About this Virtual Instructor Led Training (VILT)
This 5-day intermediate-level Virtual Instructor Led Training (VILT) aims to provide a deeper knowledge and understanding of E&P accounting, finance principles and concepts for those who have already been working in the sector for several years and are ready to improve their understanding to support career aspirations.
The Virtual Instructor Led Training (VILT) provides a sound understanding of accounting and finance related issues, policies and practices specific to Exploration and Production (E&P) sector of the international oil & gas industry. It provides a brief overview of how the technical work of E&P, exploration, development and production, takes place and the types of costs involved at each stage. You will explore each of the stages in the lifecycle of an oil & gas project from rank exploration to production.
You will be exposed to how these activities are accounted for under international financial reporting standards, IFRS, and GAAP (particularly US GAAP). You will learn how to account for international E&P activities with multiple projects at various stages in their lifecycle. And finally, you will appreciate how the operator of a joint venture incurs expenditures under the terms of a joint venture agreement (JOA) so that they are accounted for under the correct joint venture and reported against the approved budget and AFE for cost control purposes.
The training and knowledge gained on the Virtual Instructor Led Training (VILT) will enable you to actively participate in improving practice and procedures within their functions and be more confident in engaging with non-finance colleagues. An emphasis on the nomenclature and terminology will be clearly defined to demystify the industry and enable more effective communication with colleagues from non-financial backgrounds when discussing issues and requests for information for financial purposes.
From attending this 5-day intermediate-level Virtual Instructor Led Training (VILT), you will be able to:
- Understand the main elements and processes of a simple petroleum system, the stages of an upstream oil and gas project lifecycle from rank exploration to production, understand the value chain for E&P companies and know the primary factors affecting commerciality of oil and gas fields.
- Become familiar with current list of international financial reporting standards (IFRS & IAS), the bodies that regulate accounting (IASB) and issue standards that affect the way that we account for E&P. You will also understand the IFRS conceptual framework, the format for financial statements required under IFRS and definitions of subsidiary, associate, control and significant influence which relate to group accounting (IFRS 3, 10, 11 and 12; IAS 27 & 28).
- Understand the main accounting policies used by E&P companies and be able to determine their impact on financial performance. Know the difference between successful efforts and full cost accounting, understand the problem E&P companies face in meeting the normal criteria for recognition of an asset (IAS 16 and 37) and the interim guidance provided by IFRS 6: the new terminology (E&E assets, CGU), the ability to reclassify E&E assets, and how and when to carry out impairment tests on E&E assets.
- Be familiar with the details and purpose of joint venture agreements (JOAs), the relevance of the main contractual terms for finance and accounting and the key documents (budgets, AFEs, cash calls, JIBs and advance accounts). Understand the purpose and key contractual terms for production sharing contracts (PSCs), their importance for finance and accounting and the key documents (budgets, AFEs and cost recovery statements). Understand the meaning of terms such as cost oil, profit oil, excess cost oil and the methods of calculation of entitlement used in PSCs.
- As an operator, how to prepare budgets, AFEs and cash calls, and the systems, procedures and controls needed to capture, record, monitor and analyse expenditures incurred under joint budgets and AFEs and paid from joint funds in compliance with joint venture agreements. Know the different types of costs incurred during each stage of E&P activities, and how they should be reported on an operator billing statement.
- As an equity interest owner, be able to apply your company’s accounting policies to correctly account for exploration & evaluation costs under IFRS 6, determine when this expenditure can be treated as an asset under IAS 16 & 37, how the various methods for calculating DD&A are applied, the date from when an asset must be depreciated and which assets can be grouped under IFRS for depreciation purposes.
- Know the difference between direct, indirect and allocated costs and how to establish effective systems and reporting to control capital expenditures during well drilling and project development and operating costs during the production. Be able to work with technical colleagues to generate cost estimates and accrual information to improve the timeliness and accuracy of financial information for cost control reporting.
- Understand the problems of revenue recognition in oil and gas activities and how revenue should be reported under IFRS (IAS 18). Understand what is meant by underlift and overlift positions and know how to calculate and report revenue under IFRS. Know how to calculate revenue under IFRS for a gas sales contract that includes a “take or pay” clause.
This Virtual Instructor Led Training (VILT) has been developed for accounting and finance staff within the industry who need to gain a more detailed understanding of the fundamentals of upstream oil and gas accounting. It is also relevant to those within the industry who have responsibility within their area of activity to provide information to be used for financial purposes and to use information provided by finance and accounts for analysis in decision-making.
Suggested attendees include, but not limited to:
- Asset managers
- Budgeting & Planning Executives
- Financial Analysts and Modellers
- Internal Auditors
- Joint Venture Accountants
- Management Accountants
- Project Costing Professionals
Your course leader is an oil and gas consultant specialising in commercial, financial and accounting matters. In a career spanning over 35 years he has worked in the UK, Denmark, Netherlands, Norway, Yemen, Oman, Guatemala, Colombia and Egypt. He has significant sector-specific financial, transactional and commercial experience gained at senior management and board level.
His industry experience includes listing an E&P Company on AIM, Debt and Equity Fundraising, Annual Report and Accounts, Mergers and Acquisitions, Deal Negotiation and Closure, General Management, Project Evaluation, Negotiation of Exploration and Exploitation Licences, Negotiation of Joint Operating Agreements, Financial Management, Internal and Joint Venture Accounting and Reporting, Accounting Design and Implementation.
Previous roles included CFO & Company Secretary for Taghmen Energy Plc, General Manager for LUKoil’s operations in Egypt, Finance Director of Felix Mining Ltd, and Deputy General Manager & Finance Manager for Nimir Petroleum Company, Yemen. From 1989 to 1992, he worked for Kerr McGee plc as Accounting Manager, UK. Prior to 1989, he worked for Texas Eastern North Sea (UK) Inc, Charterhouse Petroleum plc and Phillips Petroleum (Europe Africa) Inc. He holds an Honours Degree in Economics from the University of Wales, Swansea and is a Fellow of the Institute of Chartered Management Accountants.
Learn what past participants have said about PetroEdge training courses
It’s a good course for staff with some background on this industry.