Oil & Gas 'Mini-MBA' for the Elite Manager

Falconbury’s In-house Oil & Gas ‘Mini-MBA’ – Increase your commercial and strategic understanding of the oil and gas industry in a practical, intensive In-house training programme.

Course Overview

Keeping ahead of the competition in the Oil and Gas industry depends heavily on your team – performance is everything, but how do you manage this and at a price to suit your budget?

This 5-day practical and intensive In-house programme will ensure that your organisation is able to react efficiently to market challenges within the oil and gas industry. The course can be tailored to meet your teams training requirements at a time and place which suits your organisations needs. Falconbury offers a variety of bespoke training solutions using the expert trainers with real industry experience to ensure your team receives the highest standard of training available.

What this In-house programme will do for you and your team:

  • SHARPEN your teams appreciation of the economics of oil and gas to understand the driving forces behind the industry
  • REINFORCE your teams decision-making capabilities through understanding the strategic, commercial and financial aspects of the industry
  • UNDERSTAND the financial impact that you can have on your organization and its profitability
  • DEVELOP an understanding of the importance of contracts in oil and gas projects
  • UNDERSTAND the key questions and areas you should be addressing as an elite manager who needs to be more commercially aware
  • ENHANCE your strategic leadership and people management techniques to allow you to leverage the most out of you, your team and your business partners
  • DEVELOP your understanding of the strategic issues for NOC’s and IOC’s

Oil and Gas industry context

The business cases, examples and exercises throughout this in-house programme are based on and built around real-life scenarios that have been specifically developed for this programme. Participants will work in groups throughout the course applying key techniques learnt in Oil and Gas and, on occasion, comparing the results to real-life outcomes in companies using a unique case study developed solely for this programme.

Your next step is to call us now on +44 (0)20 7729 6677 or email us at info@falconbury.co.uk or use our contact form and find out how we can help. There are no commitments, and if we cannot help our advice and recommendations are free of charge.

Sample Programme Day 1

Module 1 – Economic, commercial and strategic drivers of oil and gas

This module will provide an insight into Oil and Gas, both historically and currently, and how their markets remain clearly in the regulatory and policy spotlight. It will also consider the drivers and nature of the structural change which is transforming international oil and gas which will affect the investment and operating environment. The way in which these changes will shape the development of the industry needs to be addressed in assessing your organizations commercial and strategic options.

Why Oil and Gas matters

  • Petroleum as an industry of feast or famine – the reasons and the consequences
  • Oil as a global market and gas as a regional market
  • The vertical integration of petroleum companies. How it has changed and why the International Oil Company experience has differed from the National Oil Company experience
  • The current and future state of oil prices
  • The relationship between oil prices and gas prices
  • Developments in international gas markets and the growing role of LNG
  • International transport of gas – the issues
  • National Oil Company and International Oil Company relations
  • Managing oil and gas price volatility

Sample Programme Day 2

Module 2

Financial management in the oil and gas industry

The Oil and Gas industry is characterized by its high levels of risk investment and the all-too-often time-lag before returns can be generated, if at all. Taking a demystifying and practical approach in this module we analyze the financial fundamentals of the Oil and Gas industry in such a way that you will understand how finance and management accounting departments tackle the main issues involved. You will gain valuable insights into the financial impact you can have on your organization and its profitability.

The Business Model

  • How cash ‘flows’ in an organisation
  • Equity, debt and leverage
  • The difference between turnover, cash and profit
  • Capital expenditure (Capex), operating expenditure (Opex)
  • Working capital
Financial Terminology and Policies
  • Gross and net margins
  • Depreciation, depletion and amortisation
  • Impairment and decommissioning
  • Revenue recognition
  • EBIT and EBITDA
  • Reserves

Key Financial Statements

  • Operating Statement (Profit and Loss)
  • Balance Sheet
  • Cash Flow Statement

Key Business Ratios

  • Specialist ratios that apply to oil and gas operations – reserve cost and reserve value ratios (Case Study: Shell)
  • The Profit Improvement Model (Price, volume and cost relationship)
  • The Balanced Score Card

Review of an IOC’s financial results.

Capital Projects

  • The principles of investment appraisal
  • The key methods (payback period, net present value and internal rate of return)
  • Uncertainty and risk

Sample Programme Day 3

Module 3

Regulatory and Contractual Systems for Oil and Gas Production

This section will examine the regulatory and contractual structures of the upstream oil and gas industry. The sector is different from most others given the level of government intervention and control even in countries where there is little or no state ownership. The level of production, and the precise work programme under which oil will be produced, is controlled by government.

This section examines how governments implement their policy choices through licensing, production sharing, and other methods. It looks at how investors (and state companies) proceed to allocate costs and benefits under the concession/licence/ production sharing arrangement, and the role of the commercial contracts needed to bring reservoirs into production.

