Petroleum Enterprise Investment Risk Analysis

Petroleum enterprises have their own characters -high investment-, high output > high risk and long production-cycle. Now, with the changing of the situation home and abroad, the macro market- economy-system has been improving step by step. In addition, petroleum enterprises have changed their single production style into the production and management one. The business sold oil & gas was not the sellers' market any more, which becomes the buyers' market instead. At the same time, these enterprises turn the old guidance which focused on the production into the new one which centred on the economic profits. Because China has been one of the members of WTO, the native petroleum enterprises are facing increasing challenge which come from the solid big foreign petroleum companies. Therefore it is vital that the native enterprises should enhance their international,competition power. At the same time the native enterprises must build up the concept of. investment risk analysis and management and establish risk management system. More over, it becomes one of important contents of deepening economic reform to increase economic profit of investment about petroleum industry on a large scale. So the research of investment risk analysis becomes more and more important.Nowadays, in China, although the investment risk analysis of petroleum enterprises has been developing and perfecting gradually, it still exists many problems. Although there are kinds of viewpoints on the methods of investment risk analysis of petroleum enterprises, many people express doubt about the practicability of these methods. The paper analyses the necessity of the investment risk analysis of Chinese petroleum enterprises in dint of the development about the same business in home and overseas and gives a new method -Monte Carlo simulation method through connecting with general theories of investment risk analysis and basing on analyzing the problems which lie in the investment risk analysis and management and by grounding on original evaluation guideline system of investment risk analysis and decision-making model. The merits are that the method not only embodies uncertainty of risk elements but also makes up the limitation rooted in underestimating influence extent about all of risk elements by combining original Break even analysis and Sensitivity analysis. The method perfects deeply investment risk analysis system and improved the accurateness of investment risk analysis. By giving an example named "Exploiting plan for the west part of LengJia" the article further proves out that Monte Carlo simulation method do make up the decision-making model of investment risk analysis convincingly.Finally the paper summarizes lots of experience in investment risk analysis and management of famous foreign petroleum enterprises and brings forward internal &external strategies which aimed at developing and perfecting the investment risk analysis and management. By using this method decision-makers can get more accurate information and make more scientific decisions and reach a goal of scientific management.