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Institute For Oil & Gas Training
OGI-1080 New

Petroleum Industry Accounting Fundamentals Training Course

Duration
5 days
CPD hours
15
Language
English
Next date
18 Jan 2027
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Overview

Petroleum Industry Accounting Fundamentals from The Institute For Oil & Gas Training provides a practical foundation in the financial and management accounting principles applied across the oil and gas sector. The course develops professional capability in exploration and production accounting, petroleum accounting terminology, cost classification, asset accounting, revenue recognition and financial reporting across the hydrocarbon value chain.

Oil and gas accounting requires a clear understanding of how financial transactions relate to technical and commercial activities. Exploration, appraisal, development, production, transportation, processing, refining and marketing generate different accounting considerations, cost structures and reporting requirements. Finance professionals therefore need to understand both accounting principles and the operational context in which those principles are applied.

The Institute For Oil & Gas Training designed this course for professionals who need to connect accounting information with the realities of upstream, midstream and downstream operations. Participants examine how expenditure is identified, classified, accumulated, capitalised or expensed and ultimately reflected in financial statements and management reports.

A central focus is the accounting treatment of exploration and evaluation expenditure. The course compares the successful efforts method and full cost method, explaining how each approach affects cost recognition, capitalisation, depreciation, amortisation, impairment and reported financial performance. IFRS 6 permits entities to continue certain existing accounting policies for exploration and evaluation expenditure, while practice includes both successful efforts and full cost approaches.

The programme also addresses oil and gas accounting standards and the relationship between industry-specific accounting requirements and wider financial reporting principles. Participants work with concepts associated with IFRS 6 Exploration for and Evaluation of Mineral Resources, IAS 16 Property, Plant and Equipment, IAS 36 Impairment of Assets, IFRS 15 Revenue from Contracts with Customers and IFRS 9 Financial Instruments, according to the relevant accounting issue. IFRS 6 specifically addresses exploration and evaluation expenditure for resources including oil and natural gas and requires impairment assessment when relevant indicators arise.

The course goes beyond theoretical accounting treatment by examining the information flows behind the financial numbers. Participants explore the structure and application of a chart of accounts, cost centres, asset registers, joint venture accounting information, production data, inventory movements, revenue streams and management reporting.

The result is a stronger understanding of how accounting supports commercial control throughout the hydrocarbon value chain. Finance and accounting professionals gain the ability to interpret operational information, challenge accounting classifications, improve reporting quality and communicate effectively with technical, commercial, operations and management teams.

Objectives

  • Explain the fundamental principles of petroleum accounting across the upstream, midstream and downstream sectors.

  • Apply essential petroleum accounting terminology accurately in professional discussions and reporting.

  • Describe the principal accounting considerations throughout the hydrocarbon value chain.

  • Distinguish exploration, evaluation, development, production and operating expenditure.

  • Explain the purpose and structure of a chart of accounts for an oil and gas organisation.

  • Assess the accounting treatment of exploration and evaluation expenditure.

  • Compare the successful efforts method and full cost method and understand their financial reporting implications.

  • Apply relevant principles from IFRS 6 to exploration and evaluation activities.

  • Explain the relationship between oil and gas accounting standards and wider financial reporting requirements.

  • Understand accounting considerations for property, plant and equipment associated with petroleum operations.

  • Apply principles relating to depreciation, amortisation and impairment of relevant assets.

  • Understand revenue accounting considerations for hydrocarbon sales and related customer contracts.

  • Recognise the importance of accurate production, inventory and revenue data in petroleum accounting.

  • Interpret accounting information generated across exploration and production accounting activities.

  • Strengthen communication between finance, operations, engineering, commercial and management functions.

  • Improve the quality, consistency and usefulness of financial information used for operational and management decisions.

Training methodology

The Institute For Oil & Gas Training uses an applied corporate training approach throughout Petroleum Industry Accounting Fundamentals. Delivery combines structured technical briefings with practical exercises designed around situations encountered in petroleum companies.

Case studies are used to connect accounting principles with upstream, midstream and downstream activities. Participants examine realistic accounting scenarios involving exploration expenditure, drilling activity, development costs, production assets, inventory, transportation arrangements, hydrocarbon sales and asset impairment.

Practical exercises focus on the accounting decisions that professionals encounter in their roles. These include identifying capitalisable expenditure, distinguishing operating costs from capital expenditure, organising costs within a chart of accounts and evaluating the accounting consequences of unsuccessful exploration activity.

Scenario-based exercises also compare the successful efforts method with the full cost method. This approach enables participants to understand how different accounting policies affect cost accumulation and the presentation of financial information. The distinction is important because successful efforts accounting generally capitalises expenditure associated with successful exploration and development, whereas full cost accounting accumulates qualifying exploration and development costs within defined cost pools.

