Financial Management for the Oil & Gas Industry

INTRODUCTION
This 10-day Financial Management Workshop provides participants with the knowledge and skills necessary to effectively control costs, prepare, manage, and control budgets in the Oil & Gas industry. It offers solutions to the strategic challenges facing the industry, recommending sustainable growth strategies while ensuring efficient cost control. Additionally, participants will gain the ability to prepare, understand, and evaluate financial accounts specific to the Oil & Gas sector.

This training course will cover:

• A comprehensive understanding of financial accounting, costing, and budgeting in the Oil & Gas industry, focusing on leading international practices.

• Examination and evaluation of the latest techniques.

• Skills development through interactive sessions.

• In-depth discussions on strategic and operational challenges currently facing the Oil & Gas industry.

The 10-day training course is divided into two modules, as detailed below:

Module 1 - Budgeting & Cost Control for the Oil & Gas Industry

Module 2 - Finance & Accounting for the Oil & Gas Industry

While each module can be attended separately as a 5-day training course, participants are encouraged to attend both Module 1 and Module 2 for an optimal training outcome.

TRAINING OBJECTIVES

By completing this 10-day Financial Management Workshop, participants will be able to:

• Understand the major risks affecting the Oil & Gas sector, including the impact of oil price volatility.

• Evaluate capital investment proposals, including financing decisions.

• Prepare and evaluate financial statements in accordance with International Financial Reporting Standards (IFRS).

• Effectively measure and control costs in a competitive environment.

• Prepare, manage, and control budgets specific to the Oil & Gas industry to make informed decisions, ensuring growth, profitability, and risk reduction.

• Recommend innovative hedging strategies used by leading international companies to manage budgets effectively and control risks.

WHO SHOULD ATTEND?

This workshop is designed for professionals working or aspiring to work in the Oil & Gas industry. It is particularly beneficial for:

• Individuals responsible for finance and budgeting.

• Professionals involved in making or contributing to capital and budget decisions.

• Those seeking a deeper understanding of financial accounting, budgeting, and cost control.

• Department heads with direct finance, accounting, and budgeting responsibilities.

• Decision-makers relying on financial budgets.

TRAINING APPROACH

This training course uses various teaching methods to ensure effective learning, reinforce understanding, develop practical skills, and promote critical information evaluation. The training sessions maintain interest through a variety of formats, including:

• Real-world Oil & Gas case studies showcasing practical applications of each topic.

• Extracts from annual reports of international Oil & Gas companies.

• Discussions addressing relevant issues raised by participants.

• Illustrated presentations of Oil & Gas accounting issues, focusing on recent events and current strategic challenges facing companies.

TRAINING OUTLINE

Day 1: The Case for Budgeting and Cost Control in the Oil & Gas Industry

• Oil Price Volatility – Causes and Impact

• Major Costs of Acquisition, Exploration, Production, and Development

• Cost Oil and Profit Oil

• The Cost Curve of the Oil Market

• Controlling Gross Margins and Net Margins

• Managing National Fiscal Budgets

Day 2: Finding Strategic Solutions to Cost Control

• Re-assessing the Strategic Plan in Light of Recent Developments

• The Need for Growth While Managing Costs

• Managing Working Capital and Cash Flow

• Evaluating and Managing Capital Projects

• Joint Ventures, Mergers, and Acquisitions as Solutions and Growth Opportunities

• Finance Solutions to Growing Costs and Oil Price Volatility

Day 3: Measuring and Controlling Costs

• Cost Classification and Cost Behavior

• Job Process Costing; Batch Costing, and Activity-Based Costing

• Statistical Estimates of Costs

• Controlling Fixed and Variable Costs

• Earned Value Management

• Variance Analysis

Day 4: Budgeting in the Oil & Gas Industry

• The Benefits and Limitations of Budgeting

• The Essential Features and Types of Budgets

• Preparing Forecasts and Budgets in a Volatile Oil & Gas Industry

• Using Budgets as a Management Tool

• Sensitivity; What-if and Break-Even Analysis

• Managing and Controlling Budgets

Day 5: Hedging Costs to Manage the Budget

• Defining Hedging and Identifying Costs/Risks to Hedge

• Determining the Hedging Strategy

• Hedging Oil Price Volatility

• Hedging Exchange Rate Risk

• Hedging Interest Rate Risk

• Controlling the Hedge to Avoid Speculation

Day 6: Financing Growth and Capital Projects

• The Business and Financial Environment

• Risks Facing the Oil & Gas Industry

• Identifying Growth Opportunities

• Financing Growth via Equity, Debt, and Alternative Sources

• Evaluating Capital Investment Using Payback, ARR, NPV, and IRR

• Capital Rationing – Internal and External

Day 7: Accounting In The Oil & Gas Industry

• The Accounting System

• Understanding the Annual Report

• Preparing Financial Statements in Accordance with IFRS

• IAS 18: Revenue and IFRS 17 Revenue from Contracts with Customers

• IFRS 6: Exploration for and Evaluation of Mineral Assets

• Accounting Approaches – The “Successful Efforts” (SE) Method or the “Full Cost” (FC) Method

Day 8: Accounting for Reserves, Resources and Assets

• Resources & Reserves – Size and Importance

• Reserve Classification and Reserve Quantity Disclosures

• Accounting for Assets and Relevant IFRS Requirements: IAS 16, 36, 37, 38, and 39

• Depreciation, Depletion, and Amortisation (DD&A)

• Ceiling or Impairment Tests

• Decommissioning, Removal, and Restoration of Assets

Day 9: Business Combinations, Joint Arrangements, and Production Sharing Agreements

• The Need for Cooperation in a Capital-Intensive Industry

• IFRS 3 Business Combinations

• IFRS 10 Preparing and Presenting Consolidated Statements

• IFRS 11 Joint Arrangements, Joint Operations, and Joint Ventures

• Production Sharing Agreements

• Revenue, Cost, Cashflow, and Reserve Implications

Day 10: Financial Analysis to Evaluate Performance

Certificate of Completion: Upon successful completion of the course, participants will receive a Certificate of Completion from Al-Majd Pathways Centre (APC).