderately modest. Move forward throughout wellness morals to accomplish importance and also affection human nobility should not to last. Efforts to try and do importance throughout human companies tend to be invited perhaps by the nearly all reputable administrations. Market leaders assume the unequivocal aspect throughout getting ethical expectations throughout wellness recognition in which assure importance, money and also affection if you are. Politics beliefs dosage impact medical in a variety of technique. Politics get together has to make a decision your health-related spending budget. Moreover, government make a decision which often medicine might be distribut ed and also which often can not be distributed in the United States. Your politics get together also makes a decision the cost of your medicine and also drugs totally free medicine. For example, throughout Brand new Zealand individuals get cost-free drugs soon after many medications. The Costa Rica government also makes a decision in regards to the medical centre. Variety of hospitals and also area of the medical centre may be determined by the politics get together. Politics beliefs also effects about the amount of your health-related and also sanitary workers within your professional medical product. Certification in the workers also makes a decision by the government for your hospitals and also professional medical units. Govt sets a lot of the standards also for your looking forward to a scheduled appointment. Politics beliefs dosage also effects about the cost of remedy. Such as throughout The Indian subcontinent remedy associated with significant ailments similar to cancer, AS SISTS is free of cost throughout government hospitals. Therefore, politics beliefs have impacted the population wellness Religious beliefs. Religion will be the baseline with regard to take care of the wellbeing. Just like numerous religion have got their own values with regard to preserve wellbeing. As per Hinduism men and women prefer to take vegetable treatment as an alternative to look at the physician. Ayurveda will be the book from which Hindu receive tricks to treat the illness. Hindu men and women consider they have medical problems because of their bad points (Karma) they will perform. To the Muslim strict there are also unique values for your health issue. Muslim men and women prefer to eat residence food during their hospitalization. To the conventional treatment they will favour to visit to Hakim instead of physicians. Individuals involving Cameras will be more aware about replica. Consequently, they will compel the particular illnesses including HELPS by having the particular hazardous making love. The vast majority of orthodox men and women make use of to do hope with regard to restoration instead of treatm ent. The objective of Buddhist train would be to produce the brain to help its best possible which include the particular flawlessness involving sympathy as well as information. Otherworldly wealth includes building a merciful persona as well as dealing with the particular torment involving health issues as well as ruin inside a maximally ideal method. Buddhist community centre, as well as place professionals are usually offered to help you the particular traders who are curious by means of these types of practices. Human values Morals usually are grounded about socio-social, philosophical or maybe spiritual emotions connected with exactly what are good or maybe underhandedness. Morals is considered because the exercise to find affordable reason intended for spotting what is right or maybe inappropriate inside people routines as well as life-style. With this love, morals is surely an file format among wellbeing layout as well as traits, exactly where traits usually are perceived as helps as well as defences folks employ intended for picking targets, requires as well as actions. Morals look at the honest legitimacy on the conclusion. Price consists of each methodology as well as conclusion. A great functional methodology should be to appraise the influence connected with specific wellbeing selections about worth also to promise that selections taken complete increase worth. The actual progression as well as assurance connected with people legal rights as well as connected with therapeutic products and service s have been in a simple impression interfaced. The correct on the solitary individual to get correct data encouraged sanctioning the mandatory data scars about cigarettes leading to a confident health insurance and economic swing. Theres been any acquiring predisposition recently to reduce the difficulty connected with cultural insurance policy about personal people legal rights. Ethnicity. Ethnicity is a principal thing to consider influencing the fitness of individuals as well as teams. Ethnicity (or ethnic gathering) express a lot of national contrasts the way of which cultural parties tend to be represented, as well as there may be shut basic ostentation of which ethnicity is a socially developed character, rather than any hereditarily made a decision as well as persisting conviction which in turn decides carry out along with the features of the person, that being said, enrolment of your cultural accumulating is likely to infer particular distinct wellbeing problems as well as wants. Heres an example, the particular anticoagulation drug carbamazepine don and doff once again leads to considerable and in some cases dangerous treatment tendencies inside individuals connected with Asian kitchenware plunge. Certainly, most of these treatment tendencies may well presently happen inside traders who are not necessarily Asian kitchenware, and so they may not happen in all in dividuals connected with Asian kitchenware drop. However realizing has any kind of impact inside the way ones consultant solutions alternatives. Traditions. Most traditions have got frameworks of health and fitness convictions to describe what exactly condition is, just how maybe its treated or maybe taken care of, and also who ought to be integrated the entire time. Their education to that people see tranquil teaching seeing that possessing sociable value for them may have a significant impact on their own collecting to information provided and also their own power to put it to use. Traditional western industrialized sociable requests, for instance, America, that see infection as a possible after effect of trait rational phenomena, suggest regenerative drugs of which challenge micro organisms or maybe utilize complicated engineering to detect and also treat sickness. Diverse sociable requests recognize of which condition is the after effect of otherworldly phenomena and also thrust ask to The almighty or maybe various other serious intercessions of which counter this presumed shame of powerful causes. Traditional troubles assume a true aspect in affected individual consistence. 1 study shown that a collecting of Cambodian grown-ups along with minor elegant instruction pursued important deliberations to visit remedy nevertheless performed so you might say foreseen using fundamental idea of just how alternatives along with the body operate. Quite a few African-Americans share within a culture of which fixates within the essentialness of loved ones and also cathedral. You can find extended link provides along with grandmother and grandfather, aunties, uncles, cousins, or maybe those people who are not really naturally similar nevertheless who assume a crucial aspect inside the loved ones structure. Typically, a vital comparable will be counselled with regard to critical medical choices. The particular members are a paramount aid supporting system for many African-Americans. References Retrieved from http://www.humiliationstudies.org/documents/GabrHealthEthics.pdf Retrieved from http://www.ucema.edu.ar/u/je49/capital_humano/Murphy_Topel_JPE.pdf Retrieved from https://www.health.govt.nz/system/files/documents/publications/cornwallanddavey.pdf

