An Intensive 10-day Training Course
Upstream Economics and Management
Risk and Uncertainty Assessment,
Valuations, Oil & Gas Accounting
Course Introduction
The business of upstream oil & gas industry is a complex process that involves multidisciplinary participation. The process of upstream oil and gas costs several hundreds of millions of dollars to the companies. Because of the capital-intensive nature of upstream investments, every required process is challenged by its economic impact or benefits to the company and stakeholders. The techniques applied in upstream business and processes in their selection criteria are challenging and require considerations of economic environment.
This 10-day training course provides the delegates with insights related to the upstream oil & gas business including the assessment of risk and uncertainty and relevant accounting standards based on International Financial Reporting Standards (IFRS). The course will equip the delegates with necessary skills and knowledge of exploration and production projects and financing and investments. The delegates will learn modern techniques relevant when choosing the best alternative project from economic point of view and evaluating various investment opportunities.
This Oxford Management Centre training course will highlight:
- Application techniques/approach of the economics analysis in the Oil & Gas industry
- Petroleum related project evaluation methods
- Assessment of the uncertainties and risk of the project
- Preparation of Financial Statements consistent with IFRS
- Relevant skills of evaluation and performance measurement
- Efficient Planning, Controlling, and Recording of an audit assignment
Modules
This course is split in two modules:
Module 1: Petroleum Project Economics & Risk Analysis
Module 2: Upstream Petroleum Accounting
Each module is structured and can be taken as a stand-alone training course; however, delegates will maximise their benefits by taking Module 1 and 2 back-to-back as a 2-week training course.
Objectives
By the end of this training course, participants will be able to:
- Understand various economic terms used in the Oil & Gas industry
- Develop economic models of various petroleum fiscal regimes
- Evaluating and quantifying risks and uncertainties
- Carrying out a comprehensive economic evaluation for petroleum related project including risk and sensitivity analysis.
- Contribute to the decision-making process for any petroleum related project
- Understanding of the accounting and auditing standards, policies and practices used by Upstream Petroleum companies
- Improve relevance and reliability of financial reports to better meet the needs of users
- Review, evaluate, and use publicly available information for benchmarking the business performance
Training Methodology
This Upstream Economic and Management training course will be delivered using various proven learning and teaching techniques. The Training methodology includes the use of case studies, group work and interactive exercises and videos relevant to the training. The training is designed to ensure delegates leave with transferable skills as well as up-to-date knowledge of Upstream Economic and Management.
Organisational Impact
By sending delegates on this course, your organization will benefit by:
- Participants will learn about the application/implementation of economic valuation and risk assessment processes in the global Oil & Gas industry
- Identify and analyse the risk involved in a petroleum related project
- Recognize the uses of options in the ranking criteria to select and execute the high profitable projects
- Insights of the influencing parameters for oil and gas field developments
- Providing effective finance support for front-line departments
- Relevance and reliability of management and financial information
- Effective use of financial statements of the company
Personal Impact
By attending this training course, you will:
- Learn to construct a project cashflow model
- Gain the operational decision-making techniques under risks and uncertainties
- Identifying the uncertainties in petroleum related project and how to manage them effectively
- Awareness and ins-sight about influential parameters in an oil and gas field development plan
- Greater insight or awareness of industry practices, problems, and solutions
- Increased self-confidence and motivation at work
- Greater job satisfaction in providing quality and excellent support to management
Who Should Attend?
This training course is suitable to a wide range of professionals but will greatly benefit:
- Oil & Gas Field Engineers
- Oil & Gas Managers
- Oil & Gas Auditors
- Oil & Gas Planners
- Financial Analysts
- Project Management Professionals
- Corporate Accountants, Financial Controllers, Treasury Officers, Management Accountants
- Finance Staff in General Accounting, Payables, Receivables, Inventory, Fixed Assets, etc.
- Joint Venture Accountants and Auditors
- Government Regulators and Auditors
Course Outline
Module 1: Petroleum Project Economics & Risk Analysis
Day 1
Cash-flow Analysis
- Familiarization with Economic terms
- Setting up Cash-flow Calculation
- Depreciation Methods
- Loss Carry Forwards
- Inflation
- Nominal & Real Cash-flow
- Sunk Costs
- Project Financing
Day 2
Economic Indicators
- Economic Indicators Definitions
- Present Value Concept
- Discount Factor
- Net Present Value
- Internal Rate of Return
- Effect of Project Delay
- Payback Period
- Profit / Investment Ratio
- Incremental Projects
Day 3
Risks and Uncertainties
- Risk & Uncertainty
- Expected Value Concept
- Decision Tree Analysis
- Farm-out Decision
- Probability Analysis
- Sensitivity Analysis
- Probability Distribution
- Monte Carlo Simulation
Day 4
Setting up Spreadsheet Calculation
- Introduction to Spreadsheet Calculation
- Simple Cash-flow using Excel
- NPV Calculations
- Application of Economic Indicators
- Class Discussion
Day 5
Setting up Oil Field Development Model
- Setting up an Integrated Economic Model of a Typical Oil Field Development
- Project Sensitivity Analysis for the Selected Model
- Introduction to Russell Field Model
- Final Remarks
Module 2: Upstream Petroleum Accounting
Day 6
Major Accounting & Auditing Issues in the Upstream Petroleum Sector
- The latest Accounting & Auditing Issues facing the sector
- The impact of commodity prices, currency & interest rate fluctuations and political and environmental developments
- The impact of financial and accounting issues on Strategic Development and Growth within the sector
- The Annual Reports & Financial Statements of leading international Petroleum companies
- An Overview of IFRS in relation to Upstream Oil & Gas Accounting
- The Role of Auditing
Day 7
Accounting for Revenue & Costs in the Upstream Petroleum Sector
- Revenue Recognition & IFRS 15: Revenue from Contracts with Customers
- Costs in Acquisition, Exploration, Development and Production
- IFRS 6: Exploration for and Evaluation of Mineral Assets
- Accounting Approaches - The "Successful Efforts" (SE) Method or the "Full Cost" (FC) Method
- Break Even Oil, Cost Oil & Profit Oil
- Evaluating Profitability of leading international Oil & Gas companies
Day 8
Accounting for Assets in the Upstream Petroleum Sector
- Reserves & Resources
- IAS 16: Property, Plant and Equipment
- Depletion, Depreciation & Amortization (“DD&A”)
- IAS 36: Impairment of Assets
- IAS 37 – 39 Provisions, Contingent Liabilities and Contingent Assets; Intangible Assets and Financial Instruments
- Evaluating the Assets & Reserves of leading international Petroleum companies
Day 9
Creative Accounting, Corporate Governance & Auditing
- Creative Accounting
- Corporate Governance
- Published Financial Statements
- The Role of the Board & Audit Committee
- External Auditing - Reporting to investors in the Oil & Gas industry
- Internal Auditing - Defining and Developing the Internal Audit Process
Day 10
The Internal Audit Function
- Establishing the Roles & Staff within the Internal Audit Department
- The Various Types of Audits
- Planning & Commencing Internal Audit Examinations
- Controls & Substantive Tests
- Communicating Audit Findings
- The Audit Exit Conference Meeting & Post-Audit Reviews
Certificate
Oxford Management Centre Certificate will be provided to delegates who successfully completed the training course.
In association with
