DESIGNED FOR
Operating managers, field personnel, project managers, technology managers, budget managers, or practically anyone in the company wanting to manage costs in a more efficient and effective manner.
A familiarity with finance is helpful but not required.
YOU WILL LEARN HOW TO
Identify the fundamental types of costs and the cost drivers
Understand the different cost classifications of energy companies
Trace all relevant costs to a single cost object for better managing costs
Determine and monitor the behavior of costs
Build your own Activity dictionary
Use sensitivity analysis of cost behavior for better decisions
Design management control system that actually works
Understand the principles of Activity Based Management (ABM) and its development and implementation
Determine the relevant information for decision making
Analyze capital projects using the proper tools and techniques
Use and misuse the budget
Manage or not mis-manage costs throughout the organization
Evaluate costs for effectiveness
ABOUT THE COURSE
Few problems threaten the petroleum businesses of the world today more than uncontrolled costs. In the last few years, competitive pressures have intensified and will continue to do so. Economic realities in the 21st century have made it necessary for most companies to operate with a “lean and mean” philosophy. Industries previously operating under regulatory rules which allowed them to pass on all costs to the customer now face a changed regulatory environment. As the price of our products fluctuates widely, the companies that are most vulnerable are those that are ineffective in understanding and managing their costs during such volatile time.
Historically energy companies have relied on the efficiency of their operations from pre-drilling activities all the way through well de-commissioning to drive company profitability. The ability to properly manage costs is now paramount in a company’s success and even their ultimate survival. As the energy industry goes through its most monumental changes since the 1970’s, those companies that can identify efficiencies and inefficiencies will be able to react to the challenges of the global market place, thus generating higher profits. The course will cover costs management from the basics to the most recent events and trends in these fast evolving topics, using relevant exercises, timely case studies and role playing techniques.
This seminar is an introduction to Practical Cost Management techniques and the potential for helping you better understand the underlying dynamics of cost, thereby facilitating better decision making concerning products and services, work flows, capital investments, as well as the day-to-day monitoring of your business.
One personal computer is provided, at additional cost, for each two participants.
COURSE CONTENT
Defining costs, classifications and terminology
Classifying costs
Determining cost objects, cost drivers and their behaviors
Assigning costs for an E&P company
Types of Cost management systems
Using value added costs versus non value-added costs for improvement
Developing an BPA for an E&P company
Building an activity dictionary
Operating Cost Management
Using the budgets efficiently and effectively
Support departments cost allocations
Measuring activities and their performance
Determining the break-even cost
Using variance analysis to monitor every line item of the budget
Measuring productivity and controlling it
Getting the most out of the supply chain
Capital Cost Management
Capital investment decision making and their effect on cost management
Developing and analyzing capital investment projects
Replace versus maintain
Life Cycle Costing
Analytical techniques for managing costs
Managing personnel, logistics, purchasing and material costs effectively
Performance Measurement
Using capacity management techniques to manage costs
Ratio analysis and non-financial measures
Economic Value Added™
Key Performance Indicators for the oil and gas industry
The Balanced Scorecard that works
What financial measures are critical and which are not
Raising your own cost management awareness