Friday, January 17, 2020

How to Communicate Effectively

The topics we have discussed this week relates to the video in ways that demonstrate how to communicate effectively and keep the focus of the audience on what the writer or the speaker is talking about. It teaches how to become a talented speaker and how to line up thoughts in the right perspective to gain trustworthiness from the particular audience that is welcomed by the subject chosen to speak about.This video was design to give everyone who watched it an idea of how to motivate himself s a public speaker. It gives ideas on how to enhance the power of the abilities a public speaker has on influencing people that are listening and it gives inspiration to those who the message touch in a special way. These are things in which we have discussed and relate largely on the speakers' ability on how well these tips are used to impact the ears of the listener. The most relevant practice in the video to me is the one that provides insight on how to win over the audience.First a speaker mus t hose a topic that the people want to hear about rather than picking something that appeases him. To get the crowd involved the speaker should ask questions that will allow the audience to think about the message that is being conveyed to produce a desire to continue learning more about the topic. One to attract the audience when publicly speaking is the ability of knowing what to wear to attract the attention of the crowd. I believe that the combination of dress wear and appearance of the speaker plays a major role in acquiring the attention of the audience.My advice about delivering an effective speech begins with attracting your audience. A speaker can capture the audience attention by taking advantage of the audience by giving them what they want. The speaker should do the homework and research needed to provide accurate and dependable information to prove his findings on any given topic he decides to speak about. Accuracy will help influence the listeners and persuade them int o hearing the speaker deliver the entire message. How to Communicate Effectively Good evening everybody, I hope you enjoy my speech. My topic today is communication. My speech is titled â€Å"How to communicate effectively. † Because I am a poor communicator, especially to communicate in English. Today my purpose is to hope you all can become effective communicators. Let's discuss effective communication techniques. Getting your pointacross and letting people know how you feel is very important. Sometimes bad decisions are made and people come to the wrong conclusions because of poor communication. Therefore, good communication can help you succeed in life. Here's some advice on how to communicate effecively. First, communication is transmitting a message. Communication is a process of sharing information. It's the exchange of thoughts or ideas. Communication is a powerful tool. It's getting a message across. It's also receiving facts or inofrmation. Effective communication skills are essential. Effective communication leads to success. Good communicators are always in high deamand. Why good communicators are in high deamand, because many employers are willing to pay big salaries to good communicators. Second, the key to communication is clarity. We should always make communication clear and direct. We should never be fancy or verbose. Always keep the message simple. Keep it specific and to the point. Keep it very easy to understand. Say only what's important. Say what's relevant and practical. Keep your message detailed but brief. Third, the goal of communication is understanding. The message must be understood. The audience must comprehend. To do that , you need to know your audience. You must know your listerner's background. You must tailor your message and style to suit them. Choose your words carefully. Remember â€Å"less is more. Sometimes, less of something is much better. Remember â€Å"quality is more important than quantity. † Finally, follow these tips to communicate like a pro! Practice every chance you get. Practice is the key to learning. Good communicators repeat the main message to make it more understandable. They reinforce the meaning through repetition. They always ask for feedback to make sure and reconfirm to themselves that they wre understood. They repeat the main idea to make it more understandable. Good communicators also use body language. Every society has a unique physical language. I's important that you're aware of this. Most people use nonverval communication. Most of the time it's subconscious. Good communicators use hand gestures and emotional expressions. They use various speaking tones to get attention. Body language expresses what's really going on. You can learn a lot about a person. Just observe themany sinals they're sending you. The arms and legs are a telling source. We must be familiar with basic body language. In conclusion, organize your thoughts before you speak. Think twice before you open your mouth. Always keep the message simple and clear. Say what you mean and mean what you say. Never lie and never mislead anyone. Say it with style, confidence and enthusiasm. Make sure your're understonnd. Make sure you practice a lot and rehearse. You'll soon be anefficient communicator. In fact, to say is one thing to do is another. It's easy to say but uneasy to work. As you know I am a bad communicator, especially in English to commuicate. All of my friends and family member didn't know what I was saying. All the feedback I have are â€Å"Please say that again. I'm a little confused. Or I hope you can explain it more clearly to me. † How poor I am. That's why I think good communication is very important. Hope everyone become effective communicators.

Thursday, January 9, 2020

My Personal Experience My Experience In My Life

We all have our own opinions on things. Some people have strong opinions. When people with strong feelings get together and notice they have differing opinions, it can lead to arguments. That’s what happened in my case. Recently, I experienced my first big fight with my parents over how many college classes I should be able to take. Ever since I was little, I have always tried to do my very best in classes and really push myself. I have also always been a perfectionist and been very on top of my work. I have always wanted to get things done as soon as possible and get ahead anytime I can, whether that is just one assignment or taking a whole class before I need to. Every time I could have taken an honors or AP class, I have. I even†¦show more content†¦I was delighted by the news of being able to finally be able to go to college. Later that day, I went home and eagerly told my parents the news. My excitement soon turned grief when my parents told me they were not sure if they wanted me to take so many college classes. They explained how college classes are not easy at all and they did not want me to get discouraged by the demanding classes and work load. My parents told me that I could take some college classes, two maybe, but not all four when first starting dual enrollment. My dad argued that I did not know anything about how challenging classes at college and are barely comparable to high school classes. Both of my parents brought up how much a struggle AP Biology was for me and how much time and effort I put into the class, yet I was not even able to pass the exam. They explained how classes at Valencia would be like the workload of AP Biology times four, or even more challenging. While those were good arguments, I was still wanting to take all four classes. Although AP Biology was hard for me, I had to be at school for seven hours a day, focusing on each class an hour a day. If I dual enrolled, I would only have to be at school for two hour s, leaving twenty-two hours