Method and system to value projects taking into account political risks

• US 20040015376A1
• Filed: 07/03/2002
• Published: 01/22/2004
• Est. Priority Date: 07/03/2002
• Status: Abandoned Application

• Current Assignee: Conocophillips Company (ConocoPhillips)
• Original Assignee: Conoco Incorporated (ConocoPhillips)
• Inventors: Zhu, Kai, El Mallakh, Helen Alise
• Application Number:
  US10/189,936
• Publication Number:
  US 20040015376A1
• Time in Patent Office: Days
• US Class Current: 705/7
• CPC Class Codes: G06Q 10/0635 Risk analysis of enterprise or organisation activities
• CPC Class Codes: G06Q 40/08 Insurance

Abstract

A method and system which deal with the evaluation of the impact of political risk on forecast and value of a project. Key macro political risks are identified and quantified. Project specific political risk events that can result from changes in macro political uncertainties are identified and the probabilities quantified. The relationship of the macro political risks and project specific political risk events are defined. The key project economic parameters susceptible to political uncertainties are identified and the threshold or changes in economic parameters upon the occurrence of a risk event are quantified. The data is assembled into a computer system and a Monte Carlo analysis can be preformed to forecast the probable value of the project taking into account potential political risks.

Claims

1. A system for analyzing the value of a project which can account for the affect of political risks on the value of a project comprising:

means for inputting project economic value parameters into a data processing system;

means for inputting quantifications for categories of macro political risks into a said data processing system;

means for inputting quantifications of conditional probabilities for each project specific political risk event into said data processing system;

means for inputting changes to said project economic value parameters upon occurrence of risk events; and

means for calculating at least one risked project value metric for at least one instance of possible scenarios based upon a predetermined relationship of said macro political risks and said project specific political event risks with one or more project economic value parameters.

2. A system of claim 1 further comprising:

means for quantifying at least one category of said macro country risks;

means for quantifying at least one conditional project manifestation probability of said project specific political risk events; and

means for inputting the economic impact on at least one of said project economic parameter upon occurrence of at least one of said project specific risk events.

3. A system of claim 1 further comprising:

means for applying a probability equation to perform a predetermined number of iterations and to determine a risked project value metric for each iteration project.

4. A system of claim 1 further comprising:

means for applying a probability equation to determine multiple risked project value metrics for multiple iterations and generate a statistical distribution of said risked project value metrics.

5. A system of claim 1 further comprising:

means for selecting and deselecting project specific political risks to be included when determining a risked project value.

6. A system of claim 3 further comprising:

means to generate a statistical average said multiple risked project value metrics.

7. A system of claim 1 further comprising:

means to output changes in said risked project economic value parameters.

8. A system of claim 1 further comprising:

means to store said risked project value metrics.

9. A system of claim 1 further comprising:

means to store said project economic data parameters, said quantifications of categories of macro political risks, and said quantifications of conditional probabilities of manifestation of said projection specific political risk events.

10. A system of claim 6 further comprising:

means to compare unrisked project value metrics with risked project value metrics.

11. A system of claim 1 further comprising:

means to output the changes in said project economic value parameters resulting from the occurrence of a risk event.

12. A system of claim 1 further comprising:

means to quantify project conditional probabilities of manifestation of one or more of said project specific political risks with a multi-variant decision hierarchy scoring system.

13. A computer program for analyzing project value taking into account political risks comprising:

program code to receive input data for project economic value parameters, quantification for at least one category of macro political risk, quantification for at least one conditional probability of project specific political risk, and value changes for the affect of the occurrence of a risk event on one or more project economic value parameters; and

program code to calculate at least one risked project value for at least one instance of possible scenarios based upon a predetermined relationship of said macro political risks and said project specific risks with one or more said project value parameters.

14. A computer program of claim 13 further comprising:

program code to generate various statistical distributions and to calculate a plurality of iterations representing possible scenarios of risk events.

15. A computer program of claim 13 further comprising program code to quantify conditional probabilities of said project specific political risk using a multi-variant scoring system.

