Petroleum Budgeting and Performance Workshop - PBP

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Lewis Carroll once said "If you don't know where you are going, any road will get you there." Global oil and gas companies are becoming more and more complex in their operations and the projects are growing larger and more expensive. As prices and costs fluctuate widely in a matter of months, it is more important than ever to be able to create budgets and make plans that are accurate and flexible. The company's budget can either be its road map to success or its hindrance to excellence. Historically energy companies have relied on the outdated budget processes built solely to control costs and not manage operations. Costs should be tied to revenues to insure that the company is achieving its greatest potential and highest level of success. The ability to properly create and manage the operations through the company's budgets and plans is paramount in the 21st century oil and gas company. This seminar is an introduction to Budgeting and Planning techniques designed to help the participant better understand the underlying dynamics of operational inputs and how they determine performance, which should eventually lead to better decision making concerning products and services, work flows, capital investments, as well as the day-to-day monitoring of the business.One personal computer is provided, at additional cost, for each two participants.

Operating managers, field personnel, project managers, technology managers, cost control personnel, budget analysts, financial analysts, department managers, or anyone in the company dealing with budgets, planning and performance analysis.A familiarity with financial concepts is recommended but not required.

You will Learn:

Participants will learn how to:

  • Introduce and understand budgeting concepts
  • Understand the different budget classifications
  • Determine the inputs and monitor the budgets
  • Trace all relevant inputs to the proper object identifier to better manage budgets
  • Build your own budget
  • Properly define Key Performance Indicators (KPI)
  • Design budget management control system that work
  • Understand the principles of zero-based budgeting and its development and implementation
  • Determine the relevant information for decision making
  • Use sensitivity analysis of budgets and their behavior
  • Determine root causes of budget variances using the proper tools and techniques
  • Use and misuse the budget
  • Manage and not mismanage costs
  • Develop tools to use for managing costs
  • The key tools for budget presentation for greater effectiveness

Course Content:

  • Defining the budget terms, classifications and terminology in an oil and gas sense
  • Classifying the different budgets, OPEX, CAPEX, Revenues, Cash budget
  • Tools and techniques for determining inputs to the budget process
  • Analyzing different types of budget management systems
  • Tying costs to revenues to more effectively measure performance
  • Determining the break-even cost and volumes
  • Using the budgets efficiently and effectively
  • Budget monitoring tools and approaches
  • Using variance analysis to monitor every line item of your budget
  • Budget estimation techniques
  • Operating Budget Management - Determining the inputs for the different operating budgets
  • Using different techniques to create the budgets
  • Using non-financial measures to make the budgets more effective
  • Support departments budgets
  • Developing budget standards
  • Optimizing the budget process
  • Capital Budget ManagementWhat makes up the capital budgets
  • Approval processes
  • Developing and analyzing capital investment projects
  • Replace versus maintain
  • Analytical techniques for managing costs
  • Sensitivity Analysis for optimizing costs
  • Using scenario analysis to more effectively manage budgets
  • Earned Value Management (EVM)
  • Cash Budget Management - Tie the budgets together to build the cash budget
  • Analyzing capital investment projects
  • Tools for adjusting the cash budgets
  • Performance Measurement - Key Performance Indicators characteristics
  • Developing Key Performance Indicators (KPI)
  • Analysis incorporating financial and non-financial measures
  • Leading and lagging indicators
  • The Balanced Scorecard that works
  • Evaluation of performance measures
  • Benchmarking
  • Raising your own performance management awareness

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