Cost Engineering, Financing and Risk Management

COST ENGINEERING, FINANCING AND RISK MANAGEMENT IN UPSTREAM OIL & GAS PROJECTS

24 – 26 August 2015 | Kuala Lumpur | Malaysia

Your Expert Course Director:

JAYEMS DHINGRA Principal Consultant FSIArb, FCIArb, M.S.I.D, MBA, M. Tech (Knowledge Engineering), M. Sc. (Maritime Studies) B. E. (Elect), Ist Class CoC (DOT, UK)

www.petroEDGEasia.net

Conduct this training course in-house for more effective savings!

Call us at +65 6741 9927 or email to [email protected]. For more information, visit us at www.petroedgeasia.net

Cost Engineering, Financing and Risk Management in Upstream Oil & Gas Projects 24 – 26 August 2015 | Kuala Lumpur | Malaysia

The two elements which consistently remain at the forefront of every project or an assignment are “Cost” and “Time”. The mechanics of capturing cost can be a challenging task. Project leaders are expected to provide a realistic, reliable and risks adjusted projection of a project’s performance. This 3 day training course with in-built workshops is developed to assist you walk-through the engineering formulas and equations to become a “professional” in managing estimates, projections, risks, uncertainties and secure financing for high value, high risk projects for both On-shore and Offshore Oil & Gas industry segments. Objectives This course is developed for the participants to gain comprehensive understanding of the field of Cost Engineering and its impact on the project financing and risk management. The underlying objectives are: Enhance familiarization with mechanics of cost engineering in developing Project Cost Models;

Gain understanding of diversity in cost modelling in context of Offshore and Onshore Oil & Gas projects;

Identify risks associated with cost estimates and costing elements, with an objective of minimizing the exposure;

Appreciate the correlation between cost and schedule, resulting in the delivery of contractual obligations; and

Develop competency to manage risks of costs and time overrun, by implementing appropriate cost control mechanism.

Expected Learning Outcomes It is expected that the participants through coursework, lectures and sharing of experiences by hands-on workshop, would have learnt: How to create cost management models with built-in, measurable, real-time progress monitoring transmitters;

Ability to fine-tune cost and schedule for mitigating contract risks;

Able to use various tools in getting the most optimum cost and schedule mix through simulations and iterations;

Capability to produce well supported propositions to arrange external financing and satisfying the requirements of Banks and Financial Institutions;

How to implement the cost control strategies and allow for variations and manage unscheduled events or geo-political developments;

Good understanding of key aspects which provide differentiation between offshore and onshore projects, so as to modify the cost models accordingly; and

Good understanding of the underlying cost engineering concepts, principles and methodologies being adopted in Oil & Gas projects.

Who Must Attend? If you are responsible are engaged in Oil & Gas Industry undertaking one or more of the following functions, you can’t afford to miss this course: Management Accountants, Finance Managers, Cost Controllers, Project Directors, Contracts & Projects Managers, Estimators, Planners and Risk Managers.

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COURSE OUTLINE

DAY 1 COST ENGINEERING PRINCIPLES

OVERVIEW OF COST MODELS AND STRUCTURE Source Based Costing Models

Activity Based Costing Models

System or Process Based Costing Models

PSC, JVA & Consortium Members Costing Model

Financing and Costing Structure Correlations

CORRELATION BETWEEN COST AND SCHEDULE Fixed and Variable Costs

Time Dependent Costs

Variable Costs as a function of Time

Resource and Schedule Based Costing

Impact of Market Variables with Time

Planned vs Actual “S Curves”

Plotting Cost Commitment, Cash flow, Progress and Schedule

BUDGETING AND COST CONTROL SYSTEM Overview of Cost Engineering Terms, Concepts and

Methods

Estimation Techniques,

Managing Risks of Estimation Errors

Cost and Schedule Simulation Techniques

Role of Monte Carlo Simulation Applications

Establishing Budgets and Variance Range

Control Mechanism for Budgets and Costs

PROJECT FINANCING STRATEGIES AND COSTING REQUIREMENTS Quality of a Project Budget and Influence on Financing

Strategies

Project Valuation Models

Objectives of Financing

Internal and External Financing Models

Security for Payment and Rights of Owners

Influence of Expected Payment Streams and Commercial Obligations

Assessment Methodology for Project Viability

CASE STUDY – 1: IMPACT OF CURRENCY FLUCTUATIONS Analysis of Currency Exchange Rate Fluctuations on the Project Cost and Financing Arrangement Delegates in Groups will review the impact and develop suitable modifiers in the Costing Model provided.