Group exercises develop the ability to discuss accounting issues across functional boundaries. Participants consider information supplied by geology, drilling, production, procurement, commercial and finance teams before determining the appropriate accounting treatment.

Real-world scenarios are used to strengthen understanding of petroleum accounting terminology and the connection between operational events and accounting entries. Participants work through examples involving licences, seismic activity, exploratory wells, development expenditure, production volumes, lifting arrangements, inventory, depreciation and impairment.

The methodology is designed to make accounting concepts directly relevant to professional decision-making. Rather than treating accounting as an isolated finance function, the programme demonstrates how accounting information reflects the commercial lifecycle of an oil and gas asset.

Organisational impact

Petroleum Industry Accounting Fundamentals strengthens the connection between operational activity and financial reporting. For sponsoring organisations, this creates a more consistent accounting framework across functions and assets.

A stronger understanding of cost classification helps finance teams distinguish exploration, development, production and operating expenditure more consistently. This supports clearer financial reporting and improves the quality of information available to management.

Improved understanding of the chart of accounts supports more effective cost coding and reporting. When accounting structures reflect the operational realities of petroleum activities, organisations gain clearer visibility of expenditure by asset, activity, project, cost centre and operational stage.

The programme also strengthens control over exploration and production accounting. Participants learn how operational events influence accounting records, helping finance teams identify the information required from technical and operational departments.

Understanding the successful efforts method and full cost method enables organisations to assess the accounting policies applicable to their reporting environment and understand their implications for asset balances, expenditure recognition and financial performance. Both methods are recognised approaches in oil and gas accounting practice, although their detailed application depends on the applicable reporting framework and accounting policy.

The course supports better impairment awareness by developing understanding of the circumstances in which petroleum assets and exploration and evaluation assets require assessment. IFRS 6 requires impairment testing when facts and circumstances indicate that the carrying amount of exploration and evaluation assets could exceed recoverable amount.

Organisations also benefit from improved cross-functional communication. Finance professionals who understand petroleum operations can communicate more effectively with geoscience, engineering, production, procurement, commercial and supply chain teams.

The practical outcome is stronger accounting discipline, improved information quality, more consistent application of accounting policies and better management visibility across the hydrocarbon value chain.

Personal impact

Participants develop a practical understanding of accounting principles that are directly relevant to oil and gas operations. This strengthens their ability to analyse transactions, question accounting treatments and interpret financial information in an operational context.

The course builds confidence in using petroleum accounting terminology when working with finance, engineering, production, commercial and management colleagues. Participants gain a clearer understanding of the language used across exploration and production accounting and the wider petroleum industry.

Finance professionals strengthen their ability to analyse exploration and evaluation costs, development expenditure, production-related costs, asset balances and revenue transactions. They also gain a structured framework for considering the accounting implications of operational events.

Participants develop practical knowledge of the successful efforts method and full cost method and understand how these approaches affect the recognition and accumulation of petroleum-related expenditure. This provides a stronger foundation for reviewing accounting policies and financial reports.

The course also supports career development by broadening participants beyond general accounting knowledge into sector-specific financial capability. Professionals working in oil and gas finance, controllership, reporting, audit, cost control, commercial finance and management accounting gain a clearer understanding of the business activities behind the figures they report.

The programme further develops analytical and communication skills. Participants learn to interpret accounting information alongside operational information and explain financial consequences in language that non-finance colleagues can understand.

Who should attend

Oil and Gas Accountants

Designed for accountants responsible for recording, analysing and reporting transactions generated by petroleum operations.

Financial Controllers

Relevant for controllers overseeing financial reporting, accounting policies, asset accounting and control frameworks within oil and gas organisations.

Management Accountants

Supports professionals responsible for cost analysis, budgeting, performance reporting and management information across petroleum operations.

Finance Managers

Provides sector-specific knowledge for managers supervising accounting teams and financial processes across oil and gas assets.

Cost Engineers and Cost Controllers

Helps professionals connect operational expenditure with accounting classifications, cost centres, projects and management reporting.

Joint Venture Accountants

Supports professionals dealing with financial information, expenditure allocations and accounting records associated with petroleum joint venture activities.

Commercial Finance Professionals

Provides the accounting perspective required to understand hydrocarbon sales, revenue flows, contracts and commercial transactions.

Internal Auditors

Strengthens understanding of petroleum accounting processes and the operational context required when reviewing financial controls.

External Auditors

Provides industry-specific context for professionals examining accounting treatments, financial statements and petroleum-related transactions.

Financial Reporting Professionals

Useful for professionals responsible for preparing, reviewing or interpreting financial statements and related disclosures.

