**INTRODUCTION**

This GLOMACS training course on **Upstream Petroleum Contracts, Accounting & Auditing Policies and Procedures** offers comprehensive insights into the various types of upstream petroleum contracts, their distinctions, and the essential contractual terms necessary for a complete understanding of these agreements. Participants will explore Production Sharing Contracts, Exploration & Production Agreements, License Agreements, and more, equipping them with vital elements to apply within their organizations. The course emphasizes practical issues and identifies common pitfalls to avoid.

Additionally, this training will enhance participants’ skills in preparing and evaluating upstream petroleum accounts, thereby improving their organization’s internal audit functions. It focuses on the latest techniques for assessing financial, operational, and social performance, alongside relevant International Financial Reporting Standards (IFRS) applicable to account preparation. Delegates will learn to prepare financial statements in accordance with IFRS and make strategic decisions to bolster their organization’s financial performance. The development, monitoring, and continuous improvement of an integrated internal audit function will support sustained financial success and growth.

**Key Highlights of the Training:**

– Fundamental types of upstream petroleum contracts
– Advantages and disadvantages of various contract types suitable for specific projects
– Details of concessions, production sharing, and risk service contracts
– The role of Joint Operating Agreements (JOA) in upstream petroleum contracting, including dispute resolution strategies
– Essential terms of unitization and farm-in, farm-out agreements
– Preparation of financial statements in alignment with IFRS
– Latest international tools and techniques for evaluation and performance measurement
– Lessons learned from leading international upstream petroleum companies
– Various audit types and their respective benefits
– Effective planning, controlling, and recording of audit assignments

**MODULES**

This training course consists of two modules:

– **MODULE I – Upstream Petroleum Contracts**
– **MODULE II – Upstream Petroleum Accounting**

Each module is designed to stand alone, but participants will gain maximum benefit by attending both modules consecutively over a two-week period.

**Objectives**

By the end of this training course, participants will be able to:

– Fully comprehend the different types of upstream petroleum contracts
– Recognize the main contractual terms and their variations among different contracts, including PSAs and service contracts
– Understand negotiation approaches for these contracts
– Integrate optimal terms into upstream petroleum contracts
– Grasp the accounting and auditing standards, policies, and practices used in upstream petroleum companies
– Enhance the relevance and reliability of financial reports to meet user needs
– Leverage publicly available information for benchmarking business performance
– Understand the role and function of an Internal Audit Department
– Efficiently plan, control, and record audit assignments while managing audit risks

**Training Methodology**

Participants will engage with the material through presentations by experienced international practitioners, case studies from the upstream petroleum sector, discussions, group work, and interactive exercises. This diverse methodology ensures that delegates acquire transferable skills and up-to-date knowledge.

**Organizational Impact**

Mastering upstream petroleum contracts and managing accounting & auditing policies will allow organizations to:

– Negotiate contracts beneficial for both the short and long term, considering future industry changes
– Enhance the expertise of personnel handling accounting and auditing procedures
– Identify and mitigate risks associated with upstream contracts
– Improve internal auditing capabilities in critical areas
– Manage claims and disputes more effectively by adopting collaborative approaches
– Boost contract personnel’s negotiation skills and confidence
– Provide better financial support to frontline departments
– Ensure greater relevance and reliability of financial and management information
– Foster strategic thinking and performance focus
– Optimize the use of financial statements for better decision-making
– Enable finance managers to work with increased autonomy
– Prepare staff for greater responsibilities

**Personal Impact**

Participants will benefit personally from this training course through:

– In-depth knowledge of upstream contracts and insights into essential contract clauses
– Enhanced risk management related to upstream contracts through improved accounting and auditing practices
– Smoother administration of upstream contracts
– A better understanding of auditing procedures and critical issues involved
– Strengthened negotiation and dispute management capabilities
– Increased awareness of industry practices, challenges, and solutions
– Enhanced confidence and motivation in the workplace
– Greater job satisfaction from delivering quality support to management
– Improved ability to supervise, develop, and motivate colleagues

**WHO SHOULD ATTEND?**

This training course is suitable for a diverse range of professionals, including:

– Senior Contract Negotiators and Managers
– Legal Managers and Counsel
– Commercial and Business Managers
– Contracts Administrators and Managers
– Commercial, Financial, and Insurance Professionals
– Project and General Management Personnel
– Corporate Accountants, Financial Controllers, and Treasury Officers
– Finance Staff in General Accounting, Payables, Receivables, and Inventory
– Joint Venture Accountants and Auditors
– External, Financial, and Internal Auditors
– Government Regulators and Auditors
– Financial and Investment Analysts

**Course Outline**

**Module 1: Upstream Petroleum Contracts**

*DAY 1: Introduction and Overview of Upstream Petroleum Contracts*
– Overview of the Oil & Gas Industry
– Key Oil and Gas Terminology
– Legal Framework for Upstream Contracts
– Introduction to Contract Formation
– Industry Structure and Player Relationships
– Oil and Gas Contract Fundamentals
– Territorial Waters and UNCLOS

*DAY 2: Contracting in the Upstream Sector: Ownership and Licensing*
– Ownership and Exploitation of Reserves
– Types of Petroleum Contracts: License-Concession Agreements, Joint Ventures, Production-sharing Agreements
– Commercial Realities and Resource Holder Agreements
– Risk Service Contracts (RSCs) and Grant of Rights
– Host Country’s Legal and Regulatory Framework
– Negotiation Framework and Strategy

*DAY 3: Production Sharing Contracts (PSC) & Joint Operating Agreements (JOA)*
– Commercial Terms in Licensing and Concession Agreements
– Financial Aspects of PSC: Royalty, Cost Oil, Profit Oil, Taxation
– Cash Flow Distribution Examples
– Overview of Joint Operating Agreements

*DAY 4: Service Contracts, Farm-In and Farm-Out, and Unitization*
– Nature and Subject Matter of Farm-Out Agreements
– Unitization and Unit Operating Agreements
– Government Approval for Unitization

*DAY 5: Negotiating Production Sharing Contracts*
– Government Take and Production Share
– Local Content and Force Majeure
– Dispute Resolution and Stabilization Provisions
– Negotiation Simulation Exercise

**Module 2: Upstream Petroleum Accounting**

*DAY 6: Major Accounting & Auditing Issues in the Upstream Petroleum Sector*
– Latest Issues Facing the Sector
– Impact of Commodity Prices and Political Developments
– Overview of IFRS for Upstream Oil & Gas Accounting

*DAY 7: Accounting for Revenue & Costs in the Upstream Petroleum Sector*
– Revenue Recognition and IFRS 15
– Cost Analysis for Acquisition, Exploration, and Production
– Evaluating Profitability in Leading Companies

*DAY 8: Accounting for Assets in the Upstream Petroleum Sector*
– Reserves and Resources Management
– Depletion, Depreciation & Amortisation
– Evaluating Assets of Leading Companies

*DAY 9: Creative Accounting, Corporate Governance & Auditing*
– Exploring Creative Accounting Practices
– Role of Corporate Governance and Audit Committees
– Internal and External Auditing in the Oil & Gas Industry

*DAY 10: The Internal Audit Function*
– Establishing Internal Audit Roles
– Types of Audits and Planning Processes
– Communicating Audit Findings and Conducting Exit Conferences*