Course Descriptions
Note: Not every course session is taught each year, please see the current course schedule for what is being offered this year.
Introduction and Overview (3)*
An outline of the scope of the course and its instructional methods; an assessment of the changing nature and content of financial management (especially accounting) for oil and gas operations; a review of comparative financial information measurement and reporting systems around the world.
Some Background to Oil and Gas Operations (3)
An introduction to some of the issues including reserves, tools, methods and background of the industry touching briefly on the occurrence, migration and entrapment of oil and gas in the reservoir; exploration and development methods; petroleum geology & reservoir engineering; production mechanics; the nature of oil and gas and some comments on the refining sector. This introductory session will introduce the broad concepts affecting economics and viability from a practical view of the industry fundamentals and set the scene in particular for the next sessions on the International Economics of Oil and Gas as well as relating these practical aspects to other course sectors.
International Economics of Oil and Gas (6)
A transnational view of different economic methods of assessing oil and gas exploration and development opportunities for government, state concern or private industry, the sessions will focus on practical approaches for assessing project viability. This will be illustrated with examples from different countries. The assessment of competitive fuels including the rapidly growing international gas business, LNG, the impact of price changes and of political and legislative risk are also discussed. Consideration is given to what attracts development funds initially and the relative position of private and state-owned concerns. A key aspect of these sessions will concentrate on what makes good project economics with a discussion of some of the pitfalls to be avoided. A case study will be used to put many of these individual approaches in context. The intent is to put international decision economics in the light of common sense practical petroleum-related investment in the current climate.
Oil and Gas Accounting (15)
Detailed review of accounting principles, practices and procedures relating to various phases of oil and gas operations, including: property acquisition, retention and surrender; predrilling exploration; exploratory and development drilling; impairment and amortization of capitalized costs; mineral conveyances; oil and gas production; joint interest operations, and the related financial statement disclosures.
Participants will be asked to comment on their oil and gas accounting systems.
International Oil and Gas Law (12)
A review of different contractual arrangements used to explore, develop and produce oil and gas. The evolving contractual granting process will be analyzed by studying fundamentals of licenses, concessions, risk service agreements and production sharing contracts. Specific emphasis will be given to: fiscal and economic regime, work commitments, work programs, terms, government compensation and government share, use of local companies and workers, government operating companies, surrender provisions, marketing, natural gas, exchange controls, arbitration, and force majeure. As most oil and gas operations are joint ventures, joint operating agreements governing shared operations will be analyzed. Specific attention will be devoted to the: operating committee, operator authority, expenditure process, sole risk and non-consent, assignments and preferential rights. The Model Form International Accounting Procedure will be analyzed and discussed along with a typical Host Government Accounting Procedures.
Participants will be asked to briefly present to the class the legal, fiscal and economic regime used in their country.
Financial Statement Analysis (4)
This session covers the theoretical background and analytical tools necessary to understand and interpret financial statements. It provides detailed information on several analytical methodologies including common size financial statements, ratio analysis and credit ratings. A comparative study of several international energy companies highlights the practical aspects of these approaches.
International Dimensions of Accounting (4)
An appraisal of the diversity of financial reporting and disclosure practices around the world, including accounting clusters. International accounting classifications, foreign currency translation, inflation accounting, segmental reporting, consolidation and transfer pricing. Harmonization of financial accounting diversity.
Understanding Financial Statements (4)
This segment of the Program is designed to provide the participants with a conceptual understanding of the nature and uses of the primary corporate financial reports – the income statement, balance sheet and cash flow statement. Also includes reviews of the Notes to the Financial Statements, the Supplemental Reporting Requirements for Oil and Gas Companies and external audit reports.
Appraising Producing Oil and Gas Properties (2)
General approaches to estimating fair market value practices specific to the petroleum industry. Forms of discounted cash flow analysis.
