Budgeting & Cost Control for Oil & Gas Industry

Budgeting & Cost Control for Oil & Gas Industry

OBJECTIVES

• Understand the reasons and impact for oil price volatility
• Recommend strategic solutions to budget issues and cost control
• Measure and control costs effectively in a competitive environment
• Prepare, manage and control budgets in the Oil & Gas Industry
• Use budgets to make effective decisions to ensure growth, maintain profitability and reduce risk
• Recommend innovative hedging strategies used by leading international companies to control risk and manage budgets effectively

WHO SHOULD ATTEND?

• Those responsible for devising budgets, managing and controlling budgets
• Those responsible for making or acting on decisions based on budgets  Professionals who require a more in-depth understanding of integrated planning and budgeting techniques
• Financial Planners and Cost Analysts
• Line heads with direct planning and budgeting responsibility

COURSE OUTLINE

Day1 –

• The Case for Budgeting & Cost Control in the Oil & Gas Industry
• Oil Price Volatility – The Causes & Impact
• Major Costs of Acquisition, Exploration, Production, & Development
• Cost Oil & Profit Oil
• The Cost Curve of the Oil Market
• Controlling Gross Margins & Net Margins
• Managing National Fiscal Budgets

Day2 –

• Finding Strategic Solutions to Cost Control
• Re-assessing the Strategic Plan in the light of recent developments
• The need for Growth whilst managing costs
• Managing Working Capital & Cash Flow
• Evaluating & Managing Capital Projects
• Joint ventures; Merger & Acquisition as a solution and growth opportunity
• Finance solutions to growing costs and oil price volatility

Day3 –

• Measuring & Controlling Costs
• Cost Classification & Cost Behavior
• Job Process Costing; Batch Costing & Activity Based Costing
• Statistical Estimates of Costs
• Controlling Fixed & Variable Costs
• Earned Value Management
• Variance Analysis

Day4 –

• Budgeting in the Oil & Gas Industry
• The Benefits & Limitations of Budgeting
• The Essential Features & Types of Budgets
• Preparing Forecasts & Budgets in a volatile Oil & Gas industry
• Using Budgets as a Management Tool
• Sensitivity; What-if & Break-Even;  Analysis
• Managing & Controlling Budgets

Day5 –

• Hedging Costs to Manage the Budget
• Defining Hedging and Identifying Costs/Risks to Hedge
• Determining the Hedging Strategy
• Hedging Oil Price Volatility
• Hedging Exchange Rate Risk
• Hedging Interest Rate Risk
• Controlling the Hedge to avoid Speculation