INTRODUCTION

The Oil and Gas industry plays a crucial role in driving the global economy. This sector is diverse, technically intricate, and highly capital-intensive, often facing significant risks and uncertainties. Today’s oil companies are navigating increased complexity and competition. Key activities such as purchasing, sales, marketing, trading, and risk management are vital components of the hydrocarbon value chain, making it essential for managers and industry leaders to remain informed and proactive.

This 5-day accelerated training course on Oil Price Volatility and Risk Management is designed to provide delegates with a comprehensive understanding of crude oil and refined products, biofuel markets, associated risks, and the legal and regulatory landscape of international crude oil trading. Participants will explore the essential engineering practices across exploration, extraction, refining, global supply, reserves, production, and trade flows, gaining insights into managing the inherent risks and uncertainties. The course will also cover strategies for price risk management using financial derivatives and techniques.

Key Focus Areas:
– Essential practices in exploration, production, processing, and transportation of crude oil
– Success factors in the international sales, marketing, and trading of crude oil and refined products
– Logistics of global transit, including pipelines, storage, and distribution
– Understanding pricing dynamics and benchmarks in global markets for crude oil, refined products, and biofuels
– Price-risk management benefits from hedging instruments such as futures, forwards, swaps, and options

 Objectives
This training course aims to provide delegates with a comprehensive overview of the global energy landscape, focusing on fossil fuels, including crude oil, refined products, natural gas, LNG, and biofuels. Participants will examine supply-demand dynamics, price volatility, and geopolitical factors affecting the industry. The course will emphasize the importance of sales, marketing, trading, and particularly price risk management to mitigate corporate risks.

By the end of this course, participants will be able to:
– Understand the operations of upstream, midstream, and downstream sectors in oil, refined products, and biofuels
– Comprehend refining processes, calculate refinery margins, and manage price risks for refined products and biofuels
– Master sales, marketing, and trading practices for crude oil and refined products
– Develop and negotiate various sales contracts, including term and spot contracts
– Analyze international oil supply dynamics and geopolitics to minimize business risks

 Training Methodology
This training course features an interactive approach, encouraging delegate participation through group discussions, practical exercises, case studies, quizzes, and short videos highlighting petrochemical operations and environmental considerations. These methods reinforce new knowledge and address practical challenges faced in participants’ organizations.

 Organisational Impact
Organizations will benefit from enhanced skills and knowledge acquired by participants, leading to improved application in their work environments. The course promotes a broader understanding of global energy business management and the critical success factors across various business models. It also clarifies how innovations in oil, gas, and renewables can drive economic growth and improve living standards.

Personal Impact
Participants will enhance their technical knowledge and business acumen in the oil and gas industry, benefiting their career development.

By attending this course, individuals will:
– Master core competencies relevant to the Oil, Natural Gas, and LNG sectors
– Improve business skills to enhance capital productivity and operational efficiency
– Optimize value chains in the hydrocarbon industry to increase shareholder value
– Gain insights into the success factors in oil, gas, LNG, and refined products industries, enabling effective management of price risk uncertainties

WHO SHOULD ATTEND?
This training course is ideal for a wide range of professionals, including:
– Business Development Managers
– Sales, Marketing, and Trading Managers
– Legal Professionals and Law Firm Personnel
– Geoscientists, Engineers, and Refiners
– Bankers and Accountants
– Auditors and Media Personnel interacting with traders
– Government Regulators and Tax Advisors
– Compliance Officers and Financial Analysts
– Joint Venture Officers and Negotiators
– Professionals involved in Trading

Course Outline

DAY 1: Introduction to Crude Oil: A Finite Resource
– Overview of the Upstream Oil & Gas Industry
– Fundamentals of Oil & Gas Geology and Petroleum Engineering
– Exploration of Oil & Gas Reserves, Production, Consumption, and Trade
– Impact of the Shale Industry
– Trends in Carbon Emissions and Carbon Capture
– Basics of Refining and Refining Economics

DAY 2: Market Price Volatility of Crude Oil
– Factors Driving Oil Price Volatility
– Strategies to Manage Volatility
– Anatomy of the Crude Oil Pricing System
– Oil Market Prices and the Importance of Energy Security
– Geopolitical Influences

DAY 3: Introductory Concepts in Oil Trading
– Technical and Fundamental Analysis of Trading
– Trading Dynamics in Spot Markets
– Spot Crude Oil Prices and Brent Market Insights
– Indexing Crude Oil Prices

DAY 4: Petroleum Products Price Setting Mechanism
– Using Financial Derivatives for Hedging and Risk Management
– How Prices Are Reported in Physical and Financial Futures Markets
– Historical Development of Petroleum Exchanges
– Understanding Pricing Structures: Backwardation and Contango

DAY 5: Risk Management with Financial Derivatives
– Definition and Use of Options in Protecting National Income of NOCs
– Definition of Swaps and Their Historical Context
– Overview of Major Petroleum Exchanges (USA, UK, Singapore)

This course equips participants with the tools and insights necessary to navigate the complexities of oil price volatility and implement effective risk management strategies.