Environmental and Corporate Social Responsibility Issues in International Oil and Gas Operations and Transactions (3)
A discussion of the complex set of issues facing international oil and gas companies in terms of environmental and sustainability issues, and the expansion of environmental matters into the broader realm of corporate social responsibility. As climate change, greenhouse gas emissions and carbon trading have become increasingly significant risks and potential opportunities, companies need to focus on developing strategy for addressing these issues. The discussion will explore how these companies can attempt to succeed and profit under the complex set of pressures, liabilities, influences, laws, and stakeholders involved in the environmental and corporate social responsibility realm. Success in this constantly changing area requires the international oil and gas company to be adaptive: to be able to evolve with the constant changes in the legal, political, social and economic environment. In the financial area, the discussion will include potential legal liabilities, means of addressing these liabilities in contract negotiations, evaluation of environmental insurance options, and environmental financial reporting.
International Taxation of Petroleum Enterprises (l2)
General review of taxation systems of the world; comparative international tax systems; tax treaties and their impact on international taxation; foreign tax credit-concept and application; US tax system in general, taxation of foreign operations, taxation of domestic operations by foreign persons, US taxation of oil and gas industry; taxation of oil and gas in developing countries. Participants will be asked to comment on or outline their country’s taxation system, with particular reference to oil and gas operations..
The Audit Process (3)
The auditing of operations (e.g., financial, operational and computer auditing), and internal and external audit problems of oil and gas activities; and the interrelationship with accounting principles and standards. The various international auditing standards (ISA) and their relevance for oil and gas financial management.
Evolving Role of Internal Auditing: Assurance and Consulting Engagements (3)
The latest techniques and emerging issues will be discussed. Change in internal audit standards and groups have changed significantly over the past few years internationally due to pervasive changes in corporate governance, risk management and compliance.
Information Systems, Information Technology & Accounting Information (3)
An examination of the role of accounting systems, accounting systems components, the various types of information and accounting systems, critical success factors for systems success, functions of an accounting systems, the Internet and other factors driving changes in accounting systems, management and control of information technology, and large-scale integrated accounting packages. The focus is on factors driving changes in legacy accounting systems and how to manage this change and spot opportunities to create a strategic advantage.
Refinery Operations & Accounting (6)
The “inside” story of plant operations; markets for crude and products; petrochemicals and common usages; volumetric and financial accounting issues; product costs, depreciation and amortization; LIFO and FIFO choices; issues surrounding construction of new refineries and chemical plants; trading, hedging and the development of an approach to strategic hedging.
International Accounting Concepts and Standards (3)
An overview of the status of the International Accounting Standards (International Financial Reporting Standards) and their relevance to oil and gas accounting; efforts to harmonize international and regional accounting and auditing concepts, procedures, and practices; considerations when registering securities with the Securities and Exchange Commission from an international viewpoint. Case study. Harmonization of financial accounting diversity. The role and operations of the International Accounting Standards Board and the International Federation of Accountants.
Strategic and Tactical Planning in the Energy Industry (4)
This module includes segments on Strategic Planning, Budgeting and Performance Reporting. It includes a discussion around crafting vision statements, strategic goals and strategies. Real world examples are used to illustrate effective strategic practices. Detailed reviews of the budgeting and performance reporting processes highlight the methods for linking plans to operations.
Building a Learning Organization (4)
This segment deals with processes that enable organizations to initiate successful change programs by bringing new information and ideas into the corporation. It highlights such key concepts as competitive advantage, strategic analysis, scenario planning and perspective in decision-making. Presentations on competitor analysis, benchmarking and managing risk round out this part of the Program.
Management Information Systems for the Energy Industry (3)
A discussion of current issues impacting IT and the energy industry, including ways to optimize the value that IT brings to the business. Key topics include: Issues for IT today; Characteristics of world-class IT organizations; Determining the right IT strategy for your organization; Ensuring IT delivers value.
