The Course Covers:
- The evolution of petroleum fiscal systems
- Taxation; how to calculate and how to model it
- Sliding scale Royalty mechanisms
- Capital allowance and depreciation methods
- R-factor and rate of return systems
- Economics fundamentals (discounting, NPV, IRR, Expected value etc)
- Government fiscal take calculations and global comparisons
- How to model petroleum fiscal systems in Excel
Plus numerous case studies and a tax and Royalty fiscal system modelling workshop
Course Objectives:
This brand new course has been introduced in response to industry demand for training in fiscal systems with an emphasis on how to model the complex algorithms in Excel™. It covers in detail the main elements of tax and Royalty fiscal systems (including sliding scales, r-factors, depreciation, capital allowances etc). The course has a global outlook where numerous worldwide examples will be drawn on and fiscal take comparisons made. Underpinning any fiscal model are economic valuation principles. Therefore concepts including discounting, net present value, and expected value will also be studied. This course brings the theory to life, allowing delegates to build and interpret their own tax and Royalty fiscal model based on a real life example.
Who Should Attend:
- Petroleum Economists
- Business Development, Asset and Commercial Managers
- Lawyers involved in the industry
- Analysts working in energy groups within the financial services sector
- Geoscientists and Engineers
- Finance personnel working in the industry
- Auditors working in the industry
Day 1
An Introduction to Upstream Economics & Upstream Fiscal Systems
- The history and evolution of petroleum fiscal systems
- The tax/royalty system legal and fiscal framework
- The tax/royalty flowchart, content and format
The Fundamentals of Upstream Economic Analysis
- Discounted cashflow
- Discount rate, discount factor and discount method
- The cost of capital and the hurdle discount rate
- Capital budgeting techniques (NPV, IRR, DPIR, Payback)
- Valuing an asset, making development and investment decisions
- Inflation, cost escalation, real vs nominal cashflows
- Managing risk
Day 2
Royalties
- Government Royalties
- Sliding scales including R-factor
- Overriding Royalties
- Net profit Interests
- Royalty calculation and examples
Case studies: Namibia, Brazil, Australia, Venezuela, Argentina, India
Corporate Income Tax
- Depreciation methods
- Capital Allowances
- Chargeable income
- Double taxation and tax treaties
- Tax losses
Case studies: UK, Poland, Netherlands, Thailand, Norway, Tunisia, Australia, Nigeria
Field and Profit Taxes
- Origins of field and profit based taxes
- Allowances and rates
Case studies: UK, Norway, Denmark, Netherlands, Ghana, Nigeria, Angola, PNG, Australia, Brunei, Pakistan, Brazil, Venezuela
Sliding Scale Fiscal Mechanisms
- Production rate
- Production volume
- R-Factor and Rate of return methods
- Step versus incremental methods
- Sliding scale calculations and examples
Case studies: Romania, Faroes, Tunisia, Nigeria
Other Taxes
- VAT
- Withholding tax
- Import/Export Duty
- Environmental taxes
Case studies: Norway, UK, Algeria, Australia
Day 3
Ring Fences
- Taxation ring fence
- Ring fence calculations and examples
Case studies: UK, Faroes, Denmark, Australia, Italy, Ireland, Angola
The Economics of PSC’s
- Investor cash flow
- Government cash flow
- Carried Interests
- Comparison with Production Sharing Contract systems (Cost Recovery, Profit Share, Entitlement)
- Global fiscal take comparisons
Case studies: UK, Namibia, Ghana, Bahamas, Algeria
Fiscal Modelling Workshop
- A economic modelling workshop modelling the fiscal terms in Microsoft Excel™
- Understanding the fiscal structure & algorithms of the UK fiscal system
- Determining the field, economic & fiscal data and building the input decks
- Step by step construction of the economic model
- Running the economic cases & evaluating the results
- Analysis of the sensitivities
- Model solution provided to delegates
Recap the course
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Colin Howard
Colin Howard is a consultant petroleum economist, specialising in the evaluation, fiscal modelling, and risk analysis of hydrocarbon projects. He has extensive experience in modelling a wide variety of hydrocarbon taxation regimes and production sharing contracts throughout the world, as well as undertaking strategic studies utilising decision analysis and portfolio techniques.
Prior to establishing his own consulting business, he worked with Schlumberger Plc, providing software support and modelling services to international oil and gas companies. Originally trained as a geologist, he holds MSc degrees in structural geology from the University of Pennsylvania and in Mineral Project Appraisal from Imperial College London.
