This four-day course focuses on the accounting issues currently faced by the upstream oil and gas industry with an emphasis on operations under “Production Sharing Contracts”. It considers the accounting and financial reporting implications of all the main transactions undertaken in the upstream business, including cost allocation and capitalization, revenue allocation and the accounting issues faced by joint venture operations and operators of concessions and PSC’s. The course considers both internal accounting issues and financial reporting under US GAAP and IFRS frameworks; and is fully updated for new Standards effective for 2025 and beyond.
The course will include a wide range of learning and development approaches including:
- Lecture-based presentations
- Practice case studies
- Reviews of relevant financial statements
- Group exercises and discussions
- Expert tutor inputs
Specific areas treated include:
- Economics of production sharing contracts and accounting for cost oil, tax oil and profit oil
- Different contracting arrangements such as risked service agreements and consequences for financial reporting
- Property, plant and equipment
- Intangibles and in particular exploration and evaluation activities
- Reporting of oil and gas reserves
- The challenges posed by impairment reviews
- Provisions, particularly decommissioning costs
- Accounting for farm-in, farm-outs and joint arrangements
Why Attend?
Accountants and analysts in the upstream oil and gas sector face unique challenges. There are complex contractual arrangements, multiple financial reporting requirements and the fall in oil prices has triggered requirements for impairment reviews. Add to that, with the lack of clear guidance provided by IFRS and constant changes to the Standards, it is little surprise that this sector finds accounting for its transactions so difficult.
This course is intended to provide an in depth look at the accounting for these unique arrangements and help you and your team put them into practice effectively, and keep up to date with latest developments, and will consider the application of IFRS 15 on revenue and IFRS 16 leasing.
Course Format
The course format includes presentations on key aspects of the standards, small group exercises and longer workshop-style case studies focusing on issues common to the oil and gas sector, group discussions and reviews of relevant financial statements.
Pre-course Questionnaire
A pre-course questionnaire will be sent to you upon your registration which will allows you to raise your specific areas of interest. Alan will review and analyze these in advance and address them during the workshops, seeking to fully satisfy your learning needs.
Certificate of Attendance
Upon the successful completion of this course, you will receive a Certificate of Attendance bearing the signatures from both the Trainer and the Organizer. This Certificate will testify your endeavour and serve towards your professional advancement.
Agenda
Day 1
Background to Accounting Frameworks for Oil & Gas
- Oil and gas contracting arrangements: different types (PSC, risk sharing, tax and royalty), purpose, economics and impacts upon financial reporting
- Case Study: Identifying the key accounting issues posed by different contractual arrangements and accounting frameworks
Accounting for Exploration and Development
- Application to accounting procedures in PSCs and service agreements
The Full Cost Method of Accounting
- Comparison of key differences under US GAAP & IFRS
- Case Study: Accounting under the full cost method
Day 2
Successful Efforts: From Prospecting To Evaluation
- Application to accounting procedures under PSC’s
- Case Study: Accounting for costs, from prospecting to evaluation
Successful Efforts: Drilling & Development
- Case Study: Initial and subsequent accounting for drilling and non-drilling costs
Drilling and Development - Contractor Services and Leasing
- Identifying a lease under IFRS 16
- Case Study: Distinguishing lease from non-lease components and accounting for the lease
Drilling and Development - Capitalisation of Borrowing Costs
- Treatment of interest costs under PSC’s
- Case Study: Estimating borrowing costs for capitalisation
Day 3
Drilling and Development - Decommissioning Costs
- Case Study: Estimation, initial and subsequent accounting for decommissioning costs
Accounting Issues during Production
- Calculation and allocation of costs of production under PSC’s
- Case Study: In cost allocation, DD&A and impairment
Revenue Recognition, Measurement and Allocation
- Review IFRS 15: 5-step methodology
- Application of IFRS 15 in relation to technical service and similar contracts
- Case Study: Accounting for oil and gas imbalances
- Comprehensive Case Study: Calculating cost oil, tax oil and profit oil under PSC’s
Day 4
Joint Arrangement Accounting
- Differentiating joint arrangements from PSCs and other contractual arrangement
- Accounting for farm-ins and farm-outs and carried interests
- Case Study: Accounting for transactions between venturers
Reserves Estimation and Disclosure
- Comprehensive Case Study: Examining the impact of different scenarios on PSC reserves
- Case Study: Analysing Reserves Disclosure
Speakers
Alan Mayo,
Owner ,
MaltwayAlan Mayo FCA is a chartered accountant from the UK and a member of the Institute of Internal Auditors with 30 years’ professional experience.
Alan began his career with PwC where he spent 10 years conducting and managing external audits in the private sector. He then spent a further 10 years as a consultant with PwC leading training programs supporting major systems and process change, predominantly in the public sector.
On leaving PwC Alan formed his own training business which he has been running for the past 15 years. During that time he has worked on a wide range of financial training projects within the private, public and not-for-profit sectors.
Alan has conducted training courses worldwide covering aspects of risk management, internal control, operational and financial control, countering risk of fraud, financial reporting and audit for numerous organisations including Shell and Government Agencies such as London Boroughs of Lambeth and Ealing Council etc.
Who Should Attend
The course will be of benefit to all finance and accounting professionals who require an in depth understanding of oil and gas accounting procedures including those involved in the preparation, audit or analysis of oil and gas accounts particularly those working in PSC environments.
It will particularly benefit:
- Staff who are taking on increased financial or accountancy responsibilities including: Chief Accountants, Financial Accountants, Accounting Clerks, Joint Venture and Joint Operating Agreement Accountants, Internal and External Auditors, Financial Analysts from financiers and regulators etc
- Those accountants, auditors and analysts who are relatively new to the oil and gas industry
Participants shall have a fair working knowledge of general accounting principles and practices.
Location
ADDRESS
Crowne Plaza Muscat Oman Convention & Exhibition Centre (OCEC)
Al Jamah Al Akbar Street, Madinat Al Irfan,
Muscat, Sultanate of Oman
Muscat
Oman
DIRECTIONS
DETAILS
- Overlooking the Gulf of Oman, and adjacent to the Oman Convention and Exhibition Centre, this modern hotel is 11 km from the Muscat International Airport.
- Bright and contemporary rooms feature free Wi-Fi, flat-screen TVs, and garden, pool and/or gulf views. All have minibars, and tea and coffee makers. Room service is available 24/7.
- Parking is complimentary. Other amenities include a 24-hour gym, an outdoor infinity pool, and spa with a sauna and a steam bath. A rustic-chic Thai restaurant is on-site, as are 2 bars and a ballroom. An available breakfast buffet is served in a warm eatery offering Arabic, Asian and international cuisines.
