2024
1st FINANCE AWARENESS SESSION. April 4, 2024. 

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Agenda. 2. Safety Moment CFO Opening Remarks Accounting Framework The Cost Journey | A Synopsis Direct vs Support Costs Cost Classification | Capex vs Opex What is Cost | Accruals vs Payments Cost Per Barrel & Unit Technical Cost Quiz Time Budgeting & Planning Cost Control Reporting Fixed Assets Cycle Q & As. 

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Safety Moment	 CFO Opening Remarks Accounting Framework The Cost Journey | A Synopsis Direct vs Support Costs Cost Classification | Capex vs Opex What is Cost | Accruals vs Payments Cost Per Barrel & Unit Technical Cost Quiz Time Budgeting & Planning Cost Control Reporting Fixed Assets Cycle Q & As

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CFO OPENING REMARKS
MR. KHALED AL JABERI. 

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Accounting Framework. 7. [March 2024]. Key Attributes Approved by the ADNOC Offshore Board & all amendments to it Sets Accounting policies to be followed to record transactions Provides direction on Governance & Procedures for Auditing, Budgeting & Cost Control Identifies reporting requirements & related policies & procedures Guides on Asset Sharing & Use of Spare Capacity In absence of specific guidance on a transaction, guides to refer to International Financial Reporting Standards. 

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Key Attributes Approved by the ADNOC Offshore Board & all amendments to it  Sets Accounting policies to be followed to record transactions Provides direction on Governance & Procedures for Auditing, Budgeting & Cost Control Identifies reporting requirements & related policies & procedures Guides on Asset Sharing & Use of Spare Capacity In absence of specific guidance on a transaction, guides to refer to International Financial Reporting Standards

THE COST JOURNEY | A SYNOPSIS
MR. KHALID SUDDLE. 

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THE COST JOURNEY | A SYNOPSIS
MR. KHALID SUDDLE

The Cost Journey | A Synopsis. 9. Budgeting / Planning Each & every activity is budgeted [following year] & planned [future four years] Bottoms up budget compilation Approval as per Governance policies. 

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Budgeting / Planning Each & every activity is budgeted [following year] & planned [future four years] Bottoms up budget compilation Approval as per Governance policies

Cost Classification Cost classified as Capex or Opex Accounting Guide governs classification policies Adherence to correct classification is imperative: ‘It’s the Law’

Cost Control Contracts issued in line with approved budgets Two types of Control AFE based / Non-AFE based with different levels of control No Budget = No Spending

Reporting & Approval Monthly performance review & reporting – CHs, ADNOC & BUs Formal approval through Statutory Financial Statements Approval as per Governance policies

Direct vs SUPPORT COSTS
MR. KHALID SUDDLE. 

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Direct vs SUPPORT COSTS
MR. KHALID SUDDLE

Direct vs Support Costs. 11. Capital Expenditure Directly Attributable to Concessions + A Portion from Logistics Support Costs. 

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Capital Expenditure

Directly Attributable to Concessions + A Portion from Logistics Support Costs

Operating Expenditure

Two Major Types of Operating Expenditure

Direct Costs

Directly Attributable to Concessions [e.g. Gas, Major Maintenance, Field expenses etc.]  Support Costs / Shared Costs

Common costs not directly attributable to a venture

HQ Costs
Technical & Support, Computing, Asset Integrity etc.

Non-HQ / Logistics Costs
Helicopter, Vessels, Fixed Wing etc

Allocation mostly based on Direct Manpower Costs

Allocation based on utilization of underlying resources e.g. No. of Helicopter Hours, No. of Passengers for Fixed Wing etc.

Allocation first based on any ASOs / Agreements with Ventures [LNG, Bunduq, Al Yasat etc.] Then based on various drivers

Includes 3rd Party Vendors & ADNOC HQ Shared Services Costs

2024 1st FINANCE AWARENESS SESSION