Oil and gas budgeting, economics and finance for non-financial managers
- Available in-house
This 3-day training course provides participants with insight and understanding of the budgeting process and the key planning and forecasting techniques that should be used to successfully build and manage reliable budgets. This enables fit-for-purpose budgets and business plans to be developed that robustly model complex, but realistic, situations in a flexible and auditable manner.
About this course:
All organisations operating in the oil and gas sector must regularly develop, manage and adjust budgets and forecasts to reflect changing market conditions and their competitive performance. To do this successfully and establish credible budgets and business plans that function as useful and user-friendly management tools to monitor and help improve performance, it pays to be aware of and incorporate best budgeting, planning and forecasting practices.
This course provides participants with insight and understanding of the budgeting process and the key planning and forecasting techniques that should be used to successfully build and manage reliable budgets. This enables fit-for-purpose budgets and business plans to be developed that robustly model complex, but realistic, situations in a flexible and auditable manner.
Who should take this course?
This course is designed for technical, planning and financial specialists and others with budget and planning responsibilities. The course avoids technical and financial jargon and is therefore also suitable for non-technical and non-financial participants.Whether you are an international oil company (IOC) a national oil company (NOC or a service provider to such companies, budgeting, planning and forecasting are essential facets of business management that need to be mastered and understood in the specific context of the oil and gas sector.
Day 1 - Strategic Dimensions to Budgeting and Planning
- Budgeting as part of the strategic and business planning cycles
- Setting budget targets and goals: balanced scorecards
- Scenario planning for uncertain futures
- Planning requirements along the oil and gas supply chains
- Budget responsibility centres
- Zero-based and performance budgeting versus incremental budgeting
- Activity-based budgeting
- Contractual and fiscal influences on budgeting requirements
- Production sharing agreement (PSA) components
- Joint ventures and mineral interest agreements
- Joint operating agreements and joint venture budgets
- Authorisations for expenditure (AFE)
- Procurement, invoicing, payment cycle and cost control
- Essential financial considerations: balance sheets, profit, loss, cash flow
- Accounting and audit procedures
Day 2 - Forecasting and Benchmarking
- Estimating and forecasting requirements
- Most forecasts are wrong! But many can still be useful
- Factoring in uncertainty: risk and opportunity
- Benchmarking and gap analysis
- Financial key performance indicators (KPIs) favored by the industry
- Non-financial KPIs favored by the industry
- Safety, environmental and stakeholder KPIs
- Budgeting for downtime: planned and unplanned
- Corporate, social responsibility (CSR) and community requirements
- Triple bottom line and sustainability criteria
- Life cycle analysis (LCA), efficiency and emissions
- Capitalisation and leveraging debt and equity
- Depreciation considerations
- Consolidating budgets for multiple assets in a portfolio
Day 3 – Production, Cost and Price Factors
- Petroleum-volume accounting
- Forecasting production profiles and decline curves
- Lifting and billing
- Incorporating a range of cost and price forecasts
- Nominal and real values
- Flow of funds through a generic oil and gas company
- Capital and operating cost components
- Contractual framework and project execution sequence
- Milestone monitoring
- Achievement analysis and earned value concepts
- Revenue and profit margin planning
- Netback price calculation
- Working capital requirements
- Budget analysis and calculating variances using spreadsheets
- Aids to help present complex budgets in digestible terms
- Reports regulating budgetary performance
Dr David A. Wood B.Sc. Ph.D
Dr. Wood is an experienced consultant, with more than 30 years of international oil and gas experience, and provides technical, fiscal and contractual advice, technical and management training to a wide range of oil, gas and energy entities. He has extensive, economic, financial, fiscal operations, project, risk and strategic management experience with many international energy organizations and assets.
Industry experience includes Phillips Petroleum, Amoco (Africa, Europe & UK) and Canadian independents (South America, Africa, Middle & Far East) with three years based in Colombia and four years based in Dubai. From 1993 to 1998 he was he was UK Managing Director for Lundin Oil & then Morrison Petroleum responsible for a broad portfolio of assets and a staff of more than 100.
For the past decade he has worked as an independent international consultant and expert witness. He has published an extensive body of work on diverse energy related topics including: the international energy markets, performance modelling of fiscal designs, petroleum economic analysis, enterprise risk & portfolio simulation, LNG, GTL and gas supply, deep-water exploration and production techniques, corporate performance, portfolio and strategy management, mergers & acquisitions, negotiations & project management.
He is actively involved in diverse professional training, research, publication and development programmes. He is a member of the Energy Institute (MEI) and the Petroleum Exploration Society of Great Britain and associate editor of the Journal of Natural Gas Science & Engineering.
- Training Team
- +44 (0)20 7467 7178