Course Overview

This 5-day course provides a comprehensive understanding of asset management, valuation techniques, and risk analysis specific to the oil and gas industry. Participants will gain insights into the economic and financial aspects of managing oil and gas assets, learn valuation methods, and understand how to assess and mitigate risks. Through practical exercises and case studies, the course equips professionals with the tools needed to make informed decisions in the dynamic energy sector.

Target Audience

This course is designed for professionals involved in the oil and gas industry, including those with backgrounds in finance, petroleum economics, technical fields, strategic planning, risk management, and operations. It is ideal for individuals working within oil and gas companies, government agencies, and the support and service sectors.

Course Outcomes

By the end of this course, participants will:

- Understand the principles and techniques of asset management and valuation in the oil and gas industry

- Be able to construct and analyze financial models for valuing oil and gas assets

- Gain proficiency in identifying and assessing risks associated with oil and gas projects

- Learn how to implement risk mitigation strategies and optimize asset portfolios

This comprehensive 5-day course aims to equip participants with the essential skills and knowledge needed to excel in the field of asset management, valuation, and risk analysis within the oil and gas industry.

Course Materials

- Comprehensive course manual

- Excel spreadsheets for valuation and risk analysis exercises

- Case study documentation

 Teaching Methods

- Lectures and presentations

- Group discussions and interactive sessions

- Practical exercises and case studies

Course Outlines

Day 1: Introduction to Asset Management and Basic Valuation Techniques

Morning Session:

Welcome and Introduction

  - Course objectives and structure

  - Introduction to asset management in the oil and gas industry

- Fundamentals of Asset Management

  - Definitions and concepts

  - Importance of asset management in oil and gas

  - Key components and lifecycle of oil and gas assets

- Introduction to Valuation

  - Basic valuation principles

  - Overview of valuation methods used in the industry

Afternoon Session:

- Project Cash Flow Analysis

  - Components of cash flow in oil and gas projects

  - Understanding income statements and balance sheets

  - Cash flow forecasting

- Hands-On Exercise: Cash Flow Analysis

  - Practical example and group exercise

Summary of the day  Key Learning Points.

Day 2: Advanced Valuation Techniques

Morning Session:

- Discounting and Time-Value of Money

  - Importance of discounting in asset valuation

  - Techniques for discounting future cash flows

- Valuing Petroleum Resources and Reserves

  - Categories of petroleum resources and reserves

  - Methods for valuing reserves

Afternoon Session:

- Capital Budgeting Techniques

  - Net present value (NPV)

  - Internal rate of return (IRR)

  - Payback period and profitability index

- Hands-On Exercise: Capital Budgeting

  - Practical example and group exercise

Summary of the day  Key Learning Points.

Day 3: Asset Valuation Models and Financial Considerations

Morning Session:

- Constructing Asset Valuation Models

  - Building a valuation model from scratch

  - Key assumptions and variables

- Inflation and Real Value Considerations

  - Adjusting for inflation

  - Real vs. nominal values

Afternoon Session:

- Upstream Fiscal Terms and Agreements

  - Types of fiscal agreements (PSA, royalty/tax, etc.)

  - Impact on valuation

- Financial Structures and Funding

  - Cost of capital

  - Debt vs. equity financing

  - Hurdle rates and discount rates

Summary of the day  Key Learning Points.

Day 4: Risk Analysis and Management

 Morning Session:

- Introduction to Risk Analysis

  - Types of risks in oil and gas projects

  - Techniques for risk identification and assessment

- Decision Analysis and Decision Trees

  - Using decision trees to analyze risk

  - Practical examples in the oil and gas context

 Afternoon Session:

- Probabilistic Risk Analysis

  - Monte Carlo simulation and its applications

  - Scenario and sensitivity analysis

- Hands-On Exercise: Risk Analysis

  - Practical example and group exercise

Summary of the day  Key Learning Points.

 Day 5: Advanced Risk Management and Portfolio Optimization

Morning Session:

- Hedging and Risk Mitigation Strategies

  - Financial instruments for hedging (futures, options, swaps)

  - Implementing hedging strategies

- Real Options in Asset Valuation

  - Understanding real options

  - Applying real options to oil and gas projects

 Afternoon Session:

- Portfolio Management and Optimization

  - Diversification strategies

  - Optimizing a portfolio of oil and gas assets

- Case Studies and Group Discussion

  - Real-world examples

  - Group discussion and Q&A

- Course Wrap-Up

  - Summary of key Learning Points

  - Feedback and evaluation

  - Certificates and closing remarks