Upstream Petroleum Contracts, Accounting and Auditing Policies and Procedures
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Upstream Petroleum Contracts, Accounting and Auditing Policies and Procedures Course
Introduction:
This training course offers detailed insights into various types of upstream petroleum contracts and their distinctions. Participants will gain a comprehensive understanding of the main contractual terms essential for comprehending all types of Upstream Petroleum Contracts. The course will extensively cover Production Sharing Contracts, Exploration & Production Agreement (E&P), Exploration & Exploitation Contracts, and License Agreements. Participants will acquire essential elements of these contracts that can be effectively applied within their own companies. By attending this training course, participants will develop a practical understanding of the associated challenges and pitfalls to avoid in the field.
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
- Relationship 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 PSC’s 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 to 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 int