INTRODUCTION

As the global shift toward renewable energy accelerates, the upstream oil and gas industry will increasingly confront complex technological, operational, and organizational challenges. One of the primary challenges is the need for a streamlined budgeting process. This necessity raises questions about the effectiveness of traditional budgeting methods commonly used in the oil and gas sector and highlights the typical budgeting-related difficulties organizations may face.

This Keleaders Upstream Budget Practice training course will guide participants through essential tasks that an upstream oil and gas company must undertake. Attendees will gain insights into how economic factors influence budgeting decisions and management strategies.

The training course will cover:

• Sensitivity, What-if, and Break-Even Analysis
•  Earned Value Management
•  Cost-Volume-Profit (CVP) Analysis
•  Activity-Based Budgeting (ABB)
•  Zero-Based Budgets

Objectives

By the end of this training course, participants will be able to:

• Understand the impact of oil price volatility on upstream profitability and budgeting.
• Propose effective solutions for budget-related challenges and cost control.
• Prepare, manage, and control budgets within the oil and gas industry.
• Analyze key differences and applications of various budgeting techniques.
• Recognize and evaluate hedging strategies employed by leading upstream companies to mitigate risks and manage budgets.

Training Methodology

The Upstream Budget Practice training course will employ a range of proven learning techniques to maximize understanding, comprehension, and retention of the material presented.

Organisational Impact

Organizations will benefit from sending employees to this training course by:

• Equipping staff with skills to enhance cost planning, profitability, and cash flow.
• Fostering a disciplined decision-making approach based on cost-benefit analysis.
• Upskilling employees to improve the overall financial culture within the company.
• Developing strategic thinking abilities through an understanding of the relationships between costing, budgeting, and strategic planning.
• Mastering effective forecasting techniques.

Personal Impact

Participants will enhance their personal management skills by:

• Gaining a solid foundation in accounting and finance systems.
• Making more informed financial and strategic decisions.
• Improving financial communication skills.
• Visualizing the connections between strategy, planning, resources, and budgets.
• Effectively collaborating with various departments on financial and strategic issues.

WHO SHOULD ATTEND?

This Upstream Budget Practice training course is essential for a wide range of professionals, especially those with financial responsibilities in departments or projects, or those involved in cost analysis to support business decisions. Key participants include:

• Finance Managers
• Cost Accountants
• Budget Managers
• Project Managers
• Professional Engineers

Course Outline

DAY 1: Macro Analysis of Upstream Oil & Gas

• Understanding Upstream Price Volatility
• Cost and Growth Strategies: Acquisition, Exploration, Production, and Development
• Interpreting the Crude Oil Cost Curve
• National Fiscal Budgets and Crude Oil
• Controlling Margins in Upstream Oil & Gas

DAY 2: Strategic Cost Control in Oil & Gas

• Recent Developments: Balancing Growth and Cost Management
• Managing Working Capital and Cash Flow
• Evaluating and Managing Capital Budgeting
• Sensitivity, What-if, and Break-Even Analysis
• Earned Value Management

DAY 3: Budgeting in Upstream Oil & Gas

• Overview of Budgeting: Benefits, Limitations, and Types
• Budget Preparation: A Comprehensive Overview
• Comparing JV Budgets with Corporate Budgets
• Operated vs. Non-Operated Budgets
• Budget Analysis: ABB, Traditional, Incremental, and Zero-Based Budgeting

DAY 4: Budgetary Control in Upstream Oil & Gas

• Administration and Control of Budgets
• Financial Control Systems: Internal vs. External Controls
• Budgetary Control: Variance Analysis, Project Cost Production, Cost Reporting, and Control
• Budget Implementation Procedures in Oil & Gas
• Performance Benchmarking and Measurement

DAY 5: Hedging Strategies & Budgetin

• Understanding Hedging: Costs and Risks
• Identifying Hedging Strategies in Oil and Gas
• Tools for Mitigating Crude Oil Volatility
• Managing Exchange Rate Exposure through Hedging
• Interest Rate Risk and Hedging Instruments
• Differentiating Hedging from Speculation