In addition to routine asset evaluation work, his recent projects have involved economics systems analysis, working in particular on the interface with other business processes such as financial and reserves reporting and portfolio systems.
Colin has experience of delivering a wide variety of academic and professional development courses in the field of petroleum economics, modelling and risk analysis. As well as delivering courses to upstream professional staff, he is a guest lecturer on the Energy Finance MSc program at Imperial College Business School.
Courses run by this instructor
Interested in holding this course in-house? Please fill out your details and a member of our team will be in touch with more information.
26-28 Nov 2012 (London, UK)
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25-27 Jun 2012 (London, UK)
17-19 Dec 2012 (London, UK)
This Petroleum Company Performance Management training course has been designed to offer personnel from corporations and financial institutions a full complement of tools to use most effectively in developing and analysing the corporate performance measures for oil and gas companies.
20-24 Aug 2012 (London, UK)
This Euromoney Energy Training course provides a comprehensive overview of the oil and gas industry from upstream exploration and production to downstream refining, sales and marketing. You will gain an appreciation of industry dynamics and the key issues affecting its development and future. This course will provide a thorough foundation for understanding the changing industry dynamics.
17-19 Oct 2012 (London, UK)
13-15 Feb 2013 (London, UK)
This Euromoney Energy Training course provides a comprehensive overview of the oil and gas industry from upstream exploration and production to downstream refining, sales and marketing. Under the guidance of our expert course faculty, participants will gain an appreciation of industry dynamics and the key issues affecting its development and future.
10-12 Jul 2012 (London, UK)
This 3-day Euromoney Energy Training course will give you an in-depth understanding of the problems and solutions in unit formation, negotiation of participation factors and operating agreements. The role of governmental agencies in consent and oversight will also be discussed.
12-15 Jun 2012 (London, UK)
11-14 Dec 2012 (London, UK)
This practical Euromoney Energy Training course will enable delegates from all technical and commercial disciplines to understand the theories and methods used to value oil and gas prospects. The four-days will reveal the fundamental aspects of upstream petroleum economics and risk analysis. Through computer-based exercises, participants will construct economic models, incorporating relevant cash flow data for case study projects and scenarios.
10-12 Oct 2012 (Singapore, Singapore)
This course explores the structure and mechanisms of production sharing contracts (PSC's) for upstream oil and gas projects. Studying the underlying processes and commercial drivers, participants will examine case studies to illustrate the economic structure of these complex agreements.
17-20 Dec 2012 (Dubai, United Arab Emirates)
This 4 day International Oil & Gas Contracts course is specifically designed for professionals involved internationally in the oil and gas industry, it offers a unique opportunity to rapidly increase your understanding of the legal issues involved in various UK and international scenarios and to improve your techniques and skills in drafting a variety of international contracts.
23-25 May 2012 (Rio de Janeiro, Brazil)
This course explores the structure and mechanisms of production sharing contracts (PSC's) for upstream oil and gas projects. Studying the underlying processes and commercial drivers, participants will examine case studies to illustrate the economic structure of these complex agreements.
29-31 Oct 2012 (London, UK)
This course is designed for professionals who need to develop an understanding of the unique aspects of the energy industry, including the oil and gas commercialisation and business development or facilities evaluation and commercialisation.
The course will focus on the skills required in evaluation (both buyside and sell-side), financing, acquisition, and exploitation planning for an oil and gas entity, a midstream facility or electrical generation plant.
11-13 Sep 2012 (London, UK)
This course explores the structure and mechanisms of production sharing contracts (PSC’s) for upstream oil and gas projects. Studying the underlying processes and commercial drivers, participants will examine case studies to illustrate the economic structure of these complex agreements.
22-24 Oct 2012 (London, UK)
This 3 day Upstream Oil and Gas Acquisition and Divestment course will explain how upstream oil and gas assets are traded from both buyer and seller perspectives.
The course includes references to failed and successful deals and provides valuable insight into how to conclude successful transactions.
The principles of Licensing Rounds, Farm In and Farm Out processes are explored as well as key industry processes underpinning these transactions. It includes assessment of case studies, and an element of group work based on an “acquisition and divestment opportunity” where buyers and sellers meet to consider an opportunity and to “close a deal”.
12-15 Nov 2012 (Singapore, Singapore)
The Energy Risk Management: Mastering Volatile and Complex Markets course is a comprehensive and systematic introduction to risk management for complex energy markets. The course will detail why and how risks in energy – particularly gas and electricity - are more acute than in other traded market sectors, and how classic risk management techniques must be adapted and extended to meet these demanding conditions.
