Stock Control and Credit Risk Management in Oil and Gas Industry Course


Introduction

Inventory is a current asset to a firm. Carrying inventory comes with a certain degree of risk. This risk is a component of the cost of carrying inventory. When a company stocks items in the warehouse there is always the risk that the items may fall in real value during the period they are stored. If a company stored parts for their work centers or equipment, the parts in the warehouse could be worth far less than the price that was originally paid and any losses, excess, obsolete and miss-managed inventory means a reduction in the company equity. When companies are looking to reduce costs, a great many times they ignore the inventory sitting in their warehouses and the cost of carrying that inventory. It is important for businesses to carefully examine all the costs of carrying inventory and determine where they can make changes to reduce that cost and help with the company’s bottom line. Further this course will enhance an understanding of energy strategy and planning for the medium and long-term future of energy supply and energy management. Considerations are political and economic issues affecting supply and demand. Participants will be introduced to credit risk management in the oil and gas sector. Risks in extraction, production and distribution will be discussed.

Duration

5 Days

Who Should Attend

• Those new to managing inventory

• Those non inventory people who need to gain an awareness of the issues and key drivers of stock control operations

• Inventory, Stock, Supply Chain, Logistics, Warehouse and Distribution Professionals

• Credit risk managers

• Risk managers

• Credit risk analysts

• Energy traders

• Trading managers

• Back office / collateral

• Internal audit

• IT specialists

• Legal and compliance

Learning Objectives

• How to analyze stock and inventory?

• How to make productivity improvements?

• Understand the role of inventory in the supply chain

• Balancing cost and service requirements

• A framework for continual improvement

• Best in class practices

• Explore the various dimensions of liquidity and counterparty risk in the energy sector

• How to perform Counterparty Valuation Adjustments (CVA) for energy derivatives

• Use of credit mitigation tools such as netting, collateral and credit derivatives in the energy sector

• Learn how to structure an internal rating system for derivatives counterparties

• Understand how to set up a limit structure based on Current Exposures as well as Potential future exposures against various counterparties

• How to aggregate counterparty exposures using netting and collateral terms to provide a single unified view

• Learn how ratings, indicators, and bond and CDS spreads price default risk

Course Outline

1. Inventory and the Supply Chain

 • Inventory definitions and importance

• Inventory flow in the Supply Chain

• The Basic Rules of successful Supply Chain

 • Supply Chain and Inventory dynamics

• Financial Management and Inventory

• Statistics application in Inventory Control

• Truths on Inventory visibility

2. Key Components to Understanding Effective Inventory Control

 • End-User Demand Analysis

 • Forecasting for Operations and Maintenance

• Understanding Supply Lead Time

 • Cost & Benefits analysis

 • Developing Inventory policies

• The need for Inventory in organizations

3. Inventory Mechanics, Methods and Systems

• Basic mechanics of inventory systems

• Establishing Order Quantity

• Implications of Free stock in inventory

 • Simple replenishment methods, for example, Min/Max

• Replenishment methods, Reorder Point and Reorder Level (ROP/ROL)

 • Requirements planning systems, Bills of Material and inventory planning

• Class assignment inventory control methods

4. Establishing Stock Control

• Establishing Stock Checking

• Developing Stock accuracy

 • Stock tolerances and approvals

• Stock reconciliations/discrepancies

 • Identifying Surplus and obsolescent stock

• Identifying different Storage conditions

• Understanding Stock coding

• Stock Variety reductions

5. Overview of Counterparty Risk and Liquidity Risk in Derivatives

• Funding Liquidity and Counterparty Risk

• Expected Losses: Exposures, Recovery Rates and Probability of default

 • Mark to Market, Margin, Collateral and Clearing

• Integrated approach to model Counterparty and Liquidity Exposures

 • Group exercise: Interaction between Market Risk, Liquidity Risk and Counterparty Risk

6. Credit Risk Assessment – Internal vs. External Credit Rating Systems

• Role of a rating system

 • Market-based Credit Assessments: Ratings, Corporate Bond Spreads, and CDS spreads.

• Rating agencies methodologies for energy firms

• Credit Watches and Outlooks

• Case study: Moody’s Ratings and Default probabilities

 • Internal Rating Systems: A Top-Down Approach for Credit Risk Assessment

 • Case Study: Analysis of an internal rating system of an energy trading firm

 • Case study: Approval process for non-rated counterparties

7. Credit risk mitigation tools

• Letter of credit: Types and main uses in energy trading

 • Parent guarantees: Types and main uses

• Trade and receivables insurance

• Debt covenants and collateral triggers

 • Use of Credit Default Swap (CDS) in energy markets

• Case study: CDS and bond market assessment of Glencore credit risk

Enroll for this Course

We are proud to offer this course in a variety of training formats to suit your needs.

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Enroll for a Face-to-Face (In-Person) Class

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Enroll for a Virtual (Zoom) Class

Join a scheduled class with a live instructor and other delegates.

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Enroll for an Online Self-Paced Class

Keep track of your own progression throughout your course and ensure continuous improvement.

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Benefits of Taking a Course at IRES

LEARN

Our courses are carefully curated to keep you abreast of latest industry trends, technological advancements, and best practices. We employ a variety of teaching methodologies, including hands-on workshops, case studies, and interactive sessions, all aimed at fostering an engaging and effective learning environment. Our expert instructors bring a wealth of knowledge and real-world experience, providing our clients with insights that can be immediately applied in their professional lives.

NETWORK

Our courses serve as a vibrant platform for professionals to connect and engage with a diverse community of peers, industry leaders, and experts. By participating in our programs, you gain access to an invaluable network that spans across various sectors and geographical boundaries. This networking aspect is not just about forming professional relationships; it's about creating a supportive ecosystem where ideas, opportunities, and collaborations can flourish.

GROW

Our courses are designed to challenge and inspire professionals to step out of their comfort zones and explore new horizons. Through a combination of theoretical knowledge and practical application, our programs help professionals refine their existing skills and acquire new ones, making them more versatile and competitive.

FAQs & Course Administration Details:

This training can also be customized to suit the needs of your institution upon request. You can have it delivered in our IRES Training Centre or at a convenient location. For further inquiries, please contact us on Phone: +254 715 077 817 or Email: [email protected].
The instructor led trainings are delivered using a blended learning approach and comprise of presentations, guided sessions of practical exercise, web-based tutorials and group work. Our facilitators are seasoned industry experts with years of experience, working as professional and trainers in these fields. All facilitation and course materials will be offered in English. The participants should be reasonably proficient in English.
Upon successful completion of this training, participants will be issued with an Indepth Research Institute (IRES) certificate certified by the National Industrial Training Authority (NITA).
Payment should be transferred to IRES account through bank on or before start of the course. Send proof of payment to [email protected].
Accommodation and airport pickup are arranged upon request. For reservations contact the Training Officer. Email: [email protected] Phone: +254 715 077 817.