Upstream Petroleum Contracts, Accounting, Auditing Policies and Procedures
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Upstream Petroleum Contracts, Accounting, Auditing Policies and Procedures Course
Introduction:
This training course provides in-depth information on the types of upstream petroleum contracts what their differences are and what are the main contractual terms participants need to know to fully understand all types of Upstream Petroleum Contracts. The course will comprehensively cover Production Sharing Contracts, Exploration & Production Agreements (E&P) Exploration & Exploitation Contract, and License Agreement, and participants will take away essential elements of these contracts to be effectively used in their own companies. The training course will help participants understand the practical issues involved and the pitfalls to avoid.
Course Objectives:
By the end of this course, participants will be able to:
- Gain a full understanding of the different types of Upstream Petroleum Contracts
- Understand the main contractual terms and their differences between the various types of contracts from PSA, Service contracts, and others
- Be aware of the approaches to the negotiation of these contracts
- Incorporate the best terms into these Upstream Petroleum Contracts
- Develop an understanding of the accounting and auditing standards, policies, and practices used by Upstream Petroleum companies
- 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
- Understand the role and function of an Internal Audit Department
- Understand audit risk and efficiently plan, control, and record an audit assignment
Who Should Attend?
This training course is suitable for a wide range of professionals but will greatly benefit:-
- Senior contract negotiators and managers
- Legal managers, legal counsel
- Commercial and business managers
- Contracts administrators, and managers
- Commercial, financial, and insurance professionals
- Project and General Management personnel
- 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
Course Outlines:
Introduction and Overview of Upstream Petroleum Contracts
- A brief overview of the O&G industry
- Oil and gas terminology
- The Legal Framework for Upstream Contracts
- Introduction to contract formation
- Key oil and gas terminology
- Oil and gas industry structure
- Relationships between different players in the oil and gas industry
- Phases of the oil and gas industry
- Oil and gas contract fundamentals and legal principles
- Territorial water, continental shelf, and United Nations Convention on the Law of the Sea (UNCLOS)
Contracting in the Upstream Sector: Ownership and Licensing
Ownership and exploitation of reserves
- The ABCs of Petroleum Contracts: License-Concession Agreements, Joint Ventures, and Production-sharing Agreements
- Characteristics of upstream contracts
- Commercial realities of the oil and gas business
- Agreement with resource holders
- Ownership of oil and gas
- Risk Service Contracts (RSCs)
- Grant of rights by the resource holder
Host country's legal and regulatory framework and fiscal regime; stabilization
- Role of the host government
- Key Issues in international oil and gas contracts
- Negotiation framework and strategy; objectives of host countries/NOCs and IOCs
Host Government’s Role in Upstream (Exploration & Production (E&P)) Agreements
- Overview of upstream operations and E&P agreements (types and trends by region)
- Key differences between Production Sharing Contracts (PSCs), concessions, service contracts, and JV contracts
- Role of Host Government in Upstream Contracts
Production sharing contracts (PSC) & Joint Operating Agreements (JOA)
- Different approaches and levels of complexity
- New PSCs in key jurisdictions
- The role of calculation
- Understanding the formulas
- The non-fiscal legal and contractual terms
- Contractual terms and conditions
- Royalties and taxes
Commercial terms in licensing and concession agreements
- Fiscal arrangements, license fees
- Four key financial aspects of a PSC:
- Royalty, The R factor
- Cost oil
- Profit oil
- Taxation
- Bonuses, Penalties
- PSC – Cash Flow Distribution
- PSC – CF Distribution Example – Year N+1
- Comparison of Fiscal Systems
Joint Operating Agreements (JOAs)
- What is a Joint Operating Agreement (JOA)?
- Nature, aim, and functions of a joint venture
- Government approval
- Key areas of the JOA
- Purpose and scope: participating interests
Service Contracts, Farm-In and Farm-Out and Unitization - Risk bearing and Non-Risk Bearing Service Contracts
- Service Contracts
