INTERNATIONAL FINANCIAL REPORTING & TREASURY RISK MANAGEMENT FOR OIL & GAS INDUSTRY

Introduction:

This training would provide participants with the necessary knowledge and skills to efficiently handle the treasury while enhancing liquidity, returns on investment and foreign cash flow as well as risk management. This interactive training will also build an increased understanding of International Financial Reporting, which will enable reports to be written in accordance with IFRS and assessed to improve decision making. The function of Financial Reporting & Treasury Risk Management is crucial to the success and sustainability of all major business corporations. This has never been truer, given the ever-increasing pace of regulatory, compliance, technology and financial risk changes within the Oil & Gas industry.

Treasury Management ensures adequate liquidity to fulfill its obligations, while effectively managing payments, receipts and financial risks such as credit risk, oil price, exchange rate and interest rate risk. Moreover, effective management of the Treasury Risk will enable companies to make informed and better strategic decisions, providing analysis, finance and risk assessment.

Financial Reporting provides an important understanding of the challenges and practices of Oil & Gas accounting, reporting, and assessing efficiency. This improves the ability to plan, use and critically analyze information, apply knowledge of the specialist industry and analytical skills related to it.

Course Objectives:

At the end of this course, participants will be able to:

• Manage funds; funds & work capital to reduce funding costs and increase returns
• Determine and execute risk management plan for the organization
• Recommend decision taking on hedging and risk management
• Develop the organization’s Corporate Governance
• Apply the most applicable International Financial Reporting Standards for the Oil & Gas Sector
• Review and use the information publicly available to benchmark their company’s business performance in the Oil & Gas industry

Course Outline:

Day 1: The Role of Treasury Management – An Overview

• The Role & Scope of Treasury Management
• Operation & Location of a Treasury Department – Cost or Profit Centre; Centralized or Decentralized
• Cash & Liquidity Management
• Working Capital Management
• Capital / Finance Management
• Risk Management

Day 2: Cash & Liquidity Management

• Cash Forecasts: Role & Preparation
• Investment of Cash Surpluses to Maximize Return
• Meeting Cash Calls and Short-Term Cash Shortages / Short Term Finance
• Working Capital Management – Determining the Optimum Level
• Multi-national & Group Cash Management
• Cash Budgets: Process & Control

Day 3: Financing and Capital Management

• Strategic Objectives: Consolidation, Growth, M & A; Joint Ventures, Diversification etc
• Financing Strategic Objectives / Long Term Finance (Public & Private Equity vs. Buyer & Supplier Debt)
• Optimizing the Capital Structure to Minimize the Cost of Capital (WACC)
• The Capital Asset Pricing Model (CAPM)
• Capital Investment Appraisal – NPV; IRR, Payback
• Capital Rationing: Internal & External

Day 4: Risk Management

• Identifying Risks and Uncertainties – Internal & External; Financial & Non-Financial
• Measuring Risk – Volatility; Variance; Standard Deviation; Probability; Value at Risk
• Determining the Risk Management Strategy – Assessing Impact and Probability
• The 4 T’s – Tolerate; Terminate; Transfer; Treat
• Internal Controls & Internal Auditing
• Credit & Counterparty Risk Management

Day 5: Currency; Interest Rate & Commodity (Oil Price) Risk Management

• Forward Contracts and Forward Rate Agreements
• Options – Calls & Puts; European & American
• Futures – Market Correlation; Margin Payments, etc.
• Swaps – Currency & Interest Rate Risk and Benefits
• Foreign Currency Accounts Other Internal Methods / Tactics
• Foreign Currency Borrowing

Day 6: The Oil and Gas Sector & Major Accounting Issues

• The Oil & Gas Sector & the Macro-economic Factors
• Costs in Acquisition, Exploration, Development and Production of new oil or natural gas reserves
• Accounting Approaches
• Introduction / Overview of IFRS in relation to the Oil & Gas Sector, with particular reference to:
  • IFRS 1: First-time Adoption of International Financial Reporting Standards
  • IFRS 6: Exploration for and Evaluation of Mineral Assets
  • IFRS 10: Consolidated Financial Statements
  • IFRS 11: Joint Arrangements
  • IAS 16: Property, Plant and Equipment
  • IAS 36: Impairment of Assets
  • IAS 37: Provisions, Contingent Liabilities and Contingent Assets
  • IAS 38: Intangible Assets
  • IAS 39 Financial Instruments: Recognition and Measurement – Superseded by IFRS 9 – was to be effective 2013 but now 2018

Day 7: Evaluating the Performance and Identifying the Accounting Issues

• Analysis of Financial Statements
  • Income Statements
  • Statement of Financial Position (Balance Sheet)
  • Cashflow Statements
• Identification & Evaluation of their Accounting Policies
• DuPont Analysis – Evaluating and Improving Return on Equity (ROE)
• Evaluation of their Share Price and Investment Performance

Day 8: Accounting for Upstream Activities with Reference to IFRS

• Reserves and Resources
• Exploration and Evaluation
• Revenue Recognition
• Assets
• Depletion, Depreciation & Amortization (DD&A)
• Impairment of Development, Production and Downstream Assets

Day 9: Joint Arrangements, Financial Instruments and Derivatives

• Business Combinations, Joint Ventures & Production Sharing Agreements (PSAs)
• Treasury Management Issues for Multi-nationals
• The Use of Derivatives in the Oil & Gas Sector to manage the commodity, currency and interest-rate risks, etc.

Day 10: Creative Accounting and Corporate Government

• Creative Accounting
• Leases – IFRS 16 (new standard)
• Auditors and Reporting to Investors in the Oil and Gas Industry
• External Audit Investigations and Reports
• Ethical Issues
• Corporate Governance
• Government Regulation
• Investor Confidence and Share Prices

Who Should Attend?

• Practitioners that want to refresh and improve their Treasury Risk Management expertise and skills
• Economic decision-makers whose decision-making and research processes are to be strengthened by participation
• Managers, and financially responsible people
• Practitioners acting on other people’s financial decisions, who will gain an appreciation for decision-making to ensure shared values within the organization
• Practitioners with a finance passion and the new trends in the industry

Delivery Method: Lectures, discussions, syndicate work, case studies, role – play and group exercises. Audio – Visual aids will be used to reinforce these training and learning methods.

Venue: London

Fee: $9,000.00

Duration: 2 Weeks

Date: Mar 27^th – 7th Apr 2023