« Back to course list

Budgeting & Cost Management (FIN08)


    This 3-day workshop will provide a comprehensive understanding on the nature of costs and cost drivers in the E&P industry providing in-depth understanding on the budgeting process, proactive management, effective control and optimization of costs together with focused and relevant performance reporting.

    Course Level: Foundation / Skill
    Duration: 3 days
    Instructor: Matilde Giulianelli

    Designed for you, if you are...

    • Finance staff with accounting and financial management responsibilities
    • Professional responsible for devising budgets, managing and controlling budgets
    • Professional engaged in planning, budgeting and management reporting
    • Finance & Audit staff engaged on cost and financial controls
    • Business unit manager and personnel whose responsibilities include cost management, controlling budgets and performance reporting

    How we build your confidence

    The course uses a combination of instruction, group discussions, practical examples and exercises to ensure attendees absorb both the theory and the practical application of the topics.

    The benefits from attending

    By the end of the course you will feel confident in your understanding of:
    • The nature of costs and cost drivers in the E&P industry through the field life cycle
    • Purpose of the budget. Planning and budgeting models. The strategic and medium-term plan.
    • Using budgets to make effective decisions. Prepare and understand costs in planning, budgeting & forecasting processes e.g. fixed / variable, CAPEX / OPEX and routine / non-routine.
    • Cost accounting. Importance of timely cost capture and accurate recording e.g. VOWD / accruals, consistency of coding and clarity on accountability
    • Strategic solutions in delivering cost optimization – “do more for less”
    • Management of costs in PSC and JV environments. Avoiding cost leakage and ensuring audit preparedness
    • Cost control framework - budgets, AFEs, progress reports and variance analysis. Understanding key components and ensuring seamless interaction
    • Cost performance reporting - use of KPI’s, variance analysis and trend analysis. Tracking and monitoring cost optimization initiatives and targets


    Overview of E&P Industry Costs
    • Features of E&P industry and nature of costs
    • Costs and cost drivers through the field life cycle
    • The cost curve and relationship to the oil market
    • Significance of management and reporting of costs in the context of the oil & gas industry

    The Planning and Budgeting process
    • Company vision and strategy. Long-term and medium-term planning
    • Work programmes and budget. Purpose of a budget and various budget models.
    • The role of corporate departments and geographical business units in the budgeting and forecasting process.

    Cost Planning, Budgets and Forecasting
    • Preparing budgets & forecasts in a volatile oil & gas industry
    • Capture and understanding of costs in the planning and budget processes
    • Preparation of CAPEX (facilities / wells), OPEX and G&A budgets
    • Understanding the importance of classifying cost: fixed / variable; routine / non routine; core / discretionary activities
    • Use budgets to make effective decisions
    • The importance of forecasting – the “how & why” and the need to proactively capture different outcomes
    • Budgeting and forecasting as a non-operator in a JV

    Cost Capture & Accountability
    • Importance of principles & processes in accurate and timely capture of costs
    • Cost accounting models. Understanding cost structures, accountability and coding principles
    • Principles on what and when to capture e.g. VOWD and accruals
    • Capturing costs e.g. completion of full well costs and allocation of costs

    Strategic Solutions to Cost Management
    • Understanding “doing more for less” principle on cost optimization
    • Getting behind cost drivers and understanding requisite actions
    • Understanding how different costs impact profit - break even analysis
    • Benchmarking and how it can drive improvements
    • Managing working capital and cash flow

    Cost Control and Management in a PSC & JOA Environment
    • Overview on principles of cost recovery in a PSC environment
    • Importance of adhering to key processes to avoid cost leakage
    • Understanding principles of a JOA and accounting procedures
    • Importance of preparedness for cost audits and key areas of contention

    Cost Control Framework
    • Overview of a cost control framework
    • Mechanisms for controlling costs: well costs and features of an AFE
    • Project costs reporting – key elements of progress reports
    • Cost control reports – approved, invoiced, committed and incurred cost
    • Controlling costs (fixed and variable) against budgets and forecasts

    Cost Performance Reporting
    • Reporting of CAPEX and OPEX costs highlighting key drivers
    • Variance analysis providing root cause analysis and early warning
    • Performance review reporting on cost initiatives and optimization targets
    • Overview of KPIs and performance reporting

    Customer Feedback

    "Excellent course, highly recommend the course for all engineers." - Engineer at Oxy

    "The program of the course is very useful for people who are familiar with costs and budgeting." - Plants Operator at Oxy

    "The instructor is very knowledgeable and has very good interlink with operational examples which made the course exciting and fruitful." - WTP Supervisor at Oxy

    "Highly recommend this course to my colleagues." - Cost Analyst at Oxy



      © All rights reserved
      HOT Engineering GmbH   Tel: +43 3842 43 0 53-0   Fax +43 3842 43 0 53-1   hot@hoteng.com