for me to do everything else for college. I argued how I have been working hard for this my whole time being in school. I have gotten an â€Å"A† in every class inShow MoreRelatedMy Personal Experience : My Experience In My Life1003 Words   |  5 Pagesdifficult to write about my life—not because I do not know what to say, but because I am often fearful of sharing my experiences and having them impact how people view me. My identity and upbringing are not necessarily unique, but I have been in situations that society tends to be uncomfortable with. Repeated sexual assaults, psychological abuse, neglect, and financial hardships are factors in my life that I tried to forget when I started college. Now that I am at the end of my undergraduate educationRead MoreMy Personal Experience : My Experience In My Life1097 Words   |  5 Pagesbirthed in Syria and a mother from the coast of Long Beach, California, my childhood was, to say the least, i nteresting. However, everything that happened from my birth until now, all made me who I am today, someone I am very proud to have become after these seventeen years. The first three years of my life were spent on the West Coast in the city of Irvine, California. I don’t remember too much from these years, but I do know my parents labored long shifts, sacrificing precious time to support anRead MoreMy Personal Experience In My Life990 Words   |  4 Pagesare only given one shot. Therefore, it is at our best interest to live life to the fullest. Over the years, I have been able to analyze how I’ve struggle from stepping out my comfort zone. I found myself on the same routine for the first 18 years of my life. With that being said, it is a major key to try new things as we learn to grow, therefore you won’t live a bring life. Every chance I get I take on new things to enhance my person. While doing so, I’ve been able to step outside the box. TryingRead MoreMy Personal Experience In My Life940 Words   |  4 Pagescareer and in life, your character must drive you toward your aspirations. Throughout life, several experi ences have molded me into a person of resilience, empathy, and composure. Such values have allowed me to reach my goals and serve my community. In supplement to my intelligence, these assets render me an exceptional student and employee. The ability to be resilient is at the core of who I am, and the challenges that have created this strength have taught me empathy. Because of my weight, I facedRead MorePersonal Experience In My Life1002 Words   |  5 PagesA personal experience I have encountered would be growing up without my birth parents. At the age of 6 my mother put me up for adoption. My father was no we’re to be in sight, I never meet him in my entire life. Growing up in the foster system has a lot of pros and cons for example, I was separated from my brothers and sisters for a very long time, also there would be days that I would go to two or three different homes in a single day. Bouncing around from family to family is not the way a kid shouldRead MorePersonal Experience In My Life1344 Words   |  6 PagesI worked hard at my studies, homework and research and I put my education above everything else. If I was going to pass this tough course with good grades, or pass it at all, my studies had com e first, above everyone and everything else which wasn t going to be easy, but it had to be done. I took my computer, notes and books on every vacation, starting off every day and ending every night working diligently on my dissertation. I got frustrated and discouraged at times, but with all the supportRead MoreMy Personal Experience In Personal Life774 Words   |  4 PagesMy mother perpetually advises me by stating â€Å"à ¦ ¸Ã  ¦ °Ã  § Ã  ¦ ¬Ã  ¦ ¦Ã  ¦ ¾ à ¦â€ Ã  ¦ ªÃ  ¦ ¨Ã  ¦ ¾Ã  ¦ ° à ¦ ¸Ã  §â€¡Ã  ¦ °Ã  ¦ ¾ à ¦â€¢Ã  ¦ °Ã  ¦ ¾,† which translates from Bengali to English as â€Å"always do your best.† Taking heed of my mother’s advice has led me to always try to be the best possible version of myself, in school and outside of it. Knowing myself, junior year was going to be arduous as is; I would be studying profusely for my SATs and ACTs, going nights with minimal sleep as I would be taking nine total classes, eight of which were Advanced Placement classes, andRead MorePersonal Experience In My Life997 Words   |  4 PagesJohnny and Cora, my younger siblings, their lunches again today. It’s been very hard on me, I have so much more responsibility than I have ever had before. W ith my older sister, Betsy, sick in bed with the Spanish Flu, my mama working in a factory, and my father away fighting in the Great War, I have to do everything I can for my family. I cook, clean, get the kids ready, help with homework, care for Betsy, and I don’t mind it all that much. The only thing I miss most about my old life is getting toRead MorePersonal Experience In My Life1399 Words   |  6 PagesMy time working at a children’s psychiatric hospital helped me realize my strength and taught me more compassion than the rest of my life combined. Many times I had questioned if I was cut out for this work and if I was doing any good trying to help these children. I had to learn to walk on the fine line between growing thick skin and showing love and acceptance to kids who are seemingly unlovable. My experiences have continued to shape who I am had help give me perspective for when I find myselfRead MoreMy Personal Life Experience1293 Words   |  6 Pagesintere sts, life experiences and commitments, I know that I will enrich the UWM community. I believe that life experiences are extremely crucial in self-development. The more you experience, the more you grow as an individual. I say that with such pride because I can say myself that the life experiences I have gone through has shaped who I am. Commitments rather they are large or small, you are dedicating yourself to something which comes easy to me. When I am dedicated to something, I give it my all. One My Personal Experience My Experience In My Life Everybody has a diverse environment in which they grew up in, and it is unique to the individual, never to be replicated. I have experienced this sense of variance first hand. Growing up with a father birthed in Syria and a mother from the coast of Long Beach, California, my childhood was, to say the least, interesting. However, everything that happened from my birth until now, all made me who I am today, someone I am very proud to have become after these seventeen years. The first three years of my life were spent on the West Coast in the city of Irvine, California. I don’t remember too much from these years, but I do know my parents labored long shifts, sacrificing precious time to support an infant and young child. 2002 was the year we†¦show more content†¦I accepted who I was and where my roots stemmed from. For many years after that, I teetered between the Arabic speaking homes of my father’s branch, and the sunny beach houses of Southern California on my mom’s side. I ate foods that none of my peers had known to exist and celebrated holidays unheard of to most Americans. Nevertheless, I prized my variance that made me unique from the rest of the children at school. But what I hadn’t been aware of in my unknowing childhood, was that discrimination would come with being culturally atypical. Throughout my childhood, I was open about where my roots originated; I enjoyed being different from the norm. As I aged, however, I began to learn the meaning of stereotypes, and the opinion others had on unfamiliarity. I first heard a racial remark against Muslims in middle school, an institution established for learning, for equality, for comfort. They were always jokes, none directed towards me, as it was difficult to judge my origins solely based on my looks. Although they claimed the remarks to be harmless and untrue, it was evident that the individuals spewing the comments believed some truth to the distaste