E&P Cost Auditing

Course Description

This technical course is intended for empower participants such that they can effectively audit costs in a Production Sharing Contract (PSC) and Service Contract types in oil and gas exploration and production operations.

Participants taught how to effectively audit costs such that they can effectively ensure adequate cost recovery even where there is no cost recovery ceiling (limit) in the contract terms or fiscal regime.

Each participant will be able to query cost items and highlight errors in cost bookings thereby building the true basis for cost minimization and cost recovery after attending this course.

The program will be taught in an interactive classroom environment interactive exercises and case studies.

The major highlights and what participants will learn in this program include the following:

1. To enable understanding of Cost Auditing and enhance understanding of key areas of conflict in cost recovery with a view to resolving these problems.
2. To highlight how to ensure that control is effective through budget-based cost auditing.

Course Content

1. Cost Classification & Cost Types (e.g. Approved, Committed, Incurred, Invoiced & Forecast Costs)
2. Typical Problems in Cost Classification (e.g. Allowable & Non-Allowable Costs)
3. Accounting for Exploration, Drilling & Production Costs
4. Cost Centre Accounting
5. Cost Allocation (Direct & Indirect Costs)…The unknown Head Office Cost.
6. Budgeting & Cost Control:
7. Budgeting Process
8. Costing in Budget Preparation
9.  Work Program Based Budgeting
10. Budget Based Cost Auditing
11. Cost Allocation for Budgeting
12. Budget Carryovers
13. Working Capital Budgeting
14. Cost Auditing:
15. Budgeted Cost, Actual Cost & Treatment of Variations
16. Performance Based Cost Auditing

• Disputed Costs Origination & Treatment
• Authorization for Expenditure (AFE) in Cost Auditing including AFE Clearances.
• Common Cost Auditing