Oil and Gas Accounting and Performance Measurement

Code

293

Start Date

2025-04-27

End Date

2025-05-01

City

Casablanca

Price

3950 $

Language

Participants

1-15

Hotel

Hotel Meeting Room

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Introduction

This five-day programme develops an essential understanding of Oil & Gas Exploration & Production (E&P) accounting, reporting and performance measurement issues and practices. It develops your ability to prepare, use and critically evaluate information on E&P activities, applying specialist industry knowledge and relevant analytical skills.

The programme is designed specifically for those who have a basic understanding of accounting but who need to understand more about accounting and financial reporting policies and practices in the upstream oil and gas industry.
Topics covered include the successful efforts and full cost methods of accounting, the classification ofassets as tangible or intangible, the unit of production method for depreciation of capitalised costs, the testing for impairment of oil and gas assets, and accounting for removal and restoration of oil and gas facilities.
The main requirements of Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS) relevant to the Oil & Gas Exploration & Production industry are examined for each major phase in the field life cycle.
Learning throughout the course is achieved through illustrated presentations, group discussions, worked examples, exercises and solutions, and extracts from published financial statements of international companies.
Participants in this programme gain a broader and deeper appreciation of the role of the E&P Finance Department and the context in which it operates, encouraging a more confident and proactive approach to their work, developing awareness of issues, and preparing them for increased responsibility.

Seminar Objectives

By the end of the programme, delegates will learn how to:

Develop understanding of the accounting standards, policies and practices used by companies in the Oil & Gas Exploration & Production industry
Appreciate the nature and financial implications of Production Sharing Contracts and other agreements between host governments and international companies
Examine issues and guidelines in accounting for Joint Ventures
Identify and know how to apply international and national accounting standards most relevant to the E&P industry
Improve relevance and reliability of financial reports to better meet the needs of users
Review and use publicly available information for benchmarking the business performance of companies in the E&P industry

Training Methodology

Each topic on this course is introduced with an illustrated presentation on the activities to be accounted for, the methods used, and the issues arising in the financial reporting of those activities. Learning on each topic is developed by a worked example, and participants then complete an exercise, individually or in groups as appropriate, to ensure that they are able to apply what they have learned.

On completion of each exercise, a full solution is issued and discussed, with an opportunity for questions and answers. Having mastered the theory and practice of each issue, learning is further reinforced by examination of relevant extracts from the annual reports of international oil and gas companies. At the end of each day, participants have an opportunity for a one-to-one session with the course leader to ask further questions and to go over any material that they have not yet fully understood.

Organisational Impact

More effective Finance support for front-line departments
Greater relevance and reliability of financial and management information
More strategic thinking and focus on performance
More effective use of financial statements of the company, its co-venturers and its competitors
Ability of Finance managers and staff to work with less supervision
Preparation of Finance staff for increased responsibility

Personal Impact

Better understanding of the context and importance of the work you do
Greater awareness of industry practices, problems and solutions
Increased understanding and assurance to complete tasks successfully
Increased self-confidence and motivation at work
Greater job satisfaction in providing quality support to management
Greater ability to supervise, develop and motivate colleagues

Who Should Attend?

Corporate Accountants, Financial Controllers, Treasury Officers, Management Accountants
Finance Staff in General Accounting, Payables, Receivables, Inventory, Fixed Assets, etc.
Joint Venture Accountants and Auditors
External, Financial and Internal Auditors
Government Regulators and Auditors
Financial and Investment Analysts

Programme Outline

Day 1 – The Oil & Gas Sector And Major Accounting Issues

The Oil & Gas Sector & The Macro-economic Factors

Commodity prices, currency fluctuations, interest rate risk and political developments and environmental risk.

Costs in Acquisition, Exploration, Development and Production of new oil or natural gas reserves

Accounting Approaches

The “Successful Efforts” (SE) Method or the “Full Cost” (FC) Method

An Introduction/Overview of IFRS in relation to the Oil & Gas Sector, with particular reference to:

IFRS 1: First-time Adoption of International Financial Reporting Standards
IFRS 6: Exploration for and Evaluation of Mineral Assets
IFRS 10: Consolidated Financial Statements
IFRs 11: Joint Arrangements
IAS 16: Property, Plant and Equipment
IAS 36: Impairment of Assets
IAS 37: Provisions, Contingent Liabilities and Contingent Assets
IAS 38: Intangible Assets
IAS 39 Financial Instruments: Recognition and Measurement – Superseded by IFRS 9 effective 2013

Day 2 – Evaluating The Performance And Identifying The Accounting Issues of BP, CHEVRON , SHELL & SABIC

Analysis of financial statements

Income Statements
Statement of Financial Position (Balance Sheet)
Cashflow Statements

Identification & Evaluation of their Accounting Policies

DuPont Analysis – Evaluating and Improving Return on Equity (ROE)

Evaluation of their Share Price and Investment Performance

With live feeds from London Stock Exchange and Dow Jones

Day 3 – Accounting For Upstream Activities With Reference To Ifrs And Examples of BP, CHEVRON & SHELL, E.G.

Reserves and resources
Exploration and evaluation
Revenue recognition

Assets

Depletion, Depreciation & Amortisation (“DD&A”)
Impairment of development, production and downstream assets

Day 4 – Joint Arrangements; Financial Instruments & Derivatives

Business Combinations, Joint Ventures & Production Sharing Agreements (“PSA”s)
Treasury Management Issues for Multi-nationals
The Use of Derivatives in the Oil& Gas Sector to manage the commodity, currency and interest-rate risks etc
British Airways Case Study – Hedging the Oil Price using Futures

Day 5 – Creative Accounting And Corporate Governance

Creative Accounting – Enron and investor protection
Auditors and reporting to investors in the oil and gas industry
External audit investigations and reports
- The auditor’s ‘Opinion’
- True and Fair
- Sarbanes Oxley
- Internal audits

Ethical issues

Corporate governance
Government regulation
Investor confidence and share prices

To view the training curriculum, please click here
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