Joint Venture & Production Sharing Accounting

This section of the course aims to enhance your knowledge of joint venture and production sharing accounting issues. Particular emphasis will be placed on understanding the accounting requirements resulting from joint venture (JV) and production sharing. Reference will be made to sample JV and production sharing agreements from different countries and to attempts in the industry to standardise accounting practice, e.g. COPAS, SOAP. You will be encouraged to challenge traditional methodology in order to develop models of good practice that they can apply back in their workplace.

It is not a pre-requisite that you have previously attended our Level 1 course but this normal progression is strongly recommended. The Level 2 course should be attended by:

• those who have attended our Level 1 course and who now feel ready to progress to a more advanced level of knowledge and understanding
• those with a good foundation knowledge in the subject area of each module.

Companion courses available are Exploration and Production Accounting Level 1, Exploration and Production Accounting Level 3 and Auditing in the Exploration & Production Industry.

Joint Venture Agreements
• The JV agreement and its management
• Review of the accounting procedure
• The role of JV audit

Accounting for JV Agreements
• The principles and practice of accounting for JV agreements

JV Cash Management
• Cash calling, invoicing and cash management

JV Billing Arrangements
• How to account for JV billing statements

JV Cost Allocation
• Key issues in allocating JV costs

Unitisation and Redetermination
• How to account for product and cost sharing changes following an equity redetermination

Materials & Inventory Accounting
• Understanding the accounting for material purchases and inventory movements

Production Sharing Contracts
• Understanding the different types of PSC in use around the world
• Risk Service Contracts
• Understanding the differences between a PSC and a Concessionary system
• Calculating government take and company take
• Cost Oil and Profit Oil calculations
• Understanding ‘R’ factors and their application
• Product allocations and pricing conventions
• Accounting for carried interests

Accounting for PSCs
• How to account for PSCs
• Understanding some of the key issues of PSC accounting such as double taxation

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