they spoke of, as th e repetition proved it. It was always the same ignorant comment - all Muslims are terrorists. Perhaps the stereotype originated with the devastating attack on American soil years prior by a few unethical individuals. Perhaps peopleShow MoreRelatedMy Personal Experience : My Experience In My Life1003 Words   |  5 Pagesdifficult to write about my life—not because I do not know what to say, but because I am often fearful of sharing my experiences and having them impact how people view me. My identity and upbringing are not necessarily unique, but I have been in situations that society tends to be uncomfortable with. Repeated sexual assaults, psychological abuse, neglect, and financial hardships are factors in my life that I tried to forget when I started college. Now that I am at the end of my undergraduate educationRead MoreMy Personal Experience : My Experience In My Life1132 Words   |  5 Pagesget together and notice they have differing opinions, it can lead to argumen ts. That’s what happened in my case. Recently, I experienced my first big fight with my parents over how many college classes I should be able to take. Ever since I was little, I have always tried to do my very best in classes and really push myself. I have also always been a perfectionist and been very on top of my work. I have always wanted to get things done as soon as possible and get ahead anytime I can, whether thatRead MoreMy Personal Experience In My Life990 Words   |  4 Pagesare only given one shot. Therefore, it is at our best interest to live life to the fullest. Over the years, I have been able to analyze how I’ve struggle from stepping out my comfort zone. I found myself on the same routine for the first 18 years of my life. With that being said, it is a major key to try new things as we learn to grow, therefore you won’t live a bring life. Every chance I get I take on new things to enhance my person. While doing so, I’ve been able to step outside the box. TryingRead MoreMy Personal Experience In My Life940 Words   |  4 Pagescareer and in life, your character must drive you toward your a spirations. Throughout life, several experiences have molded me into a person of resilience, empathy, and composure. Such values have allowed me to reach my goals and serve my community. In supplement to my intelligence, these assets render me an exceptional student and employee. The ability to be resilient is at the core of who I am, and the challenges that have created this strength have taught me empathy. Because of my weight, I facedRead MorePersonal Experience In My Life1002 Words   |  5 PagesA personal experience I have encountered would be growing up without my birth parents. At the age of 6 my mother put me up for adoption. My father was no we’re to be in sight, I never meet him in my entire life. Growing up in the foster system has a lot of pros and cons for example, I was separated from my brothers and sisters for a very long time, also there would be days that I would go to two or three different homes in a single day. Bouncing around from family to family is not the way a kid shouldRead MorePersonal Experience In My Life1344 Words   |  6 PagesI worked hard at my studies, homework and research and I put my education above everything else. If I was going to pass this tough course with good grades, or pass it at all, my studies had com e first, above everyone and everything else which wasn t going to be easy, but it had to be done. I took my computer, notes and books on every vacation, starting off every day and ending every night working diligently on my dissertation. I got frustrated and discouraged at times, but with all the supportRead MoreMy Personal Experience In Personal Life774 Words   |  4 PagesMy mother perpetually advises me by stating â€Å"à ¦ ¸Ã  ¦ °Ã  § Ã  ¦ ¬Ã  ¦ ¦Ã  ¦ ¾ à ¦â€ Ã  ¦ ªÃ  ¦ ¨Ã  ¦ ¾Ã  ¦ ° à ¦ ¸Ã  §â€¡Ã  ¦ °Ã  ¦ ¾ à ¦â€¢Ã  ¦ °Ã  ¦ ¾,† which translates from Bengali to English as â€Å"always do your best.† Taking heed of my mother’s advice has led me to always try to be the best possible version of myself, in school and outside of it. Knowing myself, junior year was going to be arduous as is; I would be studying profusely for my SATs and ACTs, going nights with minimal sleep as I would be taking nine total classes, eight of which were Advanced Placement classes, andRead MorePersonal Experience In My Life997 Words   |  4 PagesJohnny and Cora, my younger siblings, their lunches again today. It’s been very hard on me, I have so much more responsibility than I have ever had before. W ith my older sister, Betsy, sick in bed with the Spanish Flu, my mama working in a factory, and my father away fighting in the Great War, I have to do everything I can for my family. I cook, clean, get the kids ready, help with homework, care for Betsy, and I don’t mind it all that much. The only thing I miss most about my old life is getting toRead MorePersonal Experience In My Life1399 Words   |  6 PagesMy time working at a children’s psychiatric hospital helped me realize my strength and taught me more compassion than the rest of my life combined. Many times I had questioned if I was cut out for this work and if I was doing any good trying to help these children. I had to learn to walk on the fine line between growing thick skin and showing love and acceptance to kids who are seemingly unlovable. My experiences have continued to shape who I am had help give me perspective for when I find myselfRead MoreMy Personal Life Experience1293 Words   |  6 Pagesintere sts, life experiences and commitments, I know that I will enrich the UWM community. I believe that life experiences are extremely crucial in self-development. The more you experience, the more you grow as an individual. I say that with such pride because I can say myself that the life experiences I have gone through has shaped who I am. Commitments rather they are large or small, you are dedicating yourself to something which comes easy to me. When I am dedicated to something, I give it my all. One

Wednesday, January 1, 2020

Formulation Of Profitability Of New Exploration Block - Free Essay Example

Sample details Pages: 17 Words: 5101 Downloads: 3 Date added: 2017/06/26 Category Statistics Essay Did you like this example? This report is aimed to summarise the understanding of Indian Petroleum fiscal system and its application in the NELP bidding round. The study has been undertaken considering one exploration blocks from an investors perspective. The study deals with the measurement of the profitability potential. Don’t waste time! Our writers will create an original "Formulation Of Profitability Of New Exploration Block" essay for you Create order The economic modelling has been carried out using the production profile data for offshore block MB/OSN/2005/4. The assumptions for the oil gas prices as well as the exploration and development costs are as per the DGH documents. The sensitivity analysis has been carried out in order to find the impact of the oil gas price, cost and the discount rate. The analysis shows the significant effect of oil price on the project economics. 