DAY 2 APPLICATION ON OFFSHORE RIG-BUILDING PROJECT

DEVELOPING A COSTING AND BUDGETING MODEL FOR ON OFFSHORE RIG Selecting the Estimation Methods

Interpreting Contractual Obligations and Impacts on Cost, Resources and Schedule

Commonly Experienced Variations

BQ, Proprietary Equipment, Processes and Activity Based Estimation

Allocation of Budgets and Performance Measures

COMPARATIVE ANALYSIS OF COSTING MODELS Outsourcing Strategies Based Estimates

SCM Strategies Based Costing

Distributed Fabrication and Assembly Locations

Testing, Commissioning and Trials Costing

M5 Costing Model

INTEGRATION WITH PERFORMANCE MONITORING AND VARIANCE CONTROL MECHANISM Scope and Works Variations Control and Costs Management

Budgets and Variance Management

Review Mechanism of Performance Indicators with Cost Impact

Budgets and Performance Related Variances

Strategic Impacts on Costs due to Performance Variances

COST ENGINEERING RELATED RISKS IDENTIFICATION AND MITIGATION STRATEGIES Unique Risks vs Systemic Risks

Economic Risks – Local & Global Markets

Political Risks of Host State and Sanctions

Evaluation of Environmental Risks

Credit Risk Evaluation

Syndicated Financing and Cost of Financing

Insurances and Costs of Insurance

CASE STUDY – 2: SCHEDULE RELATED RISKS Review the possibility of simulating impact of risks due to late commencement and or late delivery of capital equipment. Groups based workshop on managing a time critical project with high risk of loss of charter if delivery of the Rig is delayed.

Sessions commence at 9am on all days, with short intervals at 10.30am and 3.30pm respectively with light refreshment. Lunch will be provided at 12:30pm for 1 hour. Sessions will end at 5pm on all days.





DAY 3: APPLICATION FOR ON-SHORE OIL & GAS INFRASTRUCTURE PROJECT

ESTIMATION OF COSTS, BIDDING AND CONTRACT NEGOTIATION Estimation Strategies: Turnkey, Lump sum, Cost-plus or Breakdown of Scope

Front-end Loading or built-in variables for additional costs and claims

Tender Based vs. Total Cost of Ownership Evaluation

Operations, Maintenance, Repairs and Spares Costs

Project Management Costs

Additional Costs Forecasting and Trend Analysis

Contracting Strategies and Risks of Assurance in Cost Estimates WORKSHOP-1: APPLYING COST ENGINEERING PRACTICES FROM BIDING TO HANDING-OVER STAGE IN AN OIL & GAS PIPELINE PROJECT In an international Gas Transportation Pipeline project which is to be executed in parallel at different geographical locations, the costing model can be quite complex. A project brief with tender bid cost breakdown schedule will be provided as a reference. In this workshop the delegates shall analyse and capture various stages of costs and strategically develop the cost management model. The following may be deliverables of the workshop: Estimation Model

Budgeted Costs and Earned Value Plan

Variations Monitoring and Control Process

Contingency Plans to arrest Cost Overruns

Total Project Cost and Value Added by Cost Engineering Practices INTERNATIONAL PRACTICES AND GUIDELINES FOR TOTAL COST MANAGEMENT Forensic Analysis of Costs and Schedule Variations

Planning for Recovery of Lost Time and Costs

Evaluation of Breaches of Contract, Types of Breaches and Consequences of a Breach

Sharing Cost Overruns between the Parties and Stakeholders

Budgeting for Project Rescue and Recovery Operations after major deviations

WORKSHOP-2: REVIEW OF VARIATIONS CLAIMS, COUNTERCLAIMS AND BACK-CHARGES In this case study based on an Offshore/Onshore Drilling Contract brief, the delegates will review the variations computation method, claims procedure and possibility of budget reviews. Implement the principles and recommended practices of cost and schedule forensic analysis. The delegates will be expected to deliver one or more of the following based on highly contentious and delayed project: Schedule Recovery Plan

Cost Overrun Financing and Rescue Plan

Forensic Analysis tools to allocate costs and risks between the parties liable

Implementation strategies for the proposed recovery plan

Assurance in the Effectiveness of the Proposed Recovery Plan

Sessions commence at 9am on all days, with short intervals at 10.30am and 3.30pm respectively with light refreshment. Lunch will be provided at 12:30pm for 1 hour. Sessions will end at 5pm on all days.





