Introduction
This five-day program 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 program 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 of assets as tangible or intangible, the unit of the production method for depreciation of capitalized 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 program 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.
Course Objectives of Operation, Diagnostics, and Maintenance for Oil & Gas
By the end of the program, delegates will learn how to:
- Develop an 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 the 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
Course Methodology of Operation, Diagnostics and Maintenance for Oil & Gas
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 an 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.
Organizational Impact of Operation, Diagnostics and Maintenance for Oil & Gas
- 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
- The ability of Finance managers and staff to work with less supervision
- Preparation of Finance staff for increased responsibility
Personal Impact of Operation, Diagnostics, and Maintenance for Oil & Gas
- A 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
Course Outlines of Operation, Diagnostics and Maintenance for Oil & Gas
Day 1: The development and purpose of company accounts
Standards of financial reporting in the O&G industry to stakeholders
- Investor reporting
- New investors
- Taxation and royalties
- Stock market intermediaries
Day 2: Convergence of GAAP and IFRS
- Effect on reporting
- Migration paths
- Effect on PSC reporting
- Share pricing and O&G companies
Day 3: Capitalisation and cash flows in the Oil & Gas Industry
Sourcing capital
- Capitalizing E&P projects
- Effects of IFRS
- Capital maintenance
- Sources of capital
Day 4: Oil & Gas Value Chain and Accounting Issues
- E&P Exploration & evaluation, borrowing costs, and development expenditures
- P&S Reserves and resources
- Product valuation issues, impairment of assets, disclosures, decommissioning
- Royalties and income taxes
- Emission trading schemes
Day 5: Company accounts, PSA’s and Joint Ventures
Accounting for multiple efforts
- Joint ventures – GAAP & IFRS
- Business combinations
- Currency issues
- Accounting treatments
Day 6: Analysis of financial statements
- Analytical tools
- Full cost
- Successful efforts
- Decommissioning obligations
Day 7: 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
Day 8: Ethical issues
- Corporate governance
- Government regulation
- Investor confidence and share prices
- Creative accounting and investor protection
Day 9: Investment finance in the oil and gas industry
Processes and lead times
- Sources of external finance
- Financial markets
- Investment criteria
- Roles of intermediaries in the financial markets
Day 10: Shell and BP – Performance and Share Prices
- Analysis of Shell Oil and BP Accounts
- DuPont hierarchy of ratios
- Theoretical conclusions and live feeds from London Stock Exchange
- Influencing factors
About Dubai
Dubai, located on the Persian Gulf, is one of the seven United Arab Emirates and one of the most popular tourist destinations in the world. The discovery of oil in the region has made Dubai extremely wealthy, allowing it to build the glittering skyscrapers that it is now famous for. That wealth is strongly in evidence in Dubai and visitors will see luxurious buildings and supercars aplenty. Perfect beaches and endless shopping opportunities are to key to Dubai's attractions. Flights to Dubai open up the city's cultural attractions to tourists, with beautiful mosques, museums and art galleries scattered throughout this ultra-modern metropolis.
Things to do and places to visit in Dubai
Dubai's wealth has made it famous for building ever taller buildings and creating artificial islands off its shores. The city's hotels are luxurious and shoppers will love its extensive shopping malls which showcase all the world's top brands. Dubai's attractions don't end there. Dubai also caters to adventure lovers, who can jump in a 4x4 or on a board to speed over dunes outside the city. Local culture mustn't be forgotten either, and visitors have wonderful mosques to visit and old districts to explore. All that combined means that a flight to Dubai is sure to lead to an unforgettable holiday.
When visiting Dubai, be sure to:
- Go to the observation deck of the Burj Khalifa, the tallest building in the world.
- Admire the intricately beautiful Grand Mosque, which has the tallest minaret in the city.
- Understand the local history and culture with a visit to the Dubai Museum.
- Discover objects from the 6th century at Jumeirah Archaeological Site.
- Go skiing – That's not a joke, the Mall of the Emirates houses a snowdome.
- Go shopping at the Mall of the Emirates or the Dubai Mall.
- Explore the desert surrounding the city – either by 4x4 or atop a camel.
- Eat fantastic seafood at Dubai Marina.
- Cool off at the Wild Wadi Waterpark.
- Marvel at gorgeous Arabic calligraphy at Jumeirah Mosque, the biggest in the city.
- Take a yacht tour around the artificial islands of Palm Jumeirah.
- Haggle for souvenirs in one of the city's souks.
- Wander around the traditional building in Bastakiya District.