Finance & Accounting Strategies in the Oil & Gas Industry

Introduction:

This training course focuses on the essential skills and techniques required to enable the participants to make appropriate strategic decisions to maximize profit, reduce costs and financial risks. Given the substantial capital costs, long lead times from exploration to sale and pressure to meet reserve replacement ratios, implementing and managing strategies in Oil & Gas finance and accounting are critical success factors.

In today’s competitive Oil and Gas industry, with volatile oil prices, demand and supply uncertainties, the need to reduce operating costs, whilst maintaining quality and safety, improving returns for investors and company stakeholders, what strategies should companies adopt to ensure sustainable growth?

Targeted Groups:

• Key Personnel in the Oil and Gas Industry
• Accountants & Finance Professionals responsible for financial accounting, treasury, budget preparation and management reporting
• Process and Non-technical professionals who require a more in-depth understanding of strategic issues facing the Oil & Gas sector now and in the future
• Managers involved in making CAPEX decisions
• Bankers and Professionals who work in Energy Lending

Course Objectives:

At the end of this course the participants will be able to:

• Identify & evaluate the challenges facing the Oil & Gas sector now & in the future
• Use skills & techniques to assist with key strategic decisions facing their company
• Recommend appropriate financing decisions & make capital investment decisions
• Advice on methods to eliminate or reduce financial risks facing Oil & Gas companies
• Manage new projects/initiatives effectively, meeting Strategic Aims & Objectives

Targeted Competencies:

• The current and future challenges within the sector
• The strategic decisions facing companies in this challenging environment & the techniques to enable informed strategic decision making
• Financing strategies to determine the optimum capital structure & undertake capital investment appraisal to maximizing shareholder wealth
• Strategies to reduce and/or eliminate financial risk
• Strategies to manage new initiatives to ensure companies met their Strategic Aims & Objectives

Course Content:
Unit 1: Strategic Issues Facing the Oil & Gas Sector:

• The Nature of the Oil & Gas sector
• Current & Future Challenges within the Sector – A question of Supply & Demand
• Volatility: Demand, Energy Prices, Exchange Rates, Interest Rates
• Resources & Reserves and the need for Research & Development
• Financial Issues Impacting on Strategic Development and Growth

Unit 2: Advanced Strategic Decisions:

• Strategic Planning and Decision Making in a Volatile Market
• Analytical Tools to Aid Strategic Planning and Decision Making
• Diversifying Income Streams
• Balancing Upstream, Midstream & Downstream
• Growth Strategies: Exploration, Diversification, Vertical & Horizontal Integration
• Mergers & Acquisitions, Joint Ventures, Production Sharing Agreements & Strategic Alliances

Unit 3: Financing Strategies in the Oil & Gas Sector:

• Sources of Finance
• The Optimum Capital Structure and the Cost of Capital
• Capital Investment Appraisal: NPV, IRR, Modified IRR, Payback
• Financial Forecasting and Analysis in Excel
• Managing Uncertainty of Production, Prices, Capital Costs & Construction Delays
• Modelling Energy Prices in Capital Budgeting

Unit 4: Financial Risk Management Strategies:

• Developing and Implementing a Risk Management Strategy
• Risk Analysis of Oil and Gas Projects using Excel
• Sensitivity Analysis, Sensitivity Charts & Scenario Analysis, Monte Carlo Simulation
• Hedging Energy Prices - Interest Rates & Foreign Exchange Rates using Financial Derivatives
• Accounting for Hedging Under IFRS

Unit 5: Project Management to Meet Strategic Aims & Objectives:

• Estimating Activity Duration & Costs using Statistical and Probability Estimates
• Critical Path and Manpower Planning
• Earned Value Analysis
• Budgetary Control and Variance Analysis
• Implementing & Managing Change, Suspension or Shut Downs