Alert

This section covers those matters which OIAC wants to bring urgently to industry's attention. It will be updated following each OIAC committee and EIG meeting.

The last committee meeting of OIAC was held on 1 October 2003.

Committee changes

Alan Thomas of Kuwait Petroleum International is the current Chairman.

The full list of current members, together with their affiliations, is set out in People.

OIAC projects

SORP Update

In accordance with the UK Accounting Standards Board ("ASB") Policy and Code of Practice, which regulates SORP making bodes such as OIAC, the OIAC performs regular reviews of the Statements of Recommended Practice it has issued to take account of the implications of any new Accounting Standards or other pronouncements made by the ASB and to make any other amendments as considered necessary to improve the guidance provided.

OIAC is currently in the process of updating the SORP, to incorporate further guidance on a number of issues, including government levies following the publication of FRS19 - Deferred Tax,  production sharing contracts, and trading. 

The previous review was carried out during 2000, and the current SORP reflects the amendments considered necessary as a result of that review. The Exposure Draft was considered by the ASB and cleared for publication at its meeting on 30th November 2000. The final draft of the SORP was submitted to the ASB on 27 April 2001 and was considered at the Financial Sector and Other Special Industries Committee (FSOSIC) meeting on 15 May 2001. It was considered by the Board of the ASB in June 2001 and approved for publication.

SORP

A viewable copy of the current SORP is contained in Pronouncements.

Other ongoing OIAC Projects

FRS19 - Deferred Tax

Following the publication of FRS19, OIAC was asked to give guidance on the accounting for Government Levies on Upstream Oil and Gas Operations.  A Guidance Note was issued for comments in May 2003.  All comments were received by 8 August 2003 and were in support of the Guidance Note.  OIAC plan to incorporate this guidance in the next SORP update.

The Government Levies Guidance Note is viewable from this site.

Production Sharing Contracts (PSC's)

OIAC has been reviewing the available guidance on Production Sharing Contracts ("PSC's").  At the current time there is limited guidance on the treatment of PSC's under UK Generally Accepted Accounting Practice (GAAP), and this has lead to a great deal of diversity in the treatment of these contracts amongst oil companies.

PSC’s are agreements between the oil company or oil companies (usually known as the "contractor") and the host country government and/or national oil company and contain terms in respect of one or more of the following: the sharing of oil produced (with the government share representing a form of taxation); other provisions as to taxation; royalties; government or national oil company participation as a member of the contractor group; and carries of the government or national oil company participation.

PSC's differ in a number of significant ways from the license arrangements that are common in the UK and the US. 

In recent years the focus of exploration for most UK oil companies has shifted to less developed areas of the world.  In these areas it is usual for the oil company to enter into a PSC. 

Current ASB projects that might have a specific impact on the Oil & Gas Industry

The ASB reports on current projects and activity in a quarterly newsletter "Inside Track". This newsletter is available through the ASB web site.