  • Contracts with government – licensing and production sharing
  • Role of the state company
  • Contracts with co-venturers
  • Operatorship
  • Function and purpose of commercial contracts
  • Allocation of risk and reward under contracts
  • Stability and certainty over time

Module 4

Strategic Issues for IOCS and NOCS

NOCs are becoming the main industry players with their control of over 70 percent of proven oil reserves. At the same time, there is growing concern over the future of the IOCs as they struggle to generate sufficient shareholder value to ensure their survival.

Both have differing management objectives and strategies. This module will consider the strategic issues facing both types of company and also consider their future roles, both individually and collectively.

  • The financial strategy of the IOCs
  • Why the IOCs have been struggling to generate shareholder value?
  • What are the future strategic options for the IOCs?
  • What are the prospects for another round of IOC mega-mergers?
  • What are the different types and strategies of NOCs?
  • How to measure the performance of NOCs?
  • What is the “national mission”?
  • What future directions might the NOCs take?

Sample Programme Day 4

Module 5 – Leadership and Change

Oil and Gas organisations face many strategic challenges including what type of organisation to be, where to compete, how to position against competition. However, implementing any strategy successfully requires a careful mix of leadership and management techniques throughout the organisation. Recent cases have highlighted that trade-offs need to be made and choices clearly communicated in all areas, but especially in the key challenges between safety, environmental and profitability issues. Add to that the challenge of working across cultures and different drivers being a leader in this industry becomes complex. This module will enable you think through these issues and to create some action plans for yourself and your real team members.

  • What are the main challenges in leading and managing people?
  • Leadership versus management – where should we invest our time?
  • The inevitability of change – how to keep focused on the changing environment
  • Creating the culture – demonstrating through action the balance between safety environmental and profit issues
  • How communication really happens
  • Working with different cultures
  • Action Planning

Module 6 – Negotiation Skills

Negotiation happens all the time, not just around commercial issues. Understanding your habits and choices in negotiation situations will help you to be more effective in building good relationships and creating solid agreements which benefit you, your colleagues, your company, your customers and your suppliers.

  • Principled negotiation (The Harvard Negotiation Project)
  • The negotiation range and establishing a strategy
  • Emotional Intelligence and handling dirty tricks
  • Identifying tradeable variables
  • Linking concessions – “if you… then we”
  • Your negotiation habits and your other options
  • Role play and feedback
  • Action Planning

Sample Programme Day 5

Module 7 – Long Term Issues for Oil and Gas

This will identify and discuss the key elements determining the international Oil and Gas operating environment in the next 20 years. In particular it will focus on the major structural changes which are taking place in terms of oil demand, supply and pricing as well as environmental drivers. In addition it will address issues arising from the shifts in relative power between the producers and consumers; East and West. What are the implications for your organisation?

  • Oil prices and the market – what happens next?
  • Is the supply squeeze real – can it be avoided?
  • How will oil demand adapt to supply limitations?
  • How will the industry structure change in the context of IOC/NOC relations
  • The growing internationalization of gas markets
  • Prospects for Oil and Gas in low carbon transition

Business Case Presentations

This module will run throughout the programme and is the opportunity for participants in small project teams to present a business case to a panel. Individuals will be encouraged to draw on the insight and learning from each of the preceding modules to inform thinking in formulating their business cases. The panel will be invited to listen to the final business case presentations from the project teams, question their thinking and then provide feedback and evaluation.

Recommended Trainer

Professor Paul Stevens BA, MA, PhD has been involved with the International oil and gas industry for over 35 years. In March 2009 he was presented with the OPEC Award in recognition of an outstanding contribution to the understanding of the international oil industry. He was educated as an economist and as a Middle East specialist at Cambridge University and the School of Oriental and African Studies in London. He has successfully combined an academic career with extensive consulting activity. He has taught at the American University of Beirut in Lebanon, the University of Surrey in England, Imperial College London and the IFP in Paris. He has been the professor of Petroleum Policy and Economics at the Centre for Energy Petroleum and Mineral Law & Policy, University of Dundee, Scotland, since BP created the Chair in 1993 and its currently Senior Research Fellow (Energy) at Chatham House (The Royal Institute of International Affairs) in London.

Paul has acted as a consultant to numerous clients including BP, Shell, Saudi Aramco, The World Bank, The Asian Development Bank the EU, and on a governmental level with China, Colombia, Japan, Lebanon, Papua New Guinea, Peru, Qatar, Romania and Saudi Arabia. He has also had considerable experience in running professional training courses, including those linking economic concepts with the practicalities of the international petroleum business and the impact of political factors. Such courses have been run in the US, UK, Netherlands, UAE, Papua New Guinea, Peru, Romania and Venezuela.