Midstream/Downstream Petroleum Business

This virtual offering focuses on the midstream and downstream sectors of the petroleum value chain with emphasis on technical concepts, commercial analysis, and global petroleum products markets. A major part of the learning is achieved through team participation in a challenging petroleum business game where the participants, working in teams, must present their midstream and downstream project analyses and recommendations to their peers and mentors at the end of the week.

Additional information

Program Type

Location

Dates

September 20 – 23, 2021

$2,100

Who Should Attend

This program will benefit management, administration, and other specialists (technical, financial, legal, regulatory, and governmental) at all levels of petroleum industry experience who wish to broaden their knowledge of the sector and “best practices” of the petroleum business, focusing on the midstream and downstream sectors with emphasis on technology, commercial issues and petroleum products markets.

Lecture Content

Worldwide Petroleum Economics

Worldwide energy supply; demand; reserves; pricing: corporate strategy; recent history and prediction of future trends; how petroleum economists make predictions.

Petroleum Gas Pipeline Systems

Introduction to petroleum pipelines; design, construction, and operation of pipeline systems; estimating project costs; pipeline contracts and tariffs; new pipeline developments.

Markets for Associated Natural Gas

The natural gas value chain: industry structure and regional markets, inter-fuel competition; gas distribution; regulation and deregulation; economics and markets for gas, including combined-cycle power plants, LNG, ammonia, methanol, and gas-to-liquids.

Crude Oil Tanker Transportation

The tanker industry and market trends: an overview of the main characteristics of crude tankers; capital and operating costs; pollution at sea and the new regulations; calculating tanker transportation rates; world scale and charter arrangements.

Refining and Petrochemicals

Refinery: capacity evolution; technology changes; capital and operating costs; profitability; netback price estimation and recent trends. Petrochemicals in perspective: links to refining; key product families; industry drivers: cost of production, supply/demand; profitability and price forecasting; prospects for the future: maturity, environmental concerns, global competition.

Marketing of Crude Oil and Products

Development of the free market for oil; current international market structure; regional markets: physicals, futures, forwards, derivatives, options; roles of participants, price formation, price volatility; price reporting; crude oil and product pricing; negotiating and pricing petroleum sales contracts; introduction to hedging and price risk management.

Petroleum Industry Accounting and Taxation

Successful efforts vs. full-cost accounting; corporate taxation; petroleum taxation; accounting for host government and joint venture agreements; supplemental reserves reports included in annual reports.

Products Distribution

Distribution and retail marketing of petroleum products; structure of the margins realized along the distribution value chain; transitions in the marketing of transportation fuels; economics of the modern gasoline station.

Measuring Financial Performance

How companies report to their shareholders; GAAP principles; income statement; balance sheet; cash flow statement; equity statement; taxation and tax codes; preparing corporate financials; the audit; reading a major company annual report; measures of performance and the setting of company goals.

Workshop

Midstream/downstream Petroleum Business Game: Sandland

This business simulation is an integral part of the learning process. Participants, divided into teams, make real-life technical, financial, and market decisions that commonly confront managers in the international petroleum business today. Team performance is measured on a financial basis and is catalyzed by healthy competition.

The international midstream and downstream petroleum business game takes place in “Sandland,” a fictitious country on the west coast of Africa. Team objectives are to develop oil and gas markets for a previously discovered resource and allocate production accordingly. During each workshop session, teams are provided with technical and economic background that serve as basis for decisions to be made during that session. Team decisions are made and require a commitment of both capital and operating funds and occur over two years of market development and fifteen years of production.

Workshop Sessions Include:

  • Introduction to Project Simulation
  • Oil and Gas Pipelines and Port Facilities
  • Oil Tanker Analysis
  • Refinery Development Analysis
  • Markets for Associated Gas
  • Integrated Project Development Decision
  • Evaluation of Team Performance and
    Presentation of Results