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 Istanbul
Few places compare to the vibrant, cosmopolitan city of Istanbul, whose enormous size straddles both Europe and Asia, forming a bridge between western and eastern cultures. Resting upon the natural harbor of the Golden Horn, the skyline of the once-Constantinople is pierced with minarets and ancient monuments that embody centuries of history. While it is brimming with historical landmarks and colorful markets, modern Istanbul is also well represented through its contemporary art scene, European-style café culture, world-class dining venues.
Things to do and places to visit in Istanbul
Istanbul is teeming with attractions and landmarks from historic sights and unique cuisine to lively markets and unmistakable culture. It is a thriving city, with a myriad of things to do that skillfully manage to blend every aspect of both the contemporary and the historical world.
On a city break in Istanbul be sure to:
- Visit a hammam, a traditional Turkish bath, whose origins date back to Roman times.
- Marvel at the Hagia Sophia, Süleymaniye Mosque and Blue Mosque, Istanbul's most spectacular monuments that dominate the skyline.
- Explore the Topkapi Palace Museum, one of Istanbul's most visited museums, home to over 80,000 artifacts.
- Walk through the Basilica Cistern, an underground marvel built in the 4th century.
- Be dazzled by the Grand Bazaar, one of the world's oldest and largest covered markets.
- Go shopping for exotic products and Turkish delights in the Spice Bazaar.
- Cross the bridge connecting Europe and Asia against the backdrop of the Bosphorus, or take a Bosphorus cruise.
- Taste the diversity and flavor of Turkish cuisine.
- Admire panoramas of the city from the Galata Tower.
- Walk through Taksim Square, the city's dynamic square that never sleeps.