Feasibility Studies & Project Financing (3)
Case studies in Project Financing; an appraisal of technical aspects of project evaluation, and details of project economics, with emphasis on how technical data are translated into the numerous assumptions that constitute the economic model of the project; elements of primary concern to banks, and development of a particular cash flow profile; typical methods of performing feasibility studies, economic criteria, debt capacity tests, and project studies; risk analysis, cash flow projections, and project finance and capital requirements.
International Financing of Oil and Gas Operations (3)
Project financing and capital requirements; financing techniques used by international lenders in the areas of field development, pipelines, process facilities, and equipment; evaluation of elements of risk relating to credit, reserve, construction, operation, market, force majeure, and the state in their relationship to the financing; discussion of loan documentation with an explanation of terms and elements critical to each financing concept; host country problems and issues in financing. Case study.
Planning and Control of International Operations: Other Controllership Issues (3)
An appraisal of various planning and control issues faced in international operations; inter-country difficulties; the role of the controller; the interaction of financial planning and control issues.
Fraud: Detection and Prevention (2)
A review of the white collar crime problem, the elements of fraud, a profile of typical white collar criminals, the most common types of fraud crimes, and indicators of fraudulent acts that the financial professional often is in the best position to detect. The course provides an overview of the fraud examination as a methodology of resolving fraud allegations from inception to disposition.
Ethics and Compliance Programs (2)
Most large companies implement a code of conduct to guide employees, officers and directors in complying with laws and regulations. The United States Federal Sentencing Guidelines defined an effective compliance program. This presentation will discuss the definition of an effective compliance program and what companies do to guide their employees.
International Corporate Governance (3)
The greater international focus on Corporate Governance, accountability and corporate social responsibility. The role and international impact of legislation in the US (Sarbanes-Oxley Act) and abroad.
Special Financial Issues for Oil and Gas Activities (2)
An insight into insurance aspects pertaining to oil and gas operations. An evaluation of derivatives, including options, forward contracts, futures contracts and swaps. Creation of derivatives. Other financial instruments.
Sustainability for Oil & Gas Operations (3)
An assessment of the socio-economic aspects included in oil and gas operations, including the accounting, auditing and reporting for environmental aspects, health and safety. The information needs for stakeholders, the groups that have a direct stake in the affairs of an organization are the focus. A sustainability index that tracks the performance of organizations reflects such broader responsibility. The governmental regulatory aspects of a national and international nature are becoming more and more significant. It furthermore deals with the human resource and ethical aspects, and the valuation and evaluation of such services.
Financing of Operations: Principles, Practices and Analytical Tools (3)
This module deals with the goals that corporate financial managers pursue in their investment and financing activities, the basic financing instruments they use to raise capital, and the principles and analytical tools they apply when deciding on the maturity mix and the debt-equity mix for the right-hand side of the balance sheet. The basic financing instruments that are reviewed include common stocks, bonds, commercial paper, and long-term and short-term commercial bank financing. The sources of repayment for long-term and short-term debt are identified.
Bank Financing of Oil and Gas Operations (3)
This module investigates how commercial banks finance the exploration, development, and production costs of independent oil and gas companies. An actual case example is used to develop the principles, practices, and analytical tools banks use in their credit analysis and loan structuring activities. Emphasis is placed on how banks use present value techniques to value reserves. Case study.
Activity Based Costing & Management (6)
Activity Based Costing (ABC) and Activity Based Management (ABM) are effective tools for costing out products and services. ABM improves profitability by reducing cost drivers and eliminating non-value. Use of the balanced scoreboard. A case orientation will be used.
Risk Management (2)
In this world of volatile energy prices, investors, bankers and customers all place a high value on stability of earnings and prices. This module describes the roles of “over-the-counter”, futures and options markets for oil, natural gas and currencies as tools to bring stability to your business. Even though most such markets are based in the US and Europe, you will learn how to translate these opportunities into added value to your organization in your home country. The instructors for this module are active traders of these commodities and/or advisors to those who are in the energy or financial industries.
Technical Session (Optional) (3)
A specific technical insight into the extraction and development of oil and gas resources.
