Course Overview
Financial decision-making in the petroleum and petrochemical sectors involves managing billions of dollars annually. The volatility of costs, market risks, and unpredictable conditions makes effective financial management critical. Given the complexity of these industries, specialized financial management practices are essential for asset management, fiscal control, and strategic decision-making.

Learning Objectives
By attending this training seminar, participants will gain practical knowledge to:

• Analyze income statements, balance sheets, and cash flow statements, using ratios to interpret financial performance in the Oil & Gas and petrochemical industries.
• Recognize the critical importance of cash flow and discounted cash flow (DCF) over profit in driving company value.
• Develop costing systems, including activity-based costing (ABC), for optimal decision-making and shareholder wealth maximization.
• Understand managerial roles in budgeting and apply activity-based budgeting (ABB).
• Determine the cost of capital to assess financing options and achieve an optimal financial structure.
• Efficiently manage cash and working capital to reduce costs and improve liquidity in the Oil & Gas and petrochemical sectors.

Target Audience
This course is suitable for professionals seeking to enhance their financial management expertise in the Oil & Gas and petrochemical industries, including:

• Corporate Accountants, Financial Controllers, Treasury Officers, and Management Accountants
• Finance staff handling accounting, payables, receivables, inventory, or fixed assets
• Joint Venture Accountants and Auditors
• Internal, External, and Financial Auditors
• Government Regulators and Auditors
• Financial and Investment Analysts

Training Methodology
This practical, results-oriented program is designed based on adult learning principles. It incorporates:

• Case studies from the Oil & Gas and petrochemical industries
• Short, interactive presentations by the instructor
• Group exercises and discussions, followed by participant presentations

Participants will have opportunities to apply concepts in realistic scenarios. Pre- and post-course assessments will measure learning outcomes.

Course Contents

Module 1 – Accounting & Financial Essentials in Oil & Gas and Petrochemical Industries

• Key Topics:
  • Industry developments: price volatility, supply, and demand changes
  • Nature of the petrochemical industry
  • Managing macroeconomic factors such as interest rates, exchange rates, and oil prices
  • Resource and reserve management

Module 2 – Major Accounting Issues

• Key Topics:
  • Revenue recognition
  • Costs in acquisition, exploration, development, and production of oil or gas reserves
  • Break-even oil, cost oil, and profit oil
  • Accounting approaches: “Successful Efforts” (SE) vs. “Full Cost” (FC)
  • IFRS standards in the Oil & Gas and petrochemical industries

Module 3 – Financial Management

• Key Topics:
  • Financial statement analysis in Oil & Gas and petrochemical industries (income statement, balance sheet, cash flow)
  • Operating performance measurement
  • Financial performance and position evaluation
  • Risk assessment and limitations of ratio analysis
  • Annual report analysis

Module 4 – Financial Structure, Costing, and Decision-Making

• Financial Structure:
  • Cost of debt and equity
  • Weighted Average Cost of Capital (WACC)
  • Optimal capital structure
• Costing:
  • Fixed, variable, and overhead costs
  • Overhead allocation and activity-based costing (ABC)
  • Expense vs. inventory valuation, contribution vs. profit
• Decision-Making:
  • Make-or-buy decisions
  • Shutdown or contribution decisions
  • Product mix and limiting factor decisions
  • Decision tree applications

Module 5 – Capital Budgeting & Financial Ratio Analysis

• Capital Budgeting:
  • Capital rationing and project ranking
  • Inflation impact on investments
  • Decision-making using expected values and standard deviations
  • Budgeting process, activity-based budgeting, and risk assessment
• Financial Ratio Analysis:
  • Types of ratios
  • DuPont analysis for evaluating and improving ROE
  • Investment performance evaluation
  • Assessing financial performance of leading international companies in the sector

Module 6 – Valuation, Working Capital Management, and Cash Improvement

• Valuation:
  • Methods for valuing Oil & Gas and petrochemical companies
  • Payback, Net Present Value (NPV), Internal Rate of Return (IRR), Discounted Payback
• Working Capital Management & Cash Improvement:
  • Managing working capital and liquidity
  • Cash improvement techniques
  • Banking and treasury management
  • Current practices in mergers and acquisitions