Examination Paper of Oil & Gas Management
1
IIBM Institute of Business Management
IIBM Institute of Business Management
Examination Paper MM.100
Fundamentals of Oil & Gas Industry
Section A: Objective Type & Short Questions (30 Marks)
? This section consists of Multiple choice and Short Note type questions
? Answer all the questions.
? Part one carries 1 mark each and Part Two carries 5 marks each.
Part One:
Multiple choices:
1. The major field(s) of application of gas turbine is (are)
a. Aviation
b. Oil and gas industry
c. Marine propulsion
d. All of the above
2. The following is (are) the limitation(s) of gas turbines.
a. They are not self-starting
b. Higher rotor speeds
c. Low efficiencies at part loads
d. All of the above
3. The ratio of heat actually released by 1kg of fuel to heat that would be released by complete
perfect combustion, is called
a. Thermal efficiency
b. Combustion efficiency
c. Engine efficiency
d. Compression efficiency
4. The percentage of total energy input appearing as network output of the cycle
a. Thermal efficiency
b. Combustion efficiency
c. Engine efficiency
d. Compression efficiency
5. The following method(s) can be used to improve the thermal efficiency of open cycle gas
turbine plant
a. inter-cooling
b. Reheating
c. Regeneration
d. All of the above
6. Which of the following is (are) used as starter for a gas turbine
a. An Internal combustion engineExamination Paper of Oil & Gas Management
2
IIBM Institute of Business Management
b. A steam turbine
c. An auxiliary electric motor
d. All of the above
7. Gas turbine is shut down by
a. Turning off starter
b. Stopping the compressor
c. Fuel is cut off from the combustor
d. Any of the above
8. In gas turbine, intercooler is placed
a. before low pressure compressor
b. in between low pressure compressor and high pressure compressor
c. in between high pressure compressor and turbine
d. None of the above
9. In gas turbine, the function of Re-heater is to
a. Heat inlet air
b. Heat exhaust gases
c. Heat air coming out of compressor
d. Heat gases coming out of high pressure turbine
10. The ‘work ratio’ increases with
a. increase in turbine inlet pressure
b. decrease in compressor inlet temperature
c. decrease in pressure ratio of the cycle
d. all of the above
Part Two:
1. What is API? How is API gravity calculated?
2. Who is EIA? How does it present its report?
3. What is OPEC? Name few members of OPEC.
4. How would you describe the company’s leadership philosophy?
END OF SECTION A
Section B: Caselets (40 marks)
? This section consists of Caselets.
? Answer all the questions.
? Each caselet carries 20 marks.
? Detailed information should form the part of your answer (Word limit 150 to 200 words).
Caselet 1Examination Paper of Oil & Gas Management
3
IIBM Institute of Business Management
In a recent case, it emerged that Frank Finn, a sales director at ABC Co, had been awarded a
substantial over-inflation annual basic pay award with no apparent link to performance. When a major
institutional shareholder, Swanland Investments, looked into the issue, it emerged that Mr Finn had a
cross directorship with Joe Ng, an executive director of DEF Co. Mr Ng was a non-executive director
of ABC and chairman of its remunerations committee. Swanland Investments argued at the annual
general meeting that there was ‘a problem with the independence’ of Mr Ng and further, that Mr
Finn’s remuneration package as a sales director was considered to be poorly aligned to Swanland’s
interests because it was too much weighted by basic pay and contained inadequate levels of incentive.
Swanland Investments proposed that the composition of Mr Finn’s remuneration package be
reconsidered by the remunerations committee and that Mr Ng should not be present during the
discussion. Another of the larger institutional shareholders, Hanoi House, objected to this, proposing
instead that Mr Ng and Mr Finn both resign from their respective non-executive directorships as there
was ‘clear evidence of malpractice’. Swanland considered this too radical a step, as Mr Ng’s input
was, in its opinion, valuable on ABC’s board.
Questions:
1. Explain FOUR roles of a remunerations committee and how the cross directorship
undermines these roles at ABC Co.
2. Swanland Investments believed Mr Finn’s remunerations package to be ‘poorly aligned’ to its
interests. With reference to the different components of a director’s remunerations package,
explain how Mr Finn’s remuneration might be more aligned to shareholders’ interests at ABC
Co.
3. Evaluate the proposal from Hanoi House that both Mr Ng and Mr Finn be required to resign
from their respective non-executive positions.
