Foundations of Energy Finance

An Interactive 5 - Day Training Course

Foundations of Energy Finance

The Basics of Markets, Valuation & Risk Management

Classroom Dates
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30 Sep - 04 Oct 2024
Dubai
$5,950
Register
Register
10 - 14 Feb 2025
Dubai
$5,950
Register

Corporations involved in the energy sector need executives who understand the extreme volatility of global energy markets and how to manage the financial risks created by changing energy prices.  This program is designed to give participants an in-depth understanding of energy finance by addressing three areas of finance in an energy context:  Pricing, asset valuation and risk management.  The course will increase your comprehension of the energy markets, as well as demonstrate how to model and forecast energy and forward/futures prices.  The course will build knowledge of energy-related derivatives, including the different derivative products and how to apply them in the energy markets to develop hedging and risk management strategies.

The objectives of this course are to give an introduction into the basics of energy trading as well as price formation mechanism in the oil and gas industry and to introduce students to how energy corporations manage their business risk (esp. price) exposures, and the derivative securities which can be utilized for this purpose:

  • General overview about trading (terminology, tools, etc.)
  • Overview of energy markets
  • Principles of risk management: Objectives and tools
  • Proper role of derivatives in firms' risk management
  • Differences between exchange and OTC Markets

The course will be presented through a combination of four methodologies:

  1. Clear presentation of notes with the requisite supportive analytics
  2. Detailed presentation of the relevant empirical regularities/stylized facts of the energy markets
  3. Presentation of three case studies designed to exemplify the application of risk-management and valuation principles
  4. Interspersed in the lectures are relevant problem-sets, designed to afford participants with the opportunity to apply the principles conveyed and see their implementation

This executive education program designed to provide participants with an understanding of pricing, risk management, asset valuation and derivatives within the energy markets:

  • Use financial models to analyze and forecast energy prices; extrapolate forward prices beyond the liquidity tenor
  • Understand the risk of and return from futures and options contracts on energy commodities
  • Manage and optimize their corporations’ energy risk exposure
  • Estimate and calculate volatility in energy prices
  • Apply option valuation techniques to the energy markets
  • Understand and use derivative products to mitigate energy price risk; use structured products to enhance firm value; understand exotic structures unique to oil (e.g., average option) and gas and power (e.g., swing options, weather derivatives)
  • Utilize real options theory to value energy assets; use information from futures/option prices to make optimal production decisions: Optimal timing for extraction, optimal rate at which to extract oil (gas) from a field; value oil fields, pipelines and storage facilities, power plants
  • Apply Value-at-Risk to the energy industry

The skills acquired in this course include:

  • Understanding the main terminology used in the industry
  • Understanding the formation of oil and gas prices
  • Understanding the linkage between physical and financial oil & gas markets
  • Understanding the role of financial markets as efficient conveyors of information and assessors of risk
  • Understanding the valuation and role of futures contracts and swap agreements
  • Understanding the principles of option and derivative-claim valuation, hedging and uses
  • Understanding the structuring, reverse engineering and valuation of OTC derivatives

This course is designed for individuals working in financial analysis, valuation, trading, marketing,  risk management or quantitative analysis positions with oil and gas exploration companies; investment and commercial banking, consulting, and financial services firms working in the energy sector; production and distribution companies; energy trading firms; and corporations outside the energy industry with a significant cost exposure to energy prices, such as energy-intensive manufacturing industries, transportation including air, coal companies and oil-field services.

In terms of job titles, these individuals include:

  • Financial analysts
  • Quantitative analysts or researchers
  • Energy traders dealing with commodities
  • Risk Managers dealing with commodities
  • Commercial and investment bankers dealing with commodities
  • Consultants in the commodity arena
  • Government and regulatory officials, esp. those with responsibilities for the energy sector

DAY ONE: THE CURRENT STATE OF THE EQUITY AND COMMODITY MARKETS - THE "MESSAGE FROM MARKETS" 

  • Measuring Nervousness/Uncertainty of Equity and Commodity Markets
  • The Crude-Oil Markets
  • Level and Slope of Crude-Oil Futures Markets
  • Impact of Economic/Financial/Geopolitical Events on Implied Volatilities in the Crude-Oil Market
  • Impact of Seasonality on Global NatGas Markets
  • Future Inflation Rates
  • Quantifying Future Inflation Rates
  • Energy Prices and Inflationary Pressures
  • The Refining Spread and Retail Gasoline Prices
  • The Domestic NatGas Market: The Impact of Seasonality
  • The March/April 2007 Futures Contracts

