Course Descriptions
Not every course session is taught each year. The current course schedule details what is being offered this year. Number in parantheses ( ) indicates total classroom hours.
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.
Background to Oil and Gas Operations (3)
An introduction to issues such as reserves, tools, methods and background of the industry. Other topics include occurrence, migration and entrapment of oil and gas in the reservoir; exploration and development methods; petroleum geology and reservoir engineering; production mechanics; and the refining sector. This session will introduce the broad concepts affecting economics and viability from a practical view of industry fundamentals and set the scene for the sessions on Exploration and Production and the International Economics of Oil and Gas.
Background to Exploration and Production (3)
An Introduction to Exploration and Production and the key factors which affect and control these businesses. The session will be used to bridge the background session and the following economics sections and will cover aspects of geology and production engineering.
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 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. Review of 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 possible pitfalls. A case study will be used. 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 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 Procedures will be analyzed and discussed along with a typical host government accounting procedures. Participants will briefly present to the class the legal, fiscal and economic regime used in their country.
Financial Statement Analysis (4)
The theoretical background and analytical tools necessary to understand and interpret financial statements. This session 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, and harmonization of financial accounting diversity.
Understanding Financial Statements (4)
This segment provides 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.
Corporate Social Responsibility Issues in International Oil and Gas Operations/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 to address these issues. The discussion will explore how companies can succeed and profit under the complex set of pressures, liabilities, influences, laws, and stakeholders involved in the environmental and corporate social responsibility realm. Success requires the international oil and gas company to be adaptive—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; U.S. tax system in general, taxation of foreign operations, taxation of domestic operations by foreign persons, U.S. taxation of oil and gas industry; taxation of oil and gas in developing countries. Participants will 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. Also to be discussed is the various international auditing standards (ISA) and their relevance for oil and gas financial management.
Refinery Operations and 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 (6)
An overview of the status of International Accounting Standards (International Financial Reporting Standards) and its relevance to oil and gas accounting; efforts to harmonize international and regional accounting concepts, procedures, and practices; discussion of the U.S. Securities and Exchange Commission's views on International Financial Reporting Standards and issues, when registering securities with the SEC from an international viewpoint. Financial accounting diversity and the role and operations of the International Accounting Standards Board.
Strategic and Tactical Planning in the Energy Industry (4)
This module includes strategic planning, budgeting and performance reporting and includes discussions of vision statements strategic goals and strategies. Examples 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)
Processes that enable organizations to initiate successful change programs by bringing new information and ideas into the corporation. Key concepts include competitive advantage, strategic analysis, scenario planning and perspective in decision making. Presentations include competitor analysis, benchmarking and managing risk.
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 IT issues; characteristics of world-class IT organizations; determining IT strategy; ensuring IT delivers value.
Feasibility Studies and Project Financing (3)
Topics include 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 their relationship to 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 studies willl be reviewed.
Planning and Control of International Operations (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 white-collar crime, the elements of fraud, a profile of typical white-collar criminals, the most common types of fraud, and indicators of fraud 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)
International focus on corporate governance, accountability and corporate social responsibility. The role and international impact of legislation in the U.S. (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 and other financial instruments.
Sustainability for Oil and Gas Operations (3)
An assessment of the socio-economic issues in oil and gas operations, including accounting, auditing and reporting for environmental issues, health and safety. A review of information needs of stakeholders. National and international regulations and their significance. Human resource and ethical aspects and the valuation and evaluation of such services.
Financing of Operations: Principles, Practices and Analytical Tools (3)
Understanding 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 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)
How commercial banks finance the exploration, development, and production costs of independent oil and gas companies. Case studies 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.
Activity Based Costing and 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 items. Use of the balanced scoreboard. A case orientation will be used.
Risk Management (3)
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 over-the-counter, futures and options markets for oil, natural gas and currencies as tools to bring stability to business and 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.
Note: A major program objective is the exchange of experience and ideas among participants from a variety of oil-producing countries. Participants are requested to bring with them significant materials pertaining to their country's accounting regulations, investment laws regarding oil/gas operations, and similar taxation aspects for evaluation and discussion within the classes.