1-5 Oct 2012 (Singapore, Singapore)
This 5-day course is a comprehensive review of the key features of upstream management ranging from exploration and development through to production and transportation. The course will benefit attendees who wish to broaden and deepen their upstream management skills
16-19 Jul 2012 (London, UK)
People coming to energy risk management for the first time are taken aback by the extreme market conditions that are commonplace in the complex markets of oil, coal, and above all, gas and electricity. Levels of volatility and basis risk are unprecedented: and there are additional risks that are unique to energy. This course shows delegates how to deploy traditional risk management tools in the challenging context of volatile energy markets, and to extend these techniques to master the unique risk characteristics of gas and electricity.
19-21 Sep 2012 (London, UK)
This 3 day course concentrates on a review and analysis of energy trends over the next 20 years. While predicting future energy trends can be fraught with uncertainties, attention is given to reviewing and analysing a variety of key market drivers, applying sensitivities and discussing probable outcomes.
21-23 Nov 2012 (Lagos, Nigeria)
Attend this practical and interactive three-day training course and enhance your knowledge in the following key areas: The fundamental economic principles underpinning production sharing contracts (PSC’s); The history and evolution of production sharing contracts (PSC’s); The PSC structure, content and flowchart; Cost recovery, profile share, bonuses, sliding scales; Royalty and Taxation; Ringfencing; Key economic issues in PSC negotiations and bidding, featuring: Nigeria PSC economic modelling workshop, The economic impact of the Petroleum Industry Bill (PIB) and Global case studies
11-14 Jun 2012 (London, UK)
For operator drilling contractor and service company personnel that desire a specialised familiarisation, understanding and comprehension of Deepwater Drilling Operations, equipment, processes, systems and activities.
25-29 Jun 2012 (London, UK)
This 5-day course is a comprehensive review of the key features of upstream management ranging from exploration and development through to production and transportation. The course will benefit attendees who wish to broaden and deepen their upstream management skills.
16-19 Jul 2012 (London, UK)
4 days of course modules that focus on the review and examination of the key elements of the supply chain from upstream activities of exploration, development and production through transportation to downstream sector that involves trading, refining, petrochemicals and final distribution to the consuming markets.
5-8 Nov 2012 (Hong Kong, Hong Kong)
4 days of course modules that focus on the review and examination of the key elements of the supply chain from upstream activities of exploration, development and production through transportation to downstream sector that involves trading, refining, petrochemicals and final distribution to the consuming markets.
20-22 Aug 2012 (Hong Kong, Hong Kong)
This course is designed for professionals who need to develop an understanding of the unique aspects of the energy industry, including the oil and gas commercialisation and business development or facilities evaluation and commercialisation.
The course will focus on the skills required in evaluation (both buyside and sell-side), financing, acquisition, and exploitation planning for an oil and gas entity, a midstream facility or electrical generation plant.
8-10 Oct 2012 (Singapore, Singapore)
This Euromoney Energy Training course examines the roles of benchmarking and performance monitoring through key performance indicators and the analysis of business models.
25-29 Jun 2012 (London, UK)
Featuring 3–individually bookable modules:
- Upstream development & production
- Mid-stream pipelines & LNG projects
- Downstream oil refineries & petrochemical plants
- Including: 16 key industry case studies to improve your understanding
24-27 Sep 2012 (London, UK)
22-31 Oct 2012 (Hong Kong, Hong Kong)
20-23 Nov 2012 (Singapore, Singapore)
For operator drilling contractor and service company personnel that desire a specialised familiarisation, understanding and comprehension of Deepwater Drilling Operations, equipment, processes, systems and activities.
12-14 Nov 2012 (Hong Kong, Hong Kong)
This 3 day course concentrates on a review and analysis of energy trends over the next 20 years. While predicting future energy trends can be fraught with uncertainties, attention is given to reviewing and analysing a variety of key market drivers, applying sensitivities and discussing probable outcomes.
12-15 Nov 2012 (Singapore, Singapore)
14-16 Nov 2012 (Almaty, Kazakhstan)
This course explores the structure and mechanisms of production sharing contracts (PSC’s) and the economic principles that underpin them. Studying the underlying processes and commercial drivers, participants will examine case studies to illustrate the economic structure of these complex agreements.
17-21 Sep 2012 (London, UK)
This 5-day course is designed to introduce both lawyers and nonlawyers alike to the theories and practice of international commercial and investment arbitration in the oil & gas industry.
This course has now expired please email us to find out when the course will next be running.