About your Expert Course Director: Jayems Dhingra Principal Management Consultant FCIArb, FSIArb, M.S.I.D, MBA, M. Tech (Knowledge Engineering) M. Sc. (Maritime Studies) B. E. (Elect), First Class CoC (DOT, UK)

Jayems Dhingra is the principal consultant, specialising in the oil & gas industry segments of

offshore & marine, and onshore E & P projects. Over a 38 year period, Jayems has worked and consulted among other industries, longest with the marine asset owners / operators, heavy engineering & construction industries. The industry verticals are encompassing major oil and gas EPCIC contractors, engineering construction yards, Ship owners and Shipyards engaged in offshore systems fabrications & Ship Repairs in Asia and Europe. His consulting experience includes Business Process Re-engineering, diversifications, corporate development, marketing, project management, feasibility studies and market research.

In the recent past Jayems has been associated with the development of a “Heavy Engineering EPCIC Contractor” from within a traditional Shipyard. He played a lead role in the development of the Project Management Systems, Marketing Plans, Supply Chain Management, Subcontractor administration, employee development and new products development related initiatives, besides expansion to be a recognized FPS conversion yard and the specialist yard for repairs of LNG Tankers.

Jayems has served as General Manager / Consultant with major Shipyards and had also held positions of Managing Director, General Manager, and Senior Manager with the companies from construction industry (M & E segment), heavy engineering fabrications, manufacturing, and marine & offshore services. He was responsible for the projects related to the works on Offshore Vessels refurbishment, FPSO Conversions, Gas Tanker Repairs, Process Modules engineering, Lateral Gas/Oil Pipelines’ and other construction related works.

As a result of the wide exposure to complex and multiple mega projects, Jayems has developed special programs in managing multiple geographically dispersed international projects.

Jayems has also worked as consultant to the clients from Petroleum Industry, Owners of Oil & Gas Tankers, Dry Bulk, Drill Ship and the OSV fleets, for strategic planning. The consultancy assignments include, due diligence, resolving various operational issues, contracts reviews, cost controls, project management matters and enhancement of procurement systems. He has successfully assisted offshore E & P clients in managing contractual disputes of various international contracts and upgrading / conversion projects.

Jayems graduated with a Bachelor’s degree in Electrical Engineering, MBA in General Management, Master of Technology in Knowledge Engineering and Master of Science in Maritime Studies. He holds professional qualifications in international arbitration, mediation and ADR methods. He also holds the Chief Engineer’s First Class Certificate of Competency (Marine) from DOT, UK.

Jayems is further qualified and experienced for appointments as Arbitrator and is admitted to the panel of arbitrators with KLRCA, Malaysia, DIAC, Dubai, (UAE), and SISV, Singapore. He is also registered as an arbitrator with Hong Kong International Arbitration Centre (HKIAC) and Qatar International Arbitration Centre (QIAC). He undertakes assignments of contract reviews, dispute resolutions and ADR matters.

Jayems is registered as Fellow, Singapore Institute of Arbitrators (‘FSIArb’), ‘Fellow’, Chartered Institute of Arbitrators, UK (‘FCIArb’), Member, Association of International Petroleum Negotiators (AIPN, USA), Member, Singapore Institute of Directors (M.S.I.D.), Member Singapore Chamber of Maritime Arbitrations and Member, Maritime Law Association of Singapore.

Testimonials about Jayems Dhingra

“Jayems is a good consultant and very professional and

knowledgeable, he raised my interest in knowing more into

maritime laws” Senior Buyer, Bibby Offshore

“Superb presentation by Jayems Dhingra. Definitely a Guru!!!” Head

of Marine Audit, Icon Offshore

“Knowledgeable & experienced trainer. A very practical approach to understanding OSV chartering & CP Management” Asst Loading Master,

Shell Phillipines Exploration BV

“Great and knowledgeable course with experience trainer” Assistant

Project Financial Analyst, Oceancare Corporation Sdn Bhd

“This training course exceeded my expectation. Mr Jayems is very

effective & answer our questions with simple & easily understood.

One word ‘Superb’ “ Marine Captain,

Sarawak Shell

“Jayems is an obvious world class expert in Maritime Law Y & C/P

Management. He has prepared an excellent course of sessions and

genuinely tried to pass his experience to attendants. Anyone in OSV Chartering Business will benefit greatly from attending this course.”

