International Financial Reporting Standards (IFRS) for the Oil & Gas Industry

By the end of the IFRS for the Oil and Gas Industry training course, 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 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

Content

The Oil and Gas Sector & 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
• 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  • IAS 39 Financial Instruments: Recognition and Measurement – Superseded by IFRS 9 – was to be effective 2013 but now 2018
• •  

Evaluating the Performance and Identifying the Accounting Issues

• Analysis of financial statements
  • Income Statements
  • Statement of Financial Position (Balance Sheet)
  • Cash flow Statements
• Identification & Evaluation of their Accounting Policies
• DuPont Analysis – Evaluating and Improving Return on Equity (ROE)
• Evaluation of their Share Price and Investment Performance
• Case Study: BP, Chevron, Shell and SABIC

Accounting for Upstream Activities with reference to IFRS

• Reserves and resources
• Exploration and evaluation
• Revenue recognition
• Assets
• Depletion, Depreciation & Amortisation (“DD&A”)
• Impairment of development, production and downstream assets
• Examples: BP, Chevron & Shell

Joint Arrangements, Financial Instruments and 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

Creative Accounting and Corporate Governance

• Creative Accounting – Enron and investor protection
• Leases – IFRS 16 (new standard)
• 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

For whom:  Accountants, Auditors, Human Resources Managers, Directors, Treasurers, Lawyers, and others who perform related functions in the Oil and Gas Industry.

Training Methodology                               

The training methodology combines lectures, discussions, group exercises and illustrations. Participants will gain both theoretical and practical knowledge of the topics. The emphasis is on the practical application of the topics and as a result participant will go back to the workplace with both the ability and the confidence to apply the techniques learned to their duties.

Date:

2nd – 5th April, 2019