Introduction

This training course covers a wide array of economic, legal, accounting, taxation, auditing, budgeting, controlling, planning, information systems, and managerial issues relevant to financial management in the oil and gas sector and petrochemical industries.

The GLOMACS Certificate in Financial Management for Oil and Gas Companies and Petrochemical Industries provides participants with in-depth knowledge of accounting practices specific to the oil industry, along with essential financial analysis and management tools. Attendees will gain insights that can be shared within their teams and across departments.

This course focuses on practical realities and contemporary financial techniques, enabling delegates to communicate effectively with financial professionals both within their organizations and externally, ultimately enhancing their managerial capabilities.

Learning Outcomes

Participants will:

– Understand the nuances of international petroleum accounting standards
– Grasp the fundamentals of cost analysis and control
– Analyze and evaluate financial reports for companies
– Explore various accounting methods for exploration and production firms
– Apply audit methodologies and techniques

 Objectives

This training course aims to equip participants with the necessary financial awareness and practical skills to:

– Analyze income statements, balance sheets, and cash flow statements, and interpret financial ratios in the Oil & Gas and petrochemical sectors
– Recognize the significance of cash flow and Discounted Cash Flow (DCF) in decision-making for these industries
– Develop costing systems like Activity-Based Costing (ABC) for optimal decision-making and shareholder wealth maximization
– Understand the role of managers in the budgeting process and utilize Activity-Based Budgeting (ABB)
– Assess the cost of capital to evaluate different financing sources and optimize financial structure (gearing)
– Effectively manage cash and working capital to reduce costs and enhance cash flow

Training Methodology

This course utilizes interactive methods to facilitate understanding, retention, and application of the material. Participants will engage in case studies specific to the oil and gas sector, brief presentations by the instructor, group exercises, and discussions, culminating in presentations of their findings.

At the end of each day, participants will have the opportunity for one-on-one sessions with the instructor to deepen their understanding. Comprehensive training materials will be provided in both hard and digital formats.

 Organizational Impact

This course directly benefits organizations in the oil and gas sector and petrochemical industries by enhancing employees’ skills. Organizations will experience:

– Improved financial support for operational departments
– More reliable and relevant financial and management information
– Enhanced strategic thinking and performance focus
– Greater efficacy in utilizing financial statements from the company and its partners
– Increased autonomy among finance managers and staff
– Better preparation of staff for greater responsibilities

 Personal Impact

Participants will gain:

– A clearer understanding of their work’s context and significance
– Greater awareness of industry practices, challenges, and solutions
– Increased confidence in completing tasks successfully
– Enhanced self-esteem and motivation in their roles
– Greater job satisfaction from providing quality support to management
– Improved ability to supervise, mentor, and motivate colleagues

 Who Should Attend?

This course is suitable for:

– Corporate Accountants and Financial Controllers
– Treasury Officers and 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 and Financial Essentials in Oil & Gas
– Recent Trends in the Oil & Gas Sector: Price Volatility and Supply/Demand Dynamics
– Understanding the Petrochemical Industry
– Managing Macroeconomic Factors: Interest Rates, Exchange Rates, Oil Prices
– Resources and Reserves
– Key Accounting Issues in Oil & Gas and Petrochemical Sectors:
– Revenue Recognition
– Costs in Acquisition, Exploration, Development, and Production
– Break Even Oil, Cost Oil, and Profit Oil
– Accounting Approaches: “Successful Efforts” vs. “Full Cost” Methods
– IFRS Guidelines for the Oil & Gas Sector

Day 2: Financial Management in Oil & Gas
– Financial Structures in Oil and Gas Companies
– Analyzing Financial Statements:
– Profit and Loss Account (Income Statement)
– Balance Sheet
– Cash Flow Statement and Its Importance
– Measuring Operating and Financial Performance
– Understanding Risk Measurement and Limitations of Ratio Analysis
– Analyzing Annual Reports

Day 3: Costing and Decision-Making in Financial Structure
– Understanding Financial Structure and Costs:
– Cost of Debt and Equity
– Weighted Average Cost of Capital (WACC)
– Optimal Capital Structure
– Costing Concepts:
– Fixed, Variable Costs, and Overheads
– Activity-Based Costing (ABC)
– Expense vs. Inventory Valuation
– Decision-Making Techniques:
– Make vs. Buy
– Shut-down vs. Contribution Decisions
– Product Mix and Limiting Factors
– Decision Trees

 Day 4: Capital Budgeting and Financial Ratio Analysis
– Capital Budgeting Concepts and Processes
– Capital Rationing and Project Ranking
– Accounting for Inflation in Investments
– Budgeting Purposes and Processes
– Activity-Based Budgeting
– Assessing Risk and Uncertainty
– Financial Ratio Analysis and Dupont Analysis for Evaluating ROE
– Evaluating Share Prices and Financial Performance of Leading Firms

 Day 5: Valuation in Oil & Gas and Petrochemical Industries
– Types of Valuation Methods:
– Payback, Net Present Value (NPV), Internal Rate of Return (IRR), and Discounted Payback
– Working Capital Management:
– Understanding Working Capital Requirements
– Managing Working Capital Effectively
– Techniques for Cash Improvement
– Cash Management and Banking Facilities
– Current Practices in Mergers and Acquisitions