1. Introduction Government of India liberalized the Oil Gas sector by introducing the NELP (New Exploration Licensing Policy) regime in 1997. Under this regime, the participation of private players and foreign investors in Oil Gas Exploration Production was encouraged through offering of an attractive investment climate like 100% FDI participation permitted. This is turn has posed many opportunities for private players to increase their investment in to the Indian EP sector. NELP has provided a major impetus to exploration efforts in the country. According to the DGH statistics, the areas under exploration have increased more than 4 times to 48% of Indian sedimentary basin area, up from 11% before implementation of NELP. Implementation of NELP has resulted in 68 oil and gas discoveries made in 19 exploration blocks. Hydrocarbon reserves accretion has been more than 600 Million Metric Tonne of oil equivalent. With the Indian hydrocarbon prospectivity looking impressive and with the NELP regime offering good commercial terms, a potential investor could stand to gain substantial investment returns by reaping the benefits if participating under NELP. It is interesting to examine the investors approach towards assessing the profitability potential of an investment opportunity presented under the NELP. Such an examination would be important for two reasons. First that it would show the economic viability of undertaking a typical exploration project under NELP. In this project, an attempt has been made to undertake the economic assessment of exploration blocks awarded under NELP for the reasons cited above. The blocks which have been awarded are currently being operated by the Gujarat State Petroleum Corporation (GSPC), one of most successful EP operators in India in recent years. New Exploration and Licensing Policy (NELP) was launched in 1997 with an objective to accelerate exploration and production activities in the upstream sector and attract private investment in the sector. The policy framework provided a level playing field to the domestic public sector, private companies and foreign companies by offering similar regulatory, fiscal and contractual terms for exploration and production of oil and gas. This was a major change from the pre NELP regime under which ONGC and OIL were granted with Petroleum Exploration Lease on a nomination basis. Under NELP, the companies were awarded licenses for exploration blocks on the basis of international competitive bidding. In order to maintain greater transparency in the bidding process, the award of blocks is made on the basis of quantitative bid evaluation criteria, which are made public in the notice inviting offers. The salient features offered under the NELP policy can be summarized as under: Fast track approval mechanism through single window Empowered Committee of Secretaries. Foreign participation permitted up to 100%. Model Production Sharing Contract (PSC) to aid in negotiation. No commitment for any minimum expenditure. The limit for recovering cost recovery is biddable up to 100%. No signing, production or discovery bonus is to be paid. Contractors are free to market oil and gas in the domestic market at market determined price. Securitization of participating interest for raising project finance is allowed. There is no bank guarantee requirement for the work programme. Participation is permitted through unincorporated joint ventures The contract assures fiscal stability (clauses for change in tax laws). Transactions under production sharing contracts expressed in USD. (Source: DGH, MOPNG) NELP has provided a major impetus to exploration efforts in the country. According to the DGH statistics, the areas under exploration have increased more than 4 times to 48% of Indian sedimentary basin area, up from 11% before implementation of NELP. Implementation of NELP has resulted in 68 oil and gas discoveries made in 19 exploration blocks. Hydrocarbon reserves accretion has been more than 600 Million Metric Tonne of oil equivalent. With the Indian hydrocarbon prospectively looking impressive and with the NELP regime offering good commercial terms, a potential investor could stand to gain substantial investment returns by reaping the benefits if participating under NELP. Figure 1 PD Department Activities [Source: GSPC PD Department] AIM Develop an economic model that supports companys investment decision making process for the upstream projects company has considered to be potentially value adding to its upstream portfolio. The methodology followed is to critically examine the impact of project specific parameters on the techno-economic feasibility of upstream projects undertaken by company. To meet this aim, this case study has examined one upstream project (see Table 1) undertaken by company with respective techno-economic evaluation objectives shown below the exhibit. Table 1 List of Block Considered Upstream Project Operator Partners Acreage Awarded 1 MB-OSN-2005/6 ONGC-GSPC (NELP Round V) OBJECTIVE Techno economic Evaluation Objectives: Project was evaluated assuming the evaluation was at the pre-bidding stage and the operator sought to generate block profitability potential through economic analysis. In order for commencement of study, the following study objectives were followed Objectives Review literature of global petroleum fiscal systems to examine key fiscal terms favourable to investors Review of Indias NELP regime through examination of bidding evaluation criteria offered under the forthcoming licensing round. Building of an economic model in line with the design and structure of the Indian Petroleum fiscal regime or NELP PSC Carrying out economic modelling on the above project to simulate project economics under the hypothetical cases specified Undertake analysis and interpretation of results to provide the operator with information necessary for making the effective investment decision i.e identify whether the project is a value adding opportunity and complements companys upstream portfolio Draw key conclusions and recommendations after discussion and analysis of results. CHAPTER 2 LITERATURE REVIEW Literature Review This chapter aims to address the first study objective i.e. Review literature of global petroleum fiscal systems to examine key fiscal terms favourable to investors. This is done with an objective to examine the typical manner in which an oil investor examines an investment opportunity in the upstream sector. Petroleum Fiscal System The petroleum fiscal systems exist for the negotiation between the host government and oil companies. These fiscal systems are numerous due to the scope of flexibility and change in economic as well as political conditions. The objectives of a government are to à ¢Ã¢â€š ¬Ã‹Å"maximize the wealth from its natural resources by encouraging appropriate levels of exploration and development activity and get as high share of the profit as possible. The objectives of oil companied are à ¢Ã¢â€š ¬Ã‹Å"build equity as well as increase shareholder interest and maximize the wealth by finding and producing oil gas reserves at the lowest possible cost and the highest profitable margin. The petroleum fiscal system assists in achieving mutuality of interests between the two parties by creating a win-win situation for between government as well as oil companies. This can be achieved by enabling provisions for Recovery of costs Division of profits arising from the petroleum operations. The bargaining relationship depends mainly on profitability and risk. It is crucial to relate the fiscal packages on the geological basis and where on the geological learning curve that province is. The figure shows the geological learning curve. Recoverable Years Years Figure 2- Geological Learning Curve [Source: Slatsveen, 2005] The petroleum fiscal system can be classified in two categories namely: Concessionary system and Contractual system. Concessionary system is where private ownership of mineral resources is allowed once they are successfully exploited and produced by a company. The state is liable to collected the economic rents (explained later) generated through taxes and royalties. This type of system is followed in Western countries such as United States, UK, Norway, Brazil etc. The contractual systems are where the government will retain ownership of the petroleum resources produced by a company but will guarantee a return of the share of production or revenue from the sale of oil gas depending upon the terms negotiated in the contractual arrangement in the PSC (Production Sharing Contracts). Another type of contract is the Service Contract (SC), where the contractor is given a fee for its Exploration Production