This training aims to provide participants with a clear view of the contractual and economic framework of Exploration & Production in order to apprehend the tools for decision making, financial management and auditing.
Public :
This course is designed for managers from the upstream sector who require a global picture of all the economic, financial and contractual aspects of exploration and production activities.
Level :Knowledge
Prerequisite :
Basic knowledge of accounting and the use of Microsoft Excel.
Course Content
Module 1: UPSTREAM PROJECT ECONOMICS (5 days)
UPSTREAM ECONOMIC ENVIRONMENT
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Duration : 0.5 Day
Economic development of the upstream sector.
Various actors in Exploration-Production and their strategies. Oil markets and prices.
Current Exploration and Production activities.
Levels of investment.
Examples of finding, development and production costs.
CONTRACTUAL & FISCAL ENVIRONMENT
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Duration : 0.5 Day
General principles of oil tax systems.
Legal framework: concessions agreements, production sharing contracts, service contracts.
Impact of various contractual and technical parameters.
Sharing of the economic rent between the State and oil companies. Economic flexibility.
Legal aspects of joint ventures.
Main legal provisions in a Joint Operating Agreement (JOA).
ECONOMIC EVALUATION OF E&P PROJECTS
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Duration : 2 Days
Cost of capital and discount rate, value creation.
Economic criteria for project evaluation: net present value (NPV), internal rate of return (IRR), payback period, etc.
Global profitability analysis, the impact of taxation and inflation on economic indicators.
Case studies: development of an oil field (under concession and production sharing agreements).
IMPACT OF FINANCING ON PROJECT ECONOMICS
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Duration : 1 Day
Financing Oil & Gas projects, project finance and B.O.T. structures.
Various financing plans and debt repayment.
Analysis of equity cash flows, return on equity capital, financial leverage.
Case studies: development of an oil field under concession with specific financing.
RISK ANALYSIS OF E&P PROJECTS
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Duration : 1 Day
Introduction to risk analysis and risk discount rate: sensitivity analysis, Spider and Tornado diagrams.
Probability of success, economic risk analysis in oil exploration.
Economic study of an exploration project using Min, Mode and Max scenarios.
Impact of “ringfencing” and the state participation in the decision-making process.
Case studies: valuation of a decision to acquire information (seismic or drilling) and pricing of an exploration block.
Module 2: UPSTREAM ACCOUNTING & FINANCE (5 days)
ACCOUNTING STANDARS
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Duration : 3 Days
Accounting principles:
Accounting system and principles, accounting plan, financial statements, valuation of assets.
Depreciation and provision, income statement, balance sheet, cash flow statement and cash flow table.
International accounting standards: IFRS and FAS, US GAAP, SEC requirements.
Specific cases: relinquishment and site restoration, deferred taxes, potential badwill of fixed assets, etc.
FINANCIAL MANAGEMENT AND FINANCIAL ANALYSIS
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Duration : 2 Days
Fundamentals of financial analysis:
Value creation and management, earnings and cash flow, free cash flow.
Working capital, capital expenditures, return on assets, cost of capital.
Short term financial management: cash and cash equivalents, short term debts, cash management.
Financial management:
Long term financial resources, risk and return.
Financial securities: bonds and other debt, shares, other tools of corporate financing.
Project financing:
Definition, pros and cons, criteria of choice.
Examples of success and analysis of failures, debt restructuring.
Learning Objectives
Attendees will be able to implement the following skills:
Evaluate all aspects of taxation and the contracts used,
Build advanced economic models for the economic evaluation of projects,
Analyze the economic results and conduct sensitivity analysis,
Incorporate the geological risks and uncertainties in the economic evaluation of projects,
Analyze the main corporate financial statements (profit/loss and balance sheets) issued by oil companies.
Ways & Means
Case studies simulated on computers.
Development of an oil field (under concession and production sharing agreements).
Acceleration of a production project with or without EOR.
LNG plant project with specific financing.
Impact of “ringfencing” and the state participation in the decision making process.
Valuation of a decision to acquire information (seismic or drilling).
Pricing of an exploration block.
Analysis and construction of balance sheets, income statements and key financial statements of an Oil & Gas company.
Examples of petroleum laws & fiscal regimes around the world (Northwestern Europe, North Africa, West Africa, Middle East, Asia-Pacific, etc.).
Learning assessment
Participants will be evaluated during the training through quizzes and case studies.
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Coordinator :IFP Training trainers having expertise and industrial experience in economics, finance and auditing of exploration-production activities.
To French entities : IFP Training is referenced to DataDock ; you may contact your OPCO about potential funding.
Please contact our disabled persons referent to check the accessibility of this training program : referent.handicap@ifptraining.com
IFPT Account
