Course Description

The contract should specify which costs are recoverable, the order of recoverability, any limits on recoverability, and whether costs not recovered in one period can be carried forward into the next period. Since title to the oil or gas in-place never passes to the contractor, cost recoverability is the mechanism whereby the contractor is able to recoup the costs that it has expended on a project

This 5-day course is designed to provide participants with the practical aspects of cost recovery. Starting with basic cost concepts, participants will then be exposed to cost recovery factors, activity and effectiveness, capital investment and operating expenses, interrelation between market price, production line and capital, operating cost carryover expense and ceiling of recovery, and concession agreement and cost recovery

Course Goal

To enhance the participant’s knowledge, abilities and skills necessary to understand and apply the concepts, principles, policies, and methods of cost recovery in Oil and Gas Companies.

Course Objectives

By the end of the course the participant will be able to:

1. Understand the basic cost terminology of accounting and controls
2. Determine cost recovery factors
3. Define activity and effectiveness
4. Understand capital investment and operating expenses
5. Identify the interrelation between market price, production line and capital
6. Understand operating cost carryover expense and ceiling of recovery.
7. Be aware with concession agreement and cost recovery

Course Outline

• Cost Terms
  1. Key Cost Concepts: Cost, Loss, and Waste.
  2. Expense and Expenditure
  3. Inventoriable and Non-inventoriable (Product and Period) Costs
  4. Manufacturing and Non-manufacturing
  5. Direct and Indirect Costs
  6. Fixed and Variable Costs
  7. Actual and Standard Costs
  8. Cost Centers and Cost Allocation
• Cost recovery factors, activity and effectiveness
  1. Recoverable Costs
  2. Recoverability Order
  3. Limits on Recoverability
  4. Cost Recovery Activity Statement
• Capital investment and operating expenses
• Interrelation between market price, production line and capital
• Operating cost carryover expense and ceiling of recovery.
• Concession Agreement and Cost Recovery

Who Can Benefit?

Controllers, senior finance managers, executives and those with expertise in their own fields who need to acquire expertise in financial management