activities. So, in the PSCs the contractors are awarded in kind whereas in SCs, the contractors are awarded in Cash. SCs can further classified between Pure Service contract and Risk Service contract. It depends upon whether the fees are based on flat rate (Pure) or on profit (Risk). Contractual arrangement is common in developing countries like China, India, Angola, Indonesia etc. The rationale for such system is that the natural wealth is the property of the sovereign state and should therefore be used first and foremost for the benefit and welf are for its citizens. Figure 3- Various Petroleum Fiscal Arrangements [Adapted From Johnston, 1994 Economic Rent The difference between the value of production and the costs to extract is known as economic rent in the petroleum industry (Johnston, 1994). The costs consists of Exploration, Development as well as production costs. The economic rent also refers to the à ¢Ã¢â€š ¬Ã‹Å"excess profits associated with the surplus profit remained after all costs are recovered. It is then this excess profit which is shared between a host government and the petroleum industry. Host governments collect as much economic rent as possible through upstream fiscal instruments namely royalties, taxes, bonuses etc. One of the most challenging and interesting area for examination of fiscal system with regard to collection of economic rent lies within the negotiation process of the fiscal terms, which refer to the agreement between host government and oil companies to explore, develop and produce hydrocarbons. These terms are negotiated in two fundamental types of petroleum fiscal systems (Slatsveen, 2005). The challenge is to how to capture rent when many of the exploration ventures are failures. Thus, the profit margins should be large enough to accommodate these failures. Fiscal Components of the fiscal systems Fiscal instruments are employed to collect economic rent regardless of the classification of the fiscal regime. The concessionary system has at the fundamental level, the following components. Royalty- It is the secure minimum payment based on gross revenue from sale of crude oil and natural gas. Deductibles- They are the operating costs and depreciation of the capitalised assets, amortisation. Tax-It is deducted from the taxable income (Gross Revenue- All deductions). This is generally at the countrys basic corporate tax rate which is higher than the regular income tax. Cost Oil/Cost Petroleum- The exploration, development and operating costs which can be recovered depending on contract terms are known as Cost oil or Cost Petroleum. Profit Oil/Profit Petroleum- The profit remaining after recovering costs and payment of Royalty is known as Profit Oil or Profit Petroleum. It is shared between the host government and the contractor depending on the contract terms. Production Sharing Contracts The production sharing contracts and concessionary system may differ in terms of ownership of the resource, but financially they have the same implications (Johnston, 1994). In this study, we would be focusing on Indian PSC regime as set out in the second objective i.e. Review of Indias NELP regime through examination of bidding evaluation criteria offered under the forthcoming licensing round. India introduced New Exploration Licensing Policy (NELP) in 1997, in order to open the market for private players. There have been seven bidding rounds up to now and about 167 PSCs have been signed till date. The NELP-8 round has also been declared as on April 9, 2009. Government has also released Petroleum Tax Guide (PTG) in 1999 to clarify the Tax implications for the operators and investors. The financial implications of the production sharing contracts can be expected as shown in the figure. Figure 4- Flow Diagram for PSC [Source: Venugopal, 2005] Royalty The royalties are the fixed minimum payment levied on the production of the reserves. It creates an up-front revenue stream which is assessed on volume or value of reserves (Venugopal, 2005). The royalties are often considered a disincentive to investment and are typically only deductible in home jurisdiction. They might cause investment distortions as it leads to payment from the Gross Revenues rather than Net Income, but can give early revenues to the Government as well gives relatively stable incomes to the Government. Four major disincentive effects of royalties It can reduce profitability of a field as the burden of Royalty decreases the contractors take. The pay-back or the recovery of costs can be slower with higher royalty levied. A field viable on pre-tax basis can be made non-viable after royalty deductions. The instances of premature abandonment increases as the royalties are levied on gross revenues. Royalties can be fixed or on the biddable terms. In the Indian PSC regime, the royalties are fixed, levied on the basis of the hydrocarbon type and by on land and offshore areas. However, in the more sophisticated PSCs it can be on the sliding scale of revenues. Cost Oil A portion of produced oil that the  operator  applies on an annual basis to recover defined costs specified by a  production  sharing contract is known as Cost Oil (Schlumberger Oilfield Glossary). The cost oil can be zero to hundred percent and it is often biddable. The revenues remaining after the cost recovery is shared between the contractor and the host government. The cost recovery works in two ways: At the pace of development costs incurred or based on the amount of oil production available for cost recovery. Typically, the slower cost recovery can cause following effects: Might cause investment distortions due to the depreciation rules; the timing of the recovery of investments costs. Due to the discounting and inflationary effect the tax share of the costs is lower than the tax share of incomes. A fiscal regime that allows cost recovery up to 100 percent is favoured by the investors. Profit Oil Under the production sharing contract, the amount of  production remained after deducting cost oil production is divided between the investor and the host government. This remaining production is known as profit oil (Schlumberger Oilfield Glossary). It is biddable and negotiable under the PSCs. The contractors share of profit oil is usually subject to taxation depending on the companys prevailing income tax rate. The contractors generally bid for profit sharing split based on the geological potential of the field. Thus, it is not the governments that always determine the appropriate divisions of the profit; the oil companies help define what the market can bear (Johnston, 1994). The profit oil split is particularly effective when it is applied on an incremental basis on varying field sizes. The profit petroleum is shared between the government and the contractor depending on a Pre-Tax Investment Multiple (PTIM) ratio. PTIM ratio is calculated using the Contractors Cash Flow in the previous year and is determined by dividing the accumulated Contractors Net Cash Income by Accumulated Investment by the Contractors. Such ratio for the profit oil split would ensure the accommodation of unexpected changes in oil prices (Venugopal, 2005). This also ensures that government share is low in initial years when the revenues are less and recovery is slow. As the ratio increases, the share of profit to the government increases. Taxes Taxes are generally levied on the contractors share of profit oil and this is usually at the countrys prevailing corporate tax rates. Taxes are more attractive to investors than the royalties as it is based on the profits unlike the royalties, which are based on the gross revenues. The tax incentive can be definitely more useful for the contractors in the case of discovery and subsequent production. The tax holidays applied in the early years can make a field more viable in terms of present value (Johnston, 1994). Tax holidays represent surplus NPV available in initial field production years. Assumptions 1. The Government share of Profit Petroleum will be calculated for the purpose of fiscal evaluation under three Scenarios of production profile and prices of oil and gas, such as Low, Most likely and High. 2. The block-wise Production profile for computation of Government Share is given . The Production profile are assumed only for the purpose of fiscal evaluation and are not indicative of actual or expected production. 