Assistant Contracts Manager, Maridive & Oil Services

“The course has been made successful specifically because of the experience, knowledge and patience of the speaker, Mr Jayems Dhingra”

Group Legal Counsel Amsbach Marine Singapore

“ Knowledgeable and experienced trainer, conducted in an informed manner makes it an enjoyable and

very informative course” Team Leader Drilling Services,

Murphy Oil Corporation

For more information and testimonials, visit us at

www.petroedgeasia.net


http://www.petroedgeasia.net/




petroEDGE® delivers energy industry skills-based training courses in major cities around Asia, catering for every stage of your organisation’s development path. Since our inception, we have provided wide range of management development training, business strategy and technical skills training courses to over 100 leading international corporations and government establishments. Our growing client profile:

Almansoori Wireline Services (Thailand) Maersk Drilling PT Perusahaan Gas Negara

Arabian Bridge Company for Oil Services Maersk Oil Qatar PT PLN (Persero) Kantor Pusat

Asetanian Marine Pte Malakoff Corporation Berhad PTT Exploration & Production

Bangladesh Oil, Gas & Mineral Corp Malaysia LNG PTTEP International Limited

Bergen Group ASA Malaysia Marine & Heavy Engineering PTTEP Iran Company Limited

BG Exploration and Production India Malaysia-Thailand Joint Authority PTTEP Oman Company

BJ Services Company Middle East Media Chinese International PVD Offshore Services Co.

BP Exploration & Operating Vietnam Mid-Continent Equipment Group Pte Ranhill Engineers & Constructors

BP Exploration Operating Company MISC Berhad Rhodia Asia Pacific Pte

BP Indonesia / Singapore & Vietnam Mitsui Oil Exploration Co. Repsol

Brunei LNG MMS (Insurance Brokers) Royal Norwegian Embassy

Brunei Petroleum Murphy Oil Corporation Sabah Shell Petroleum Co

Brunei Shell Petroleum Co National Healthcare Group Sapura Energy

Cairn Energy India Pty Nations Petroleum (SE Asia) Sapuracrest Petroleum Berhad

Carigali Hess Operating Co. Newfield Peninsula Malaysia Inc. Sarawak Shell Berhad

Carigali PTTEPI Operating Company Nipon Oil Exploration (Malaysia) Saudi Arabian Oil Company

CGG Veritas (M) Oceaneering International Saudi Basic Industries Corp

Charnavon Petroleum Offshore Geo-Surveys Schlumberger Oilffield (S) Pte

Chevron Asia South Optimal Chemicals (M) Scomi Oiltools

Chevron Thailand E & P Optimal Olefins (M) Shell Eastern Petroleum

CNOOC PC Vietnam Shell MDS (Malaysia)

Cuulong Joint Operating Company PCPP Operating Company Shell Saudi

Det Norske Veritas (DNV) As Pearl Energy (Nam Conson) Sime Darby Plantation Sdn Bhd

Det Norske Veritas Pte PERMATA Singapore Petroleum Co.

Dof Subsea Australia Pty Permata - PMTSB SN Aboitiz Power

DPS Bristol (M) Pertamina Learning Center S-Oil Corporation

Esso Malaysia Berhad PetroEnergy Resources Corp. Talisman Malaysia

ExxonMobil E & P Malaysia Inc. Petrofac Malaysia Limited Tately N.V.

First Gas Power Corporation Petroleum Insitute of Thailand Technip Geoproduction (M)

Genting Oil & Gas Petroleum Well Logging Co. Teknik Janakuasa

Geomechanics International Petrolux Temasek Holdings Pte

Greatwall Drilling Company PETRONAS Holdings Tenaga Nasional Berhad

Halliburton Energy Services, Inc. PETRONAS Carigali Thang Long JOC

Hercules Tanjung Asia PETRONAS Carigali Vietnam Limited TL Offshore

Hess (Thailand) Limited Petronas Dagangan Berhad Total (China) Investment Co. .

Hoang Long Hoan Vu JOC PETRONAS Gas TOTAL E&P Indonesia

Intisari Oildfield Service PETRONAS Methanol (Labuan) Trans Thai Malaysia

Intra Oil & Services Bhd PETRONAS Penapisan (Melaka) Transwater API

Japan Vietnam Petroleum Compan Petrousaha Engineering Services Tri-M Technologies (S)

Kavin Engineering & Svcs Pte Petrovietnam Drilling & Well Services Truong Son JOC

Kebabangan Petroleum Operating Co. Powertium Marine UMW Standard Drilling

KUFPEC Regional Ventures (Indonesia) Premier Oil Indonesia University New South Wales

Lam Son JOC PT Halliburton Indonesia Vastalux

Lion Rig Builder Pte PT Medco E&P Indonesia Vinyl Chloride (Malaysia)

Lundin Malaysia B.V. PT Pertamina (Persero) Head Office YTL Power International Berhad





IN-HOUSE TRAINING SOLUTIONS

petroEDGE® focuses on skills development in 3 main areas – Engineering, Management and Strategy for Upstream Exploration and Production Business. Our In-House Training Solutions Team offer a full spectrum of short courses, curricular competency based solutions that can be customised to your long term and short term business needs.