Caselet 2
As part of a review of its internal control systems, the board of FF Co, a large textiles company, has
sought your advice as a senior accountant in the company. FF’s stated objective has always been to
adopt the highest standards of internal control because it believes that by doing so it will not only
provide shareholders with confidence in its governance but also enhance its overall reputation with all
stakeholders. In recent years, however, FF’s reputation for internal control has been damaged
somewhat by a qualified audit statement last year (over issues of compliance with financial reporting
standards) and an unfortunate internal incident the year prior to that. This incident concerned an
employee, Miss Osula, expressing concern about the compliance of one of the company’s products
with an international standard on fire safety. She raised the issue with her immediate manager but he
said, according to Miss Osula, that it wasn’t his job to report her concerns to senior management.
When she failed to obtain a response herself from senior management, she decided to report the lack
of compliance to the press. This significantly embarrassed the company and led to a substantial
deterioration in FF’s reputation. The specifics of the above case concerned a fabric produced by FF
Co, which, in order to comply with an international fire safety standard, was required to resist fire for
ten minutes when in contact with a direct flame. According to Miss Osula, who was a member of the
quality control staff, FF was allowing material rated at only five minutes fire resistance to be sold
labelled as ten minute rated. In her statement to the press, Miss Osula said that there was a culture of
carelessness in FF and that this was only one example of the way the company approached issues such
as international fire safety standards.)Examination Paper of Oil & Gas Management
4
IIBM Institute of Business Management
Questions:
1. Describe how the internal control systems at FF Co differ from a ‘sound’ system of internal
control, such as that set out in the Turnbull guidance, for example.
2. Define ‘reputation risk’ and evaluate the potential effects of FF’s poor reputation on its
financial situation.
3. Explain, with reference to FF as appropriate, the ethical responsibilities of a professional
accountant both as an employee and as a professional.
END OF SECTION B
Section C: Applied Theory (30 marks)
? This section consists of Long Questions.
? Answer all the questions.
? Each question carries 15 marks.
? Detailed information should form the part of your answer (Word limit 200 to 250 words).
1. Risk management tools and techniques are used to minimise hazardous events associated with
oil and gas exploration and production activities.
(a) Identify risk management tools and techniques.
(b) Identify the steps of risk management AND outline EACH of the steps identified.
(c) Identify project phases where risk management applies.
2. Outline the content of a procedure for bypassing an emergency shutdown (ESD) system.
END OF SECTION CExamination Paper of Oil & Gas Management
5
1
IIBM Institute of Business Management
IIBM Institute of Business Management
Examination Paper MM.100
Fundamentals of Oil & Gas Industry
Section A: Objective Type & Short Questions (30 Marks)
? This section consists of Multiple choice and Short Note type questions
? Answer all the questions.
? Part one carries 1 mark each and Part Two carries 5 marks each.
Part One:
Multiple choices:
1. The major field(s) of application of gas turbine is (are)
a. Aviation
b. Oil and gas industry
c. Marine propulsion
d. All of the above
2. The following is (are) the limitation(s) of gas turbines.
a. They are not self-starting
b. Higher rotor speeds
c. Low efficiencies at part loads
d. All of the above
3. The ratio of heat actually released by 1kg of fuel to heat that would be released by complete
perfect combustion, is called
a. Thermal efficiency
b. Combustion efficiency
c. Engine efficiency
d. Compression efficiency
4. The percentage of total energy input appearing as network output of the cycle
a. Thermal efficiency
b. Combustion efficiency
c. Engine efficiency
d. Compression efficiency
5. The following method(s) can be used to improve the thermal efficiency of open cycle gas
turbine plant
a. inter-cooling
b. Reheating
c. Regeneration
d. All of the above
6. Which of the following is (are) used as starter for a gas turbine
a. An Internal combustion engineExamination Paper of Oil & Gas Management
2
IIBM Institute of Business Management
b. A steam turbine
c. An auxiliary electric motor
d. All of the above
7. Gas turbine is shut down by
a. Turning off starter
b. Stopping the compressor
c. Fuel is cut off from the combustor
d. Any of the above
8. In gas turbine, intercooler is placed
a. before low pressure compressor
b. in between low pressure compressor and high pressure compressor
c. in between high pressure compressor and turbine
d. None of the above
9. In gas turbine, the function of Re-heater is to
a. Heat inlet air
b. Heat exhaust gases
c. Heat air coming out of compressor
d. Heat gases coming out of high pressure turbine
10. The ‘work ratio’ increases with
a. increase in turbine inlet pressure
b. decrease in compressor inlet temperature
c. decrease in pressure ratio of the cycle
d. all of the above
Part Two:
1. What is API? How is API gravity calculated?
2. Who is EIA? How does it present its report?
3. What is OPEC? Name few members of OPEC.
4. How would you describe the company’s leadership philosophy?
END OF SECTION A
Section B: Caselets (40 marks)
? This section consists of Caselets.
