Methods of accounting

There is some disagreement among experts over the correct way to account for oil and gas properties, cut companies normally follow Generally Accepted Accounting Principles (either UK or US) and use a method known as ‘successful efforts’. In this method, all property acquisitions, successful exploratory wells, all development costs (including development of dry holes) and support equipment and facilities are capitalized, and are therefore seated as assets in the company’s balance sheet.

On the other hand, in this method, unsuccessful exploratory wells are charged to expense at the time it is agreed that the wells are non-productive, and recorded in the profit and loss account. In the alternative method – ‘full-cost accounting’ – all operations are capitalized whether successful or unsuccessful.

Items such as overheads and direct costs incurred in E&P are normally placed in the P&L account, but the treatment of items such as depreciation, depletion of any unproved reserves, or the costs of clean-up operations, varies widely from company to company.

In an industry where cross-border mergers and acquisitions are commonplace, factors such as national differences of accountancy principles, frequent changes to legislation, the use of estimation and currency fluctuations combine to make oil and gas accountancy a highly complex operation.

Task 2. Fill in the gaps with following words:

Задание 2. Заполните пропуски следующими словами: produce, producers, producing, production, productive, productivity, products

1. We need to improve the _____ of the drilling crew. They're just not working hard enough.

2. It was a very _____ meeting. We made a lot of good decisions.

3. Demand is very high at the moment. Can we increase _____ by around 10%?

4. A number of African countries have started to _____ oil and gas recently.

5. Saudi Arabia is the biggest oil-_____ country in the world.

6. Refined petroleum _____ are usually grouped into three categories based on the way the crude oil is distilled.

7. OGP is the International Association of Oil and Gas _____ .

Задание 3. Выучите диалог наизусть:

Task 3. Learn this dialogue by heart:

Brian: Hi Keith, how’s it going?

Keith: Fine, thanks – really busy, were planning a lot of new campaigns.

Brian: That’s good news. Listen, about the Kazakhstan bid.

Keith: Yes, how can I help?

Brian: Well, we need to set our prices and I was wondering if you could help out.

Keith: Sure – who else is bidding, do you know?

Brian: Not for certain, but I have a feeling there’ll be plenty of competition.

Keith: So we’ll need to be pretty sensitive. We may need to discount quite heavily.

Brian: Maybe. But I know that they would rather have good quality than something cheap and shoddy.

Keith: What level of service are they looking for?

Brian: Well, I think platinum will probably be too pricey for them, but I think they’ll go for gold, if we twist their arms.

Keith: Yes, we don’t want to price them out of the market, do we?

Brian: No, definitely not.

Keith: OK, Brian – can you send me details and I’ll give it some thought.

Task 4. Fill in the gaps with following words:

Задание 4. Заполните пропуски следующими словами: product, price, place and promotion

To create the right marketing mix, business have to meet the following conditions:

The goods must be in the right (1) _____ at the right time. Making sure that the goods arrive when and where they are wanted is an important operation.

The (2) _____ must be right. Consumers will need to buy in large numbers to produce a good profit.

The (3) _____ has to have the right features – for example, it must look good and work well.

The target group needs to be made aware of the existence and availability of the product through (4) _____.

Task 5. Cross out the unnecessary word, put other word in the correct order to form phrases as in the example:

Задание 5. Исключите лишнее слово, другие расставьте в правильном порядке, образуя выражения как в примере :

Например: account | and | loss | balance | profit profit and loss account

1 incur | costs | facilities | unnecessary

2 exploratory | varies | unsuccessful | wells

3 to | charged | fluctuation | expense

4 reserves | of | overheads | depletion | unproved

5 and | mergers | acquisitions | capitalized | cross-border

6 sophisticated | operation | liabilities | highly

Task 6. Fill in the gaps with following words:

Задание 6. Заполните пропуски следующими словами: price sensitive, set the price, pricey, price them out of the market, up our prices, price-fixing, agree a price, giving them a good price

1. We'll need to _____ if we want to make a profit on the deal.

2. By _____ we'll be able to insist on better payment terms.

3. I wouldn't _____ too low - they'll think our quality is poor.

4. Oil and gas services are becoming very _____ as competition increases.

5. I'm afraid these diamond bits are much too _____.

6. I don't think we should go any higher. We don't want to _____.

7. The big oil companies were accused of _____.

8. If we fail to _____ we'll have to find another supplier.

Task 7. Retell the text using new words and word combinations:

Задание 7. Перескажите текст, используя новые слова и словосочетания.

Практическое занятие 4

Leasing Agreement

Договор лизинга

to be agreed соглашаться

to remain оставаться, находится

in force имеющий силу, действующий

whatsoever абсолютно, какой-либо. Совершенно

therewith к тому же, немедленно, вследствие того

hereinafter ниже, в дальнейшем, впредь

acreage площадь

to terminate завершать, истекать, приводить

reworking переработка, восстановление, повторная разработка

cessation приостановка, прекращение, отмена

Task 1. Read and translate the text:

Задание 1. Прочитайте и переведите текст: