Introduction

The upstream oil and gas sector operates within a highly capital-intensive environment where investment decisions carry significant financial, operational, and strategic implications. Exploration and production projects require substantial capital commitments, making economic evaluation, risk assessment, and financial accountability critical to achieving sustainable business performance and shareholder value.

The Upstream Economics and Management training course provides participants with a comprehensive understanding of petroleum project economics, investment evaluation techniques, uncertainty analysis, and upstream accounting practices. The training course combines economic modelling, project valuation methodologies, and financial reporting frameworks to support effective decision-making throughout the lifecycle of upstream projects.

Participants will explore the application of economic indicators, cash flow modelling, risk assessment tools, and International Financial Reporting Standards (IFRS) relevant to upstream petroleum operations. The training course also addresses auditing practices, corporate governance requirements, and financial performance evaluation to strengthen financial oversight and operational effectiveness.

Key focus areas include:

Key Learning Outcomes

At the end of this Upstream Economics and Management training course, participants will be able to:

Training Methodology

This training course adopts a practical and interactive learning approach that combines case studies, economic modelling exercises, group discussions, and industry-focused examples. Participants engage with real-world upstream scenarios, financial analysis techniques, and risk assessment tools to develop practical skills that can be immediately applied within exploration, production, finance, and audit environments.

Upstream Economics and Management

Who Should Attend?

This Upstream Economics and Management training course is designed for:

  • Oil & Gas Field Engineers
  • Oil & Gas Managers
  • Oil & Gas Auditors
  • Oil & Gas Planners
  • Financial Analysts
  • Project Management Professionals
  • Corporate Accountants and Financial Controllers
  • Treasury Officers and Management Accountants
  • Joint Venture Accountants and Auditors
  • Government Regulators and Auditors

Course Outline

Module I: Petroleum Project Economics & Risk Analysis

Day 1
Cashflow Analysis
  • Familiarization with Economic terms
  • Setting up Cashflow Calculation
  • Depreciation Methods
  • Loss Carry Forwards
  • Inflation
  • Nominal & Real Cashflow
  • Sunk Costs
  • Project Financing
Day 2
Economic Indicators
  • Economic Indicators Definitions
  • Present Value Concept
  • Discount Factor
  • Net Present Value
  • Internal Rate of Return
  • Effect of Project Delay
  • Payback Period
  • Profit / Investment Ratio
  • Incremental Projects
Day 3
Risks and Uncertainties
  • Risk & Uncertainty
  • Expected Value Concept
  • Decision Tree Analysis
  • Farm-out Decision
  • Probability Analysis
  • Sensitivity Analysis
  • Probability Distribution
  • Monte Carlo Simulation
Day 4
Setting up Spreadsheet Calculation
  • Introduction to Spreadsheet Calculation
  • Simple Cashflow using Excel
  • NPV Calculations
  • Application of Economic Indicators
  • Class Discussion
Day 5
Setting up Oil Field Development Model
  • Setting up an Integrated Economic Model of a Typical Oil Field Development
  • Project Sensitivity Analysis for the Selected Model
  • Introduction to Russell Field Model
  • Final Remarks

Module II: Upstream Petroleum Accounting

Day 6
Major Accounting & Auditing Issues in the Upstream Petroleum Sector
  • The Latest Accounting & Auditing Issues Facing the Sector
  • The Impact of Commodity Prices, Currency & Interest Rate Fluctuations and Political and Environmental Developments
  • The Impact of Financial and Accounting Issues on Strategic Development and Growth within the Sector
  • The Annual Reports & Financial Statements of Leading International Petroleum Companies
  • An Overview of IFRS in Relation to Upstream Oil & Gas Accounting
  • The Role of Auditing
Day 7
Accounting for Revenue & Costs in the Upstream Petroleum Sector
  • Revenue Recognition & IFRS 15: Revenue from Contracts with Customers
  • Costs in Acquisition, Exploration, Development and Production
  • IFRS 6: Exploration for and Evaluation of Mineral Assets
  • Accounting Approaches - The "Successful Efforts" (SE) Method or the "Full Cost" (FC) Method
  • Break Even Oil, Cost Oil & Profit Oil
  • Evaluating Profitability of Leading International Oil & Gas Companies
Day 8
Accounting for Assets in the Upstream Petroleum Sector
  • Reserves & Resources
  • IAS 16: Property, Plant and Equipment
  • Depletion, Depreciation & Amortisation (“DD&A”)
  • IAS 36: Impairment of Assets
  • IAS 37 – 39 : Provisions, Contingent Liabilities and Contingent Assets, Intangible Assets and Financial Instruments
  • Evaluating the Assets & Reserves of Leading International Petroleum Companies
Day 9
Creative Accounting, Corporate Governance & Auditing
  • Creative Accounting
  • Corporate Governance
  • Published Financial Statements
  • The Role of the Board & Audit Committee
  • External Auditing - Reporting to investors in the Oil & Gas industry
  • Internal Auditing - Defining and Developing the Internal Audit Process
Day 10
The Internal Audit Function
  • Establishing the Roles & Staff within the Internal Audit Department
  • The Various Types of Audits
  • Planning & Commencing Internal Audit Examinations
  • Controls & Substantive Tests
  • Communicating Audit Findings
  • The Audit Exit Conference Meeting & Post-Audit Reviews

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