3. Following nine scenarios, based on production profiles and prices, will be considered for evaluation of fiscal package based on the weighted average of Net Present Value (NPV) of Government share of Profit Petroleum under each scenario. 4. Weights will be assigned for NPV of Government Share of Profit Petroleum for the 9 scenarios as under for all types of blocks: 5. The exploration cost and development cost assumed for the purpose of fiscal evaluation is given in Annexure-II. Production cost is assumed at US $ 3 per barrel of oil and oil equivalent gas (O+OEG). The costs are assumed only for the purpose of fiscal evaluation and are not indicative of actual or expected cost. 6. First seven years are assumed for exploration phase for Type S blocks onland blocks (other than frontier area blocks) and shallow water blocks. The Production is assumed to commence from 8th year. For the purpose of evaluation, it is assumed that exploration cost is spread over @ 10%, 10%, 20%, 20%, 20%, 10% and 10% over the 7 year period of exploration phase and development cost is equally spread over in 7th and 8th year. 7. First eight years are assumed for exploration phase for Frontier Area onland blocks and Deep water blocks. The Production is assumed to commence from 9th year. For the purpose of evaluation, it is assumed that exploration cost is spread over @ 10%, 10%, 20%, 20%, 20%, 10%, 5% and 5% over the 8 year period of exploration phase and development cost is equally spread over 8th and 9th year. CHAPTER 3 METHODOLOGY Methodology Overview To accomplish the techno-economic objectives (as below) for the respective upstream project considered by GSPC, an economic based model was developed guided by the literature review discussed. Project 1 being an exploration block MB-OSN-2005/6, was evaluated assuming the evaluation was at the pre-bidding stage and the operator sought to generate block profitability potential through economic analysis. Measuring the Profitability Potential The section deals with examining the profitability potential of an exploration prospect in the block MB-OSN-2005/6. Company needs to determine the profitability potential of this block located in Mumbai Offshore basin. The sensitivity of the Post Tax Net Cash Flow (PTNCF) to variation in Oil prices, Production costs and discount factors in three likely reserve sizes (reserve sizes as given by the DGH) was examined using following method of sensitivity analysis generation (Nath, 2007): A base case is specified through the variable set and compute. The variables are then changed to factor in various scenarios that are likely to occur. The results for change in factor are plotted graphically to analyse the sensitivity of the project with respect to change in each factor. Thus the graphical relation in fiscal system analysis is employed. 1) Discounted Net Cash Flow (Before Tax After Tax) Cash flows are discounted at a certain rate to account for time value of money. The greater the value of à ¢Ã¢â€š ¬Ã‹Å"free net cash flow generated, more profit can be generated from the field. 2) Net Present Value (NPV) NPV is the sum of discounted Net Cash Flows and represents a value which factors in the time value of money. If NPV is positive, the project should be accepted. 3) Internal Rate of Return (IRR) IRR is the discount rate at which the Net Present Value is zero. Internal Rate of return indicates the project efficiency and robustness. If the IRR is higher than the discount rate i.e. opportunity cost of capital, the project should be accepted. If IRR is lower, the project should ordinarily not be considered for further development. 4) Government Take à ¢Ã¢â€š ¬Ã¢â‚¬Å" Sum of the components of government take namely Royalty, Profit Oil and Taxes (Johnston 1994). This shows the impact of the fiscal system on the cash flow of the oil/gas field. Take is represented as a percentage of the total project net cash flow. 5) Payback period à ¢Ã¢â€š ¬Ã¢â‚¬Å" The time until cumulative net cash flow becomes positive. Prospect at a glance Project Name- Hypothetical Development of Block MB-OSN-2005/6 NELP Round- NELP-V Block Name- MB-OSN-2005/6 in the Mumbai Offshore Basin Production reserves- Low Production- 103.4 MMbbl Medium Production- 129.25 MMbbl High Production- 155.10 MMbbl Economic Modelling Economic modelling is carried out considering the fiscal regime prevailing in India under the NELP. The results show the Pre-Tax and Post-Tax Net Cash Flows under different scenarios of Oil Price, Production profiles as well as Production costs. Further analysis is carried out in the subsequent chapters to understand effects of Government take as well as the exogenous variables such Oil Prices, Production Costs and the Production profiles. The cash flow modelling is prepared using the methodology utilised by Venugopal.S (2005). Accordingly a representation of the Cash flow model is given in the following figure. Figure 5- Flow Diagram for Cash Flow Model [Venugopal, 2005] Data used for the modelling The three cases are taken for the production profiles: Low Production, Most likely production and High Production. The total production output is as under: Case 1- Low Production: 103.40 MMbbl Case 2- Most Likely Production: 129.25 MMbbl Case 3- High Production: 155.10 MMbbl The variables in each case are Oil Gas Price and Production Cost. It is assumed that the Oil Gas prices are changing together, i.e. there is a correlation between the prices of the oil gas prices. This is assumed as the gas prices have historically been linked intrinsically to the oil prices .The summary of variables is listed in the table below: Assumptions Oil Prices ($bbl) Oil Price1 50 Oil Price2 80 Oil Price3 100 Gas Prices ($/mcf) Gas Price1 4 Gas Price2 4.5 Gas Price3 7.5 Cost ($mm/well) Cost 1 40 Cost 2 50 Cost 3 70Table 2 Summary of Assumptions Summary of the expenditures The expenditures assumed here are as per the data given by DGH (Directorate General of Hydrocarbon) for the block MB-OSN-2005/6 given in the pre-bidding documents. These are mainly the Exploration Development costs. These costs are summarised as follows: Expenditures Exploration Costs US$MM 194.00 Development Costs US$MM 775.00 The exploration costs are incurred during the first seven years of the project life. These costs are taken according to DGH guidelines. The development costs are incurred in the seventh eighth year of the project. Costs/Year 1 2 3 4 5 6 7 8 Exploration 10% 10% 20% 20% 20% 10% 10% Development 50% 50% The prevailing rate of Royalty has been considered for the calculation of the Royalty paid. The rates of Royalties are as shown in the table. Since, this is a shallow offshore block the corresponding rate has been considered.    