Introduction
This training course aims to provide the knowledge and skills to analyze and evaluate investment decisions— to distinguish value-creating from value-destroying ventures. Finding energy resources is an uncertain business. Historically, many ventures failed, yet some successful projects also led to business success and significant value creation. Then, what is a good project opportunity?
The answer is likely multi-dimensional; it is about understanding disciplines from subsurface to economic, comprehensive coverage that eventually reflects our understanding of the value potentials of energy projects
Course Objectives:
By the end of this Energy Value Creation training course, the participants will be able to:
- Understand the principles of finance and economic decision analysis in the energy business
- Gain skills in effective formulation of investment decisions
- Understand the challenges of investment under uncertainty
- Gain skills in using analytical tools, including probabilities and decision trees
- Apply the knowledge and skills to the analysis of value-creating decisions
Target Audience:
- Analysts working on feasibility analysis of energy projects
- Engineers involved in the investment decision process
- Managers with responsibility or interest in the investment decision process
- Decision-makers within corporations or government bodies
- Individuals interested in expanding their skills and knowledge in the field of energy value creation
Course Outline:
Day 1
PRINCIPLES OF CORPORATE FINANCE AND VALUE CREATION
- Introduction to Energy Value Chain
- Analysis of decision making and corporate objectives
- Understanding uncertainty in Energy Projects
- Modelling Uncertainty
- Using probability to encode uncertainty
- Economic Consideration: Informed Analysis for value-creating decisions
Day 2
FROM UNCERTAINTY TO VALUE
- Comparative Analysis of Value
- Comparisons of Value Across Time
- Comparison of value across various levels of uncertainty
- Risk vs Uncertainty: Theory and Practice
- Principles of Discounted Cash Flow
Day 3
PROJECT CASH FLOWS, UNCERTAINTY, AND RISK
- Technical and Market Risks
- The Effect of Diversification
- Risk-Return Tradeoffs
- The Capital Asset Pricing Model (CAPM)
- Discounting Risk Premiums
Day 4
PROJECT APPRAISALS
- Uncertainty, risk, and financial return at Project and Portfolio Level
- Financing Leverage and its Effect
- General Investment Analysis, Energy Markets, and Prices
- Estimation of the Discount Rate
- Introduction to certainty-equivalent approach to investment analysis
Day 5
CHALLENGES IN THE ENERGY LANDSCAPE
- Managerial flexibilities and uncertainty
- Energy commodities and exchanges, market instruments to hedge risk
- Decision trees as a modeling and communications tool
- An integrated approach to valuation and analysis of value creation
- Future Challenges: environmental issues, emission taxes, and emission markets
About Geneva
Thanks to its incomparable cultural and historical heritage as well as varied and splendid landscapes, Europe never disappoints! Geneva is no exception! If you want a relaxing vacation without putting your favorite activities aside, then you’ll love a trip to Geneva! Seductive for museum and art gallery lovers, or fans of shopping, lush parks, or even for night owls, it is a lovely destination with things to please all kinds of tourists, young or old. Its proximity to other European destinations will also help you combine your stay in Geneva with other tours.