16. A method to evaluate project economics taking into account political risks comprising:

inputting into a data processing system economical data relating to a project valuation;

inputting into a data processing system quantification values for macro political risk categories;

inputting into a data processing system quantification values for project specific risk events;

inputting into a data processing system economic variances which occur when a risk event occurs; and

calculating the project value of at least one iteration of possible risk scenarios based upon a predetermined relationship of said macro political risks and said project specific risk events.

17. A method of claim 16 further comprising the outputting of said project value of at least one iteration of possible risk scenarios.

18. A method of claim 17 further comprising the storing of the inputted data and the calculated project values for various scenarios.

19. A method of claim 16 further comprising deselecting one or more of said project specific risk events from inclusion in calculating said project value to perform a sensitivity analysis of the project value to one or more of said project specific risk events.

23. A computer readable medium comprising encoded instructions for causing a computer to function according to claim 16.

20. A computer system for analyzing the value of a project which can account for the affect of political risks on the value of a project comprising:

one or more computer based machines; and

a computer program running on at least one of said computer-based machines, wherein said program receives data of the quantification of macro political risk categories, quantification of conditional probabilities of project specific risk events, baseline project economic data, project economic data associated with the occurrence of the occurrence of said project specific risk events, data to perform a probability analysis, and wherein said program can compute a predetermined number of iterations determining which risk events occurred and a project value for each of said iterations.

21. A computer system of claim 20 further wherein said computer program also receives data concerning the timing of different project phases, associates one or more of said macro political risks and project specific risk events with one or more said project phases.

22. A computer system of claim 20 further wherein said computer program also allows for the selection and deselection of said project specific risk events for inclusion in the calculation of said project value.

24. A system for analyzing the value of a project which can account for the affect of political risks on the value of a project comprising:

means for inputting project economic value parameters into a data processing system;

means for inputting quantifications of probalilities for the occurrence of categories of macro political risks for each defined sub period of the project into said data processing system;

means for inputting quantifications of conditional project manifestation probabilities for project specific political risks into said data processing system;

means for computing aggregate probalities of each project specific political risk for each sub-period of the project from said quantifications of probalilities for the occurrence of categories of macro political risks for each defined sub peiriod of the project and said quantifications of conditional project manifestation probabilities for project specific political risks;

means for inputting changes to said project economic value parameters upon occurrence of project specific political risk events;

means for generating at least one random number to generate an iteration for each random number generated to simulate one possible scenario of possible events,

means to determine the occurrence or non-occurrence of each of said project specific political risks events for each said iteration; and

means to calculate a risked project value metric for each said iteration resutling from said changes to said project economic value parameters upon occurrence of project specific political risk events by the occurrence or non-occurrence of each of said project specific political risks events for said iteration.

25. A system of claim 24 further comprising:

means to calculate on overall risked project value by from statictical analysis of all said risked project value metrics.

26. A system of claim 24 further comprising:

means to select and deselect the occurrence one of more of said project specific political risks from inclusion in the calculation of said risked project value metric.

27. A system for generating the simulation of possible senarios of risk events comprising:

means for inputting quantifications of probalilities for the occurrence of categories of macro political risks for each defined sub period of a project into a data processing system;

means for inputting quantifications of conditional project manifestation probabilities for project specific political risks into said data processing system;

means for computing aggregate probalities of each project specific political risk for each sub-period of the project from said quantifications of probalilities for the occurrence of categories of macro political risks for each defined sub peiriod of the project and said quantifications of conditional project manifestation probabilities for project specific political risks;

means for generating at least one random number to generate an iteration for each random number generated to simulate one possible scenario of possible events, means to determine the occurrence or non-occurrence of each of said project specific political risks events for each said iteration; and

means to generate flags indicating the occurrence or non-occurrence of each of said project specific political risks events for said iteration.

28. A system of claim 27 further comprising:

means to select and deselect the occurrence one of more of said project specific political risks from inclusion in the generation of said flags.