Oil and Gas Upstream Finance: Contracts, Costs and Compliance Training Course
1Summary
A single clause in a production sharing contract can shift millions of dollars in cost recovery — which is why upstream oil and gas accounting is treated as its own discipline, not a variation on standard corporate finance. This Oil and Gas Upstream Finance: Contracts, Costs and Compliance Training Course from the Arab British Fellowship Training Academy gives analysts a working command of the contracts, costs, and controls unique to exploration and production.
Starting from the structure of the upstream industry itself, the course moves through contract types, joint venture accounting, cost and revenue recognition under IFRS and US GAAP, and the governance and audit practices that keep petroleum accounting credible. Attendees finish able to read a set of E&P financial statements and understand exactly what is driving the numbers.
2Objectives and target group
Who Should Attend?
- Financial analysts and project managers who need a working grasp of upstream accounting.
- Internal and external auditors specialising in the oil and gas sector.
- Legal counsels, insurance professionals, and investment analysts serving upstream clients.
- Government regulators and officials overseeing oil and gas company reporting.
Knowledge and Benefits:
By the end of the course, participants will be able to:
- Distinguish between the major upstream contract types and their financial implications.
- Account for joint ventures, cost allocation, and production sharing arrangements with confidence.
- Apply IFRS and US GAAP requirements to upstream revenue recognition and asset valuation.
- Evaluate internal controls, audit findings, and governance practices in petroleum accounting.
- Use financial analysis to support real decision-making in exploration and production projects.
3Course Content
Module 1: Why Upstream Accounting Is Different
- The structure of the oil and gas industry and its key players.
- What makes upstream financial reporting unique.
- Territories, national laws, and the legal environment around contracts.
Module 2: Understanding Upstream Contracts: Types, Ownership and Legal Frameworks
- Joint ventures, license concessions, and production sharing agreements.
- Oil and gas ownership and resource holder rights.
- The government's role in shaping upstream contracts.
Module 3: Production Sharing Contracts and Joint Operating Agreements in Practice
- How PSC calculations and R-factors work.
- Fiscal terms, royalties, and comparing fiscal systems.
- The nature and function of joint operating agreements.
Module 4: Service Contracts, Farm-Ins and Risk Allocation
- Risk-bearing vs. non-risk-bearing service contracts.
- Farm-in and farm-out arrangements.
- Unitisation and how risk gets allocated and insured.
Module 5: Negotiating and Renegotiating Production Sharing Contracts
- The government's negotiating position and priorities.
- Force majeure, dispute resolution, and local content clauses.
- How to stabilise or renegotiate an existing PSC.
Module 6: Revenue Recognition, Cost Accounting and Asset Valuation
- Recognising revenue from upstream contracts under IFRS.
- Profit oil, cost oil, and break-even calculations.
- Depletion, depreciation, impairment, and reserves reporting.
Module 7: Governance, Creative Accounting Risks and External Auditing
- Corporate governance structures in upstream companies.
- Spotting creative accounting practices.
- The role of external auditors in presenting credible financial reports.
Module 8: Internal Audit: Roles, Testing and Reporting
- Structure and roles within an internal audit department.
- Substantive testing and audit control processes.
- Reporting findings and managing post-audit follow-up.