Certificate in Financial Management for Oil and Gas Companies & Petrochemical Industries

Introduction

When the training course addresses a number of economic, legal, accounting, taxation, auditing, budgeting, controlling, planning, information system, managerial, and strategic planning issues in a context, it is our Financial Management course. This Certification training course in Financial Management for Oil and Gas Companies & Petrochemical industries provides deeper knowledge of accounting in the oil industry and to introduce the tools of financial analysis and management. Participants in this certification training course will be provided with knowledge that can be shared amongst their own colleagues, and with other departments.

This Certification training course in Financial Management for Oil and Gas Companies & Petrochemical Industries will introduce the practical realities of today’s world, and the understanding of the various financial techniques available that will enable delegates to communicate better with financial professionals, within and external to their organization, and to become more effective managers.

Specifically, you will learn to:

• Appreciate the specificities of the international petroleum accounting standards
• Define the fundamentals of cost analysis and control
• Analyze and review the financial report of a company
• Review alternative methods of accounting for exploration and production companies
• Use the methodology and techniques of audit

Objectives

This Certification training course will give participants the required level of financial awareness and practical application, by enabling them to:

• Analyze the profit and loss account (income statement), balance sheet, and cash flow statement, and use ratios to interpret financial statements of the Oil & Gas sector and petrochemical industry
• Appreciate the significant importance of cash flow (rather than profit) and Discounted Cash Flow (DCF) in Oil & Gas companies and petrochemical industries
• Develop costing systems such as Activity-Based Costing (ABC) for optimal decision-making to maximize shareholder wealth
• Appreciate the role of managers in the budget process and the use of Activity Based Budgeting (ABB)
• Determine the cost of capital to evaluate alternative sources of financing and optimal financial structure (gearing)
• Effectively manage cash and working capital to reduce costs and improve cash flow in Oil & Gas companies and the petrochemical industry

Training Methodology

This is an interactive course. There will be open question and answer sessions, regular group exercises and activities, videos, case studies, and presentations on best practices. Participants will have the opportunity to share with the facilitator and other participants on what works well and not so well for them, as well as work on issues from their own organizations. The online course is conducted online using MS-Teams/ClickMeeting.

Who Should Attend?

• Corporate Accountants, Financial Controllers, Treasury Officers, Management Accountants
• Finance Staff in General Accounting, Payables, Receivables, Inventory, Fixed Assets, etc.
• Joint Venture Accountants and Auditors
• External, Financial and Internal Auditors
• Government Regulators and Auditors
• Financial and Investment Analysts

Course Outline

DAY 1: Overview of Accounting & Financial Essential in Oil & Gas Sector and Petrochemical Industry

• Latest Events in the Oil & Gas Sector - price volatility and supply & demand changes

• The Nature of the Petrochemical Industries

• Managing the Macro-economic Factors, e.g. interest rates, exchange rates, oil prices

• Resources & Reserves

Major Accounting Issues in the Oil & Gas Sector and Petrochemical Industry

• Revenue Recognition

• Costs in Acquisition, Exploration, Development, and Production of New Oil or Natural Gas Reserves

• Break-Even Oil, Cost Oil & Profit Oil

• Accounting Approaches - The "Successful Efforts" (SE) Method or the "Full Cost" (FC) Method

• IFRS in Relation to the Oil & Gas Sector and Petrochemical Industry

DAY 2: Financial Management in the Oil & Gas Sector and Petrochemical Industry

• Oil and Gas Company Financial

• Financial Statement Analysis in the Oil & Gas Sector and Petrochemical Industry

• Profit and Loss Account (income statement)

• Balance Sheet

• Cashflow Statement and Its Importance

• Measurement of Operating Performance

• Measures of Financial Performance and Financial Position

• Risk Measurement

• Limitations of Ratio Analysis

• Annual Reports Analysis

DAY 3: Financial Structure Costing and Decision-Making 

• Financial Structure

  • Cost of Debt

  • Cost of Equity

  • Weighted Average Cost of Capital (WACC)

  • Optimal Capital Structure

• Costing

  • Fixed Costs, Variable Costs, and Overheads

  • Overhead Allocation, Absorption and the Use of Activity Based Costing (ABC)

  • Expenses vs. Inventory (stock valuation)

  • Contribution Compared with Profit

• Decision-Making

  • Make vs. Buy Decisions

  • Shut-down or Contribution Decisions

  • Product Mix Decisions and Limiting Factors

  • Decisions Trees

DAY 4:  Capital Budgeting & Financial Ratio Analysis 

• Capital Budgeting

  • Capital Rationing

  • Ranking Investment Projects

  • Inflation and Investment

  • Using Expected Values and Standard Deviations to Make Decisions

  • Purposes of Budgeting

  • The Budget Process

  • Activity-based Budgeting

  • Uncertainty and Risk – worst and best outcomes

  • Maximin and Minimax Regret Rules

• Financial Ratio Analysis

  • Types of Ratios

  • Dupont Analysis – Evaluating and Improving Return on Equity (ROE)

  • Evaluation of Share Price and Investment Performance

  • Evaluating the Financial Performance of Leading International Companies in the Sector

DAY 5:  Valuation of Oil & Gas Company and Petrochemical Industry

• Types of Valuation Methods

• Payback

• Net Present Value

• Internal Rate of Return

• Discounted Payback

Working Capital Management and Cash Improvement 

• Working Capital and Working Capital Requirement

• Managing Working Capital

• Cash Improvement Techniques

• Cash Management and the Banking Facilities

• Mergers and Acquisitions Practices Today