? Answer all the questions.
? Each caselet carries 20 marks.
? Detailed information should form the part of your answer (Word limit 150 to 200 words).
Caselet 1Examination Paper of Oil & Gas Management
3
IIBM Institute of Business Management
In a recent case, it emerged that Frank Finn, a sales director at ABC Co, had been awarded a
substantial over-inflation annual basic pay award with no apparent link to performance. When a major
institutional shareholder, Swanland Investments, looked into the issue, it emerged that Mr Finn had a
cross directorship with Joe Ng, an executive director of DEF Co. Mr Ng was a non-executive director
of ABC and chairman of its remunerations committee. Swanland Investments argued at the annual
general meeting that there was ‘a problem with the independence’ of Mr Ng and further, that Mr
Finn’s remuneration package as a sales director was considered to be poorly aligned to Swanland’s
interests because it was too much weighted by basic pay and contained inadequate levels of incentive.
Swanland Investments proposed that the composition of Mr Finn’s remuneration package be
reconsidered by the remunerations committee and that Mr Ng should not be present during the
discussion. Another of the larger institutional shareholders, Hanoi House, objected to this, proposing
instead that Mr Ng and Mr Finn both resign from their respective non-executive directorships as there
was ‘clear evidence of malpractice’. Swanland considered this too radical a step, as Mr Ng’s input
was, in its opinion, valuable on ABC’s board.
Questions:
1. Explain FOUR roles of a remunerations committee and how the cross directorship
undermines these roles at ABC Co.
2. Swanland Investments believed Mr Finn’s remunerations package to be ‘poorly aligned’ to its
interests. With reference to the different components of a director’s remunerations package,
explain how Mr Finn’s remuneration might be more aligned to shareholders’ interests at ABC
Co.
3. Evaluate the proposal from Hanoi House that both Mr Ng and Mr Finn be required to resign
from their respective non-executive positions.
Caselet 2
As part of a review of its internal control systems, the board of FF Co, a large textiles company, has
sought your advice as a senior accountant in the company. FF’s stated objective has always been to
adopt the highest standards of internal control because it believes that by doing so it will not only
provide shareholders with confidence in its governance but also enhance its overall reputation with all
stakeholders. In recent years, however, FF’s reputation for internal control has been damaged
somewhat by a qualified audit statement last year (over issues of compliance with financial reporting
standards) and an unfortunate internal incident the year prior to that. This incident concerned an
employee, Miss Osula, expressing concern about the compliance of one of the company’s products
with an international standard on fire safety. She raised the issue with her immediate manager but he
said, according to Miss Osula, that it wasn’t his job to report her concerns to senior management.
When she failed to obtain a response herself from senior management, she decided to report the lack
of compliance to the press. This significantly embarrassed the company and led to a substantial
deterioration in FF’s reputation. The specifics of the above case concerned a fabric produced by FF
Co, which, in order to comply with an international fire safety standard, was required to resist fire for
ten minutes when in contact with a direct flame. According to Miss Osula, who was a member of the
quality control staff, FF was allowing material rated at only five minutes fire resistance to be sold
labelled as ten minute rated. In her statement to the press, Miss Osula said that there was a culture of
carelessness in FF and that this was only one example of the way the company approached issues such
as international fire safety standards.)Examination Paper of Oil & Gas Management
4
IIBM Institute of Business Management
Questions:
1. Describe how the internal control systems at FF Co differ from a ‘sound’ system of internal
control, such as that set out in the Turnbull guidance, for example.
2. Define ‘reputation risk’ and evaluate the potential effects of FF’s poor reputation on its
financial situation.
3. Explain, with reference to FF as appropriate, the ethical responsibilities of a professional
accountant both as an employee and as a professional.
END OF SECTION B
Section C: Applied Theory (30 marks)
? This section consists of Long Questions.
? Answer all the questions.
? Each question carries 15 marks.
? Detailed information should form the part of your answer (Word limit 200 to 250 words).
1. Risk management tools and techniques are used to minimise hazardous events associated with
oil and gas exploration and production activities.
(a) Identify risk management tools and techniques.
(b) Identify the steps of risk management AND outline EACH of the steps identified.
(c) Identify project phases where risk management applies.
2. Outline the content of a procedure for bypassing an emergency shutdown (ESD) system.
END OF SECTION CExamination Paper of Oil & Gas Management
5
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