Types of In-House Programmes offered FUNDAMENTAL PROGRAMMES

Introduction to Exploration & Production Drilling Essentials LNG Fundamentals Introduction to FPSO CBM & Shale Gas Technical Fundamentals

TECHNICAL PROGRAMMES

Operations Geology (Level 2) Basin Analysis (Level 2) HPHT Well Engineering Deepwater Well Engineering Deepwater Well Operations Well Intervention

Well Integrity Management (Drilling & Production) HAZOP Assessment & Leadership HPHT Completions Techniques Well Operations and Maintenance Stuck Pipe Prevention & Fishing

Train-the-Trainer: Gas Processing Level 1 Train-the-Trainer: Gas Processing Level 2

MANAGEMENT & SOFTSKILLS PROGRAMMES Technical Report Writing & Presentation Skills Writing Standard Operating Procedures

EPCIC Contract Management Techniques Advanced Budgeting & Forecasting in Oil & Gas E & P Accounting Finance for Non-Finance Leadership & Team Dynamics

“TRAIN-THE-TRAINER” PROGRAMME

The "Train-the-Trainer" program has proven to be one of the most cost effective methods for embedding the process of delivering and facilitating crucial training programmes within your organisation in terms for sustainable skills and knowledge development. “Train the Trainer” programme and its specific deliverables provide in-depth concept knowledge, instructor training, and facilitation skills. This experience prepares select employees to become internal Program Leaders, licensed to teach internally. The internal trainer can play a critical role in developing and implementing programs that align the organization for success. This programme will be a carefully designed approach for sustainable and effective organisational improvement. The role-out will reflect the immediate on and on-going challenges faced within your organisation.

CURRICULUM DEVELOPMENT PROGRAMME SERVICES

With the constant changing of business environment and volatile economy, every company, big or small, needs to stay abreast of the rapidly evolving developments and acquire new competencies in order to stay competitive. Our key pool of trainers, industry experts and consultants are available to develop a Curriculum Development training programme to help you attain relevant competencies in the area that is most needed. To learn more, call us at +65 6741 9927 or email [email protected]






EARLY BIRD NORMAL TEAM DISCOUNTS

KUALA LUMPUR | MALAYSIA 24 – 26 August 2015

SGD 3499

SGD 3699

petroEDGE recognises the value of learning in teams. Group bookings at the same time from the same company receive the following: 3 or more at 5% off 5 or more at 7% off 8 of more at 10% All other promotions including early bird are exclusive of the group discount.

petroEDGE In-house Training Yes, I would like to organise this training on-site. For further information about On-site Solutions, please call +65 67419927 or email [email protected]

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CANCELLATIONS & SUBSTITUTIONS You may substitute delegates at any time. ASIA EDGE PTE LTD does not provide refunds for cancellations. For cancellations received in writing more than seven (7) days prior to the training course you will receive a 100% credit to be used at another ASIA EDGE PTE LTD training course for up to one year from the date of issuance. For cancellations received seven (7) days or less prior to an event (including day 7), no credits will be issued. In the event that ASIA EDGE PTE LTD cancels an event, delegate payments at the date of cancellation will be credited to a future ASIA EDGE PTE LTD event. This credit will be available for up to one year from the date of issuance. In the event that ASIA EDGE PTE LTD postpones an event, delegate payments at the postponement date will be credited towards the rescheduled date. If the delegate is unable to attend the rescheduled event, the delegate will receive a 100% credit representing payments made towards a future ASIA EDGE PTE LTD event. This credit will be available for up to one year from the date of issuance. No refunds will be available for cancellations or postponements.

ASIA EDGE PTE LTD is not responsible for any loss or damage as a result of a substitution, alteration or cancellation/postponement of an event. ASIA EDGE PTE LTD shall assume no liability whatsoever in the event this training course is cancelled, rescheduled or postponed due to a fortuitous event, Act of God, unforeseen occurrence or any other event that renders performance of this training course impracticable or impossible. For purposes of this clause, a fortuitous event shall include, but not be limited to: war, fire, labor strike, extreme weather or other emergency.

PROGRAM CHANGE POLICY Please note that speakers and topics were confirmed at the time of publishing; however, circumstances beyond the control of the organizers may necessitate substitutions, alterations or cancellations of the speakers and/or topics. As such, ASIA EDGE PTE LTD reserves the right to alter or modify the advertised speakers and/or topics if necessary. Any substitutions or alterations will be updated on our web page as soon as possible.

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COST ENGINEERING, FINANCING AND RISK MANAGEMENT IN UPSTREAM OIL & GAS INDUSTRY

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Cost Engineering, Financing and Risk Management