DAY TWO: OVERVIEW OF RISK MANAGEMENT 

  • Fundamentals of Forwards and Futures Contracts:  Definition, Payoff Diagram, Pricing by Arbitrage
  • Forward/Futures Prices and Forecast Prices
  • Risk-Management from a Corporate Perspective:
  • Commodity Swaps

 DAY THREE: OPTION PRICING 

  • Payoffs and Put-Call Parity
  • Black-Scholes Formula
  • Option “Sensitivities” (the “Greeks”); Delta and Gamma
  • The Binomial Model and the Valuation of American-Style Options
  • Real Options in Energy Markets:  Power Plants as a Strip of Spark Spread Options; Oil Fields as the Valuation of an Extraction Option

 DAY FOUR: ESTIMATING THE PRICE PROCESS IN ENERGY MARKETS 

  • Historical Volatility; The Term Structure of Volatility (TSOV)
  • Estimating Volatility from Market Prices of Options in Energy Markets
  • Historical or Implied Vols?
  • Estimating a Mean-Reverting Process
  • Characterizing the Volatility “Surface” Across Time and Strike
  • Jump-Diffusion Process
  • The Need to Extrapolate in Energy Finance:  Valuation of Long-Dated Real Assets and Financial Structured Products; Extrapolating Crude-Oil Prices; Extrapolating Natural-Gas Prices; Extrapolating the Term Structure of Volatilities (TSOV); Extrapolating Correlations
  • VAR and CVAR (Credit Value-at-Risk) in the Energy Industry

DAY FIVE: ENERGY DERIVATIVE PRODUCTS:  THE ROLE OF STRUCTURING, CALIBRATION, VALUATION AND HEDGING IN PROFITABLE MARKET-MAKING 

  • Commercial Structured Products
  • Categorizing derivative products:  option collars, average options, spread options, swing options, weather derivatives, commodity-linked bonds; “Swing” Options; Weather Derivatives
  • Structuring and valuing option collars
  • Structuring and valuing average (Asian) options
  • Example of calibration:  Using vanilla options to determine the value of volatility for valuation of average options
  • Non-Commercial Structured Products

We offer two main training formats to cater to different preferences and needs: 

  • Classroom Training Delivery – Our traditional classroom-based training courses provide a face-to-face learning experience with subject matter experts. You’ll benefit form in-person interactions, hands-on exercises, and a structured classroom environment.
  • Online Training Delivery – We also offer convenient live/online training courses that you can access from anywhere with a stable internet connection. These courses provided flexibility and allow you to learn anywhere, making them suitable for busy schedules or remote learning.

Yes, we do. We provide tailored training courses designed to meet the specific requirement of larger group of individuals. These customized training courses can be conducted both classroom and online formats, allowing you the flexibility to choose you preferred dates and duration.

Please contact us at inhouse@energytraining.ae to discuss your group’s training needs, and we’ll work with you to create a personalized training course that aligns with your objectives.

We value transparency and are happy to provide our instructor’s profiles upon request. If you would like to learn more about our instructor’s’ qualifications, expertise, and experiences, please email us at info@energytraining.ae.

We have multiple international training venues. You may find this through our website link: https://energytraining.ae/training-locations 

Our training courses are held at our partnered hotels within the city included within our training

The Energy Training Centre Certificate of Completion with corresponding learning hours who has successfully completed the training course.

Yes, we provide assistance by issuing a Letter of Invitation stating that you are confirmed to attend our training.

Yes, here are the following options we can offer to assist you:

  • Corporate Discount – We can extend our corporate discount to participants staying at the same hotel, if we have any. Please enquire about the availability of this discount when you register for the training course.
  • Nearby Hotel Suggestions – If you prefer other accommodations, we can provide a list of nearby hotels to suit your needs and budget.

Feel free to go through hotel booking platforms on the internet to find the most cost-effective for you.

No, we do not provide job placement services after the training course. However, we are confident that our training course equips you with the necessary tools and knowledge to enhance you career prospects and promote career growth. Our training course are designed to empower you with valuable skills and expertise to excel in your chosen field.

