Funding Strategies for Oil, Gas, and Mining Projects

Introduction:

This course delves into the finance aspects of oil, gas, and mining projects, emphasizing the significant capital investments and risks involved. It aims to develop skills in evaluating financial options, sourcing funds, and managing financial risks, including price volatility in oil, gas, and mineral markets.

Participants will engage with case studies relevant to their organizations, exploring specialized financial instruments and strategies. The course also includes a module on multifamily real estate projects and governmental financing, enhancing understanding of material management systems for infrastructure projects.

Additionally, the course serves as a platform for discussing upcoming oil and gas finance conferences and exploring networking opportunities.

Objectives:

By the end of this course, participants will be able to:

• Understand the nature and effects of oil, gas, and mining projects on financial markets.
• Provide solutions specific to oil, gas, and mining projects.
• Explain factors affecting project financing in these sectors.
• Assess the financial and economic viability of projects.
• Recommend strategies to improve company finances.

Training Methodology:

• Lectures
• Case studies
• Financial simulations
• Group discussions
• Project work
• Workshops

Course Outline:

Unit 1: Oil, Gas, and Mining Projects

• Overview of oil, gas, and mineral resources and reserves
• Unique aspects of financing oil and gas projects
• Financial aspects of various projects in the oil, gas, and mining industries
• Market fluctuations: Oil, gas, and mineral pricing
• Strategic challenges in oil and gas financial services
• Structuring financing approaches for natural resource projects

Unit 2: Financing the Project

• Key sources of finance: Short term and long term
• Equity and debt structuring in oil and gas project finance
• Recourse vs. non-recourse finance
• Project finance approach in the oil and gas sector
• Role of Special Purpose Vehicles (SPVs) and involved parties
• Application of bond guarantees and letters of credit

Unit 3: Oil, Gas, and Mining Project Appraisal and Analysis

• Project selection methods aligned with strategic objectives
• Cash flow forecasting for funding operations and development
• Risk identification from projected cash flow
• Calculating the cost of funds, WACC, CAPM, and arbitrage pricing
• Capital investment appraisal techniques: Payback, ARR, NPV, IRR
• Advanced spreadsheet capabilities for financial appraisal

Unit 4: Project and Financial Risk Management

• Risk identification: Technical, logistical, environmental, economic, and financial factors
• Financial risk management techniques
• Sensitivity analysis and Monte Carlo simulation in financing
• Measuring risks and uncertainties
• Strategic price management in the oil, gas, and mineral sectors
• Derivative markets

Unit 5: Financial Evaluation of Oil, Gas, and Mining Projects

• Appraisal of project achievements against government and organizational objectives
• Methods and metrics for assessing financial performance
• Return on Equity (ROE), Debt Service Coverage Ratios (DSCRs), and Value for Money (VfM)
• Economic NPV and surplus from financing ventures
• Cost-benefit analysis and comparisons between financial and economic value
• Strategic financing requirements for future projects