Oil Gas Deep water 5% 5% On land 12.5% 10% Shallow Offshore 10% 10% The tranches of Profit sharing is taken according to NELP-V formulae. The profit sharing percentages to be offered were as per the terms negotiated in the PSC of this block signed between GSPC and the Government of India. Profit Sharing Tranches % to GOI PTIM 0 1.5 66% PTIM 1.5 2.0 76% PTIM 2.0 2.5 81% PTIM 2.5 3.0 86% PTIM 3.0 3.5 86% PTIM 3.5 1% Having acquired the necessary information as discussed in 3.1-Part-1, a cash flow model has been appended in Annexure [A] to this report. Results of the economic modelling have been discussed in the subsequent chapter. CHAPTER 4 ANALYSIS INTERPRETATION Analysis Interpretation Summary of results The results from the cash flow model yield the Net Present Value (NPV) which is the sum of all discounted Net cash flows (Before Tax Post Tax). Oil companies use the NPV values to measure the profitability potential of the project. Positive NPV values are considered to render the project economic and therefore accepted for project development. The NPV results under the different scenarios has been shown below and the detailed cash flow mode has been appended in Annexure A Discounting for NPV NPV ($MM) IRR (%)    Nominal Pre-Tax Net Cash Flow 9762.57 35% Pre-Tax Net Cash Flow @ 10% 1958.05 Pre-Tax Net Cash Flow @ 20% 430.89 Pre-Tax Net Cash Flow @ 30% 61.38 Pre-Tax Net Cash Flow @ 40% -36.94 Pre-Tax Net Cash Flow @ 50% -61.57    Nominal Post-Tax Net Cash Flow 3764.52 24% Post-Tax Net Cash Flow @ 10% 692.10 Post-Tax Net Cash Flow @ 20% 80.85 Post-Tax Net Cash Flow @ 30% -55.71 Post-Tax Net Cash Flow @ 40% -81.95 Post-Tax Net Cash Flow @ 50% -80.80    Analysis of Results The results show that the Post Tax Contractor Net Cash Flow (PTNCF) is positive in the medium and high price scenario. The general trend of the NPV can be shown as the chart-1. Chart 1 Post Tax Net Cash Flow The chart shows that the PTNCF increases with each production profile for the similar Oil Gas price and Production costs. Price Sensitivity The above figure shows that the project viability largely depends on the Crude Oil Gas prices. Since the field is having large oil reserves compared to the reserves of Natural gas, the oil price variation becomes critical. The chart-2 shows the Oil price sensitivity. The resultant chart shows that as the production increases, the sensitivity to the oil price increases. This is apparent from the chart as the slope of the curve gets steeper with each production profile i.e. the slope of the curve for the low production is less than the high production profile price sensitivity. This shows that as the production increases the project viability and the revenue is more vulnerable to the price variation. Chart 2 Price Sensitivity Sensitivity for low production The cost sensitivity decreases with the higher production reserves. This is mainly because with higher production profiles, the increase in revenue offsets the loss due to higher costs and vice-versa. This is apparent by the negative slop of the curve and the data point converges as the production cost increases. Chart 3 Sensitivity for case 3 The chart-3 shows the sensitivity with the change in production profile. Discount Rate Sensitivity Each cash flow must factor in the à ¢Ã¢â€š ¬Ã‹Å"time value of money; to know the value of the project in todays money considering the future risks represented by factors such as inflation (increases costs and reduces purchasing power). Discounting is done to factor in this risk element to thereby generate the discounted net cash flows, adjusting for the effects of inflation. Chart-4 shows the NPV value at the various discount rates, plotted at the each of the production profile with base case scenario of Price and cost. The chart shows that the curves of various production profiles diverge as the discount rate for the NPV calculation increases. Chart- 4 Discount Rate Sensitivity IRR (Internal Rate of Return) The internal rate of return (IRR) is the discount rate at which the NPV (Net Present Value) of the project equals to zero. IRR indicates the discount rate below which all investment will be with positive NPV. The results for the IRR are calculated in the above table. Pay-Back Calculation The Pay-back period is defined as the time required by the projects positive net cash flow to recoup initial capital expenditure (Venugopal, 2005). The chart shows that the pay-back period decreases with the increase in the production profile. The chart for payback is shown in the Appendix 5. Effect of Fiscal Components The various fiscal components like Royalty, government share of Profit oil, Taxes and cost recovery affects the project economics. The Post Tax NCF (PTNCF) is the residual left after deducting the above components from the gross revenue. The contractor is therefore more interested in maximizing the PTNCF from the project. It is however, interesting to note how the change in production profile impacts these components. While, it is obvious that the absolute figure increases with the increase in the production reserve, the more interesting notion is the relative variation of each component. Chart 5 Effect of Fiscal Components- Low Production The chart of percentage contribution of each component shows that the share of Profit oil decreases in percentage with the increase in production reserves. This is in-line with the criticism of NELP regime being regressive rather than progressive. Chart 6 Effect of Fiscal Components- Most Likely Production Also, the percentage of government share increases in the later years as the production declines. The faster cost recovery ensures lower risk to the contractor but the net cash flow to the contractor decreases in the later years. Chart 7 Effect of Fiscal Components- High Production CHAPTER 5 CONCLUSION RECOMMENDATION Conclusions Recommendations This report could hopefully draw meaningful conclusions towards determining profitability potential of the block as considered. The authors learning has been enhanced in case of recommending the effects of each parameter on the final contractor Net Cash Flow. The exercise was dealt with analysis and measurement of profitability potential of an exploration block. From the analysis it can be concluded that, the project economics for an exploration prospect is the most sensitive to the oil price. It is also evident that the project seems viable with a reasonably good IRR after multiplying the probability of occurrences of each scenario. The project is highly vulnerable to Oil Price uncertainty as the production increases the project viability and the revenue is more vulnerable to the price variation. The payback period tend to decrease with the increase in the production. The payback period for the high production is quite less. The contactor is interested in increasing the post tax net cash flow. References Alberta Royalty Review Panel. (2007). Our Fare Share. Edmonton: Canadian Ministry of Finance. DGH India. (2009). Model Production Sharing Contract. Retrieved May 15, 2009, from NELP VIII: https://www.nelpviii.com/content/BidApplication/MODEL_PRODUCTION_SHARING_CONTRACT(MPSC).pdf DGH India. (2009, April 9). Notice Inviting Offers. Retrieved April 25, 2009, from NELP VIII: https://www.nelpviii.com/content/BidApplication/NIO_01_05_09.pdf Dias, M. A. (2004). Valuation of exploration and production assets: an overview of real options models. Journal of Petroleum Science Engineering , 44, 93-114. GSPC. (n.d.). Retrieved April 5, 2009, from GSPC Group: Energy for Growth: https://www.gspcgroup.com/gspc.php Johnston, D. (1994). Petroleum Fiscal Systems and Production Sharing Contracts. Oklahoma: Pennwell Books. Khelil, C. (1995, May 15). Public Policy for the Private Sector. Public Policy Journal . Peseran, M. H. (1989). An Economic Analysis of Exploration and Extraction of Oil on the UK Continental Shelf. London: Oxford Institute of Energy Studies. Price Waterhouse Coopers. (2008). India Union Budget 2008 and its implication on Oil Gas Industry. Petrofed. Price Water House Coopers Ltd. Production-Sharing Agreements: An Economic Analysis. (1999, October). Retrieved April 20, 2009, from Oxford Energy Studies: https://www.oxfordenergy.org/pdfs/WPM25.pdf Schlumberger Oilfield Glossary. (n.d.). Retrieved April 25, 2009, from Schlumberger: https://www.glossary.oilfield.slb.com/ Slatsveen, T. (2005). Fiscal Policy- Finding the right Fiscal System. PPM/CCOP Workshop. Beijing: Norweign Petroleum Directorate. Venugopal, S. (2005). The economics of Petroleum Exploration and Development in India. Sydney: School Of Petroleum Engineering, New South Wales University.