Classroom
  • Tuition fee for a 5-day training course
  • Provision of a world-class subject matter expert to deliver this training
  • Meeting at a hotel venue corresponding to your chosen session
  • Welcome food and drinks, AM / PM snack, and Lunch
  • Digital course materials (e-Tablet)
  • Course completion certificates
  • Designing and administration of Pre-& Post Course Assessments
  • Preparation of participant’s Performance and Appraisal Report, if required
  • Issuance of Letter of Invitation for delegates needed visa processing, if required
Online
  • Tuition fee for a 5-day online training course
  • Provision of a world-class subject matter expert to deliver this training through live/virtual delivery
  • An electronic copy of the training manual and relevant hand-outs
  • Issuance of The Energy Training Centre e-Certificate of Completion
  • Administration of Pre-& Post Workshop Assessments
  • Link access of online platform acceptable to both parties

Certainly, we do provide corporate rates tailored for organizations seeking to enrol multiple employees in our training programs. To facilitate this, we encourage you to make a formal request via email addressed to info@energytraining.ae. We’ll be delighted to discuss and offer a suitable arrangement for your corporate needs.

Yes, special discounts are available upon request if you have more than one registrant for a course. For further information please email us at info@energytraining.ae

We offer two convenient payment options:

  • Bank Transfer – You can make payment via bank transfer. Once your registration is confirmed, you will receive an invoice with the banking details for the transfer. We would require you to supply a swift copy for us to confirm receipt of funds.
  • Payment Link – Alternatively, we provide a secure payment link that you can use to complete your payment after your registration has been confirmed.

Upon receipt of your registration details sent via email at reg@energytraining.ae, we will send you the following by e-mail within 24-48 hours of registration.

  • Joining Instructions
  • Invoice/receipt (where appropriate)

 If you register online, you will receive an e-mail on the same day confirming your registration.

There are two convenient options to register for a training course:

  • Online Registration Form – Register for your desired training course by completing the online registration form available on our website. Simple click on the registration button or select your preferred dates and provide the requested information.
  • Email Registration – You can email us your intention to register at info@energytraining.ae. Our team will guide you through the registration process and provide assistance you may need.

Yes, we do allow registration transfers in the event that you are unable to attend the training course. To initiate a transfer, please send us an official email requesting the change. We’ll guide you through the transfer process and ensure a smooth transition of your registration to another eligible participant.

Our training course sessions are scheduled and posted on our website for your convenience. However, we understand that there may be specific requirement for your group. If you have a preferred venue and specific training dates in mind, please feel free to propose them to us by clicking on the button “Propose you preferred location & date” of your preferred training course.

Our course timings slightly vary between the cities we offer our training courses. Please let us know of your preferred course and session (dates/venue) through email at info@energytraining.ae. Alternatively, you may call/WhatsApp us at +971 50 746 0956.

We understand that time zones may be different between our Senior Consultants and our delegates. Our standard online course timings (11:00 AM to 4:00 PM, GMT+4 – Dubai, UAE) may be adjusted upon confirming the programme. Our team shall communicate between the confirmed registered delegates and suggested a suitable course timing for all.

Our standard course duration for our classroom programmes is 6 hours per day while our online session is 5 hours per day.

Our training programmes are designed to be concise yet comprehensive, focusing on professional development. The duration varies based on the specific course content and objectives – we normally offer programmes between 5 – 10 days. However, our emphasis lies in delivering interactive and engaging sessions that prioritize depth of learning within a condensed timeframe. This approach ensures participants acquire substantial knowledge and skills efficiently.

We have been assessed by TUV Rheinland Middle East FZE and comply with Quality Management System standards – ISO 9001:2015 and ISO 29993:2017, ensuring a commitment to quality and excellence in our operations and services.

Our training courses span across diverse industries, encompassing sectors such as but not limited to:

  • Power & Utilities
  • Oil & Gas
  • Financial Institutions
  • Government and Regulatory bodies
  • Manufacturing & Production Industry

Our commitment lies in continuously refining and expanding our training course offerings to align with evolving industry landscapes. We encourage individuals to explore our website or engage with our dedicated support team for the latest information on available courses, ensuring access to the most pertinent and current educational resources.

Yes, Energy Training Centre is an ILM Recognised Provider (ID# 002398B), authorized to register learners and offer training courses recognized by ILM. Participants seeking ILM Recognised Certification would need to complete an assessment post the ILM Recognised courses. ILM is a renowned provider of leadership and management qualifications, part of the City and Guilds Group. Additionally, our company is a CPD Certified Training Company, ensuring our commitment to continuous professional development standards.

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