Based On The Oil Construction Investment Project Economic Evaluation And Application Of Eva

At present, China’s economy is on a stage of scientific steady and fast> sustainable development, and oil is a national strategic resource, which is also the "blood" of modern industrial operation. The rapid economic development in China makes the oil and energy supply and demand contradictions increasingly prominent. Also, scientific and sustainable development of the oil industry is very important. In this context, the establishment of a scientific and rational economic evaluation system in oil investment and construction project is of great significance. Economic evaluation of investment projects as one part of a feasibility study, the theories and methods have been matured, and many of them have been widely used. At present, investment decisions of the oil companies’construction investment projects are usually judged by the calculation of internal rate of return, net present value, payback period and other economic evaluation to predict the economic benefits of the project, in order to determine the feasibility of investment. The disadvantage of this indicator system is that after the implementation of the project, it is difficult to make scientific investigation about the performance of the project manager based on this indicator. Thus, the assessment of the performance of a project manager often takes another set of index system, including the profit margin of sales (business) return on invested capital, profits of barrel oil. The mismatching and inconsistent of the indicators of the investment-and-decision-making system and operating-performance system make the enterprise management prone to confusion. The traditional economic evaluation system is not conducive to the leader of investment projects to clearly determine their own investment mistakes as well as solution and direction.Economic Value Added EVA, is also known as economic profit, economic value added. For an investment project, the EVA evaluation system can reflect the developing state of the investment projects and the economic benefits of investment projects during a given period. Firstly, this paper analyzed the shortcomings of the NPV in the construction investment projects in oil, then it discussed the EVA index which is able to measure the project investment decision-making and project management performance in detail. It also investigated the correlation between EVA and the commonly used indicator NPV, and proved the equivalence of the MVA and NPV of the investment decisions of oil construction projects, the equivalence of the standard EVA and post-tax NAV, as well as the relationship between EVA and IRR, payback period. Through the case analysis by a high sulfur content project, it proved the positive role and advantages of EVA in the oil construction project decision-making and performance evaluation and provided suggestions and problems should be paid attention to for the application of the index system in China’s oil project investment decisions.