PetroVR Portfolio

Portfolio Overview

PetroVR Portfolio allows you to combine and manipulate results from different PetroVR models into portfolios. Portfolio analysis in PetroVR is dynamic, since it updates the results from the economic models before performing its own calculations.

The most basic application of rolling up projects into portfolios is the possibility to define categories and groups that can be analyzed separately - at the regional level, per country, per business unit or field, etc. The results of these can then be aggregated and presented in graph form, exported in reports for further study, combined with external data by means of user variables, etc. By varying project-specific inputs such as start date, working interest or even the inclusion of a project in the portfolio, it is possible to evaluate project impact on overall cash flows.

At a more advanced level, the tools of modern portfolio theory provided by PetroVR Portfolio can be applied to macro-investment analysis to evaluate the impact of investment diversification. This is done by integrating project risk and uncertainty information in probabilistic calculations at the portfolio level, adding portfolio-specific constraints and probabilistic data. Efficient Frontier allows an overview of possible combinations of projects, plotting portfolio NPV (or cumulative production) against risk level.

A third possible use of Portfolio is that of comparing different scenarios of a given project in the larger context of a company portfolio. Very often the best way to find out what the best strategy is for a particular development is to study each strategy's contribution to the overall business unit, by integrating its expenses and production profiles in the general picture.

PetroVR Portfolio requires a specific license. Please contact the PetroVR Help Desk for more information (see Support and Version Upgrading).

Creating and Calculating a Portfolio

Typical steps for creating a portfolio of projects from scratch could include:

Create a portfolio model.
Select the indicators for this portfolio in the Definition Tab (Portfolio) of the root node.
Add results from Plan or Scenarios projects and arrange them in portfolios; see Editing options in the Portfolio window.
For each model added, map the necessary variables from its Definition Tab (Portfolio Project). There you can also adjust other variables such as the Start Year or the Working Interest.
When projects are complete, you can check the mapping in the Graphs Tab (Portfolio)., and how projects are aggregated in the Graphs Tab (Portfolio).
Then you can enter constraints and notifications at project level in each project's Definition Tab (Portfolio Project), and also at portfolio level in each portfolio's tab.
User-Defined Variables can be added at this stage for further calculations.
At this point the portfolio can be executed using deterministic results, or you can execute Monte Carlo on Portfolio for probabilistic results.
The Efficient Frontier can also be executed and analyzed at this point.

PetroVR Portfolio can combine projects with any simulation span and reporting periodicity (see General Tab). In order to produce unified results, however, it generates yearly reports, making the necessary changes to model results with a different (lower) periodicity.

It is not necessary to save a portfolio project to calculate, but you need to save it in order to run Monte Carlo.

Editing Options in the Portfolio Window

The Portfolio window comprises a Tree View with all the portfolios and projects included in the current model, and a series of tabs for editing and viewing these objects.

The following options are available in the Edit Menu and the context (right-click) menu on portfolio nodes:

New Portfolio: Add a new subordinate portfolio to the currently selected portfolio.
Add Project: Add one or more projects in the currently selected portfolio. Projects are represented by their result files, either from PetroVR Plan (.rlt), Scenarios (.scn.rlt) or Contracts (act.rlt).
Recalculate all projects: Recalculate all projects in the currently selected portfolio using the economic models selected in the Files Tab (Portfolio).
Reload all result files: Re-read the result data for all projects, to ensure that changes made to Plan models made while the portfolio is open are included.
EnableDisable Net Interest: (Only in root node) Define Net Interest in addition to Working Interest. By default only Working Interest is activated. If Net Interest is not manually activated, Working Interest takes into account OpEx, CapEx and production. When both types of interest are activated, Working Interest takes into account OpEx and CapEx values, while Net Interest considers production.

Options shared by portfolio and project nodes are:

Rename: Rename the currently selected project or portfolio.
Remove: Permanently remove the currently selected project or portfolio.
Ignore: Temporarily disable / enable the currently selected project or portfolio. Ignored projects/portfolios are grayed out.

Options specific to project nodes are:

Recalculate project: Recalculate only the currently selected project using the economic model selected in the Files tab.
Reload result file: Re-read the result data for the currently selected project, to ensure that changes made to the Plan model made while the portfolio is open are included.
Change link: Select a new result data file link for the currently selected project. The newly selected project will keep all settings already defined - mapping, economic file, user variables etc.
Edit in PetroVR: Edit the currently selected project in PetroVR Plan or Scenarios.
Browse results: Browse the result data for the currently selected project in the Results Window.

The Reload result file and Reload all result files options do not simulate Plan projects but read the saved .rlt files from disk. This means that you need to simulate the model from Plan in order that Portfolio takes into account your changes. Note also that if different economic models are selected in Plan and Portfolio you will have to Recalculate project / Recalculate all projects to make sure the portfolio uses the economic model selected in the Files tab.