Finance Business Partners

Helps finance professionals communicate effectively with technical and operational teams and translate operational activity into financial information.

Senior Finance and Accounting Professionals

Suitable for managers and senior specialists who require a consolidated understanding of accounting across the hydrocarbon value chain.

Petroleum Operations Professionals Moving into Finance

Provides an accounting foundation for professionals from production, engineering, commercial or operational backgrounds who increasingly work with financial information.

Course outline

This Module establishes the commercial and accounting context of the petroleum industry. Participants examine how accounting activities relate to the lifecycle of hydrocarbons from exploration through production, transportation, processing and sale.

  1. IFRS 6 Exploration for and Evaluation of Mineral Resources

    IFRS 6 specifically addresses exploration and evaluation expenditure for mineral resources including oil and natural gas, while IAS 16 provides principles for recognition and measurement of relevant property, plant and equipment.

    Learning Outcomes

    By the end of Day 1, participants will be able to:

    • Explain the structure of the petroleum industry from upstream to downstream.

    • Describe the accounting implications of different stages of the hydrocarbon value chain.

    • Use core petroleum accounting terminology accurately.

    • Distinguish major categories of petroleum expenditure.

    • Explain the purpose of a chart of accounts in an oil and gas organisation.

    • Identify the relationship between operational activities and accounting records.

This Module focuses on exploration and evaluation activities and the transition from resource discovery to commercial development. Participants examine the accounting implications of expenditure incurred during exploration, appraisal and development.

  1. IFRS 6 Exploration for and Evaluation of Mineral Resources

    IFRS 6 permits an entity to develop an accounting policy for exploration and evaluation assets within the framework established by the standard. The standard also contains specific impairment requirements for exploration and evaluation assets.

    Learning Outcomes

    By the end of Day 2, participants will be able to:

    • Classify major exploration and evaluation costs.

    • Explain the accounting treatment of exploration expenditure.

    • Compare the successful efforts method and full cost method.

    • Explain the concept of cost pools under the full cost method.

    • Identify accounting considerations for successful and unsuccessful wells.

    • Distinguish exploration expenditure from development expenditure.

    • Recognise key circumstances requiring impairment consideration.

This Module examines accounting during the production phase, with emphasis on asset accounting, production-related expenditure, depreciation, inventory and cost control. Participants connect production data with financial reporting requirements.

  1. IAS 16 Property, Plant and Equipment

    IAS 16 establishes principles for recognising property, plant and equipment and measuring carrying amounts and depreciation, while IAS 36 addresses impairment of assets.

    Learning Outcomes

    By the end of Day 3, participants will be able to:

    • Explain the accounting relationship between production activity and financial reporting.

    • Identify key categories of production-related expenditure.

    • Apply relevant principles to petroleum property, plant and equipment.

    • Explain depreciation and amortisation considerations.

    • Recognise the importance of accurate asset registers.

    • Understand inventory accounting considerations for hydrocarbons and related materials.

    • Identify control points for production cost reporting and reconciliation.

This Module addresses the financial accounting implications of selling hydrocarbons and managing commercial transactions. Participants examine revenue recognition, contractual arrangements, financial instruments and the preparation of useful financial information.

  1. IFRS 15 Revenue from Contracts with Customers

    IFRS 15 establishes principles for reporting the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. IFRS 9 addresses classification and measurement of financial assets and liabilities and certain contracts involving non-financial items.

    Learning Outcomes

    By the end of Day 4, participants will be able to:

    • Explain key accounting considerations for hydrocarbon sales.

    • Identify the principal stages in revenue recognition.

    • Connect commercial contract terms with accounting information.

    • Understand accounting considerations for receivables and payables.

    • Explain the relevance of IFRS 9 to financial instruments and selected commodity-related transactions.

    • Improve the quality of revenue reconciliations and management reporting.

    • Identify accounting information required to support accurate financial reporting.

This Module integrates the principles covered throughout the course. Participants work through an end-to-end petroleum accounting scenario covering exploration, development, production, commercial transactions and financial reporting.

  1. IFRS 6 Exploration for and Evaluation of Mineral Resources

    The IASB completed its extractive activities project in 2023 and decided not to develop new or amended recognition, measurement or disclosure requirements for exploration and evaluation expenditure, retaining IFRS 6 as the relevant standard.

    Learning Outcomes

    By the end of Day 5, participants will be able to:

    • Integrate accounting principles across upstream, midstream and downstream activities.

    • Analyse an end-to-end petroleum accounting scenario.

    • Connect operational transactions with financial reporting outcomes.

    • Evaluate the accounting implications of exploration, development and production activities.

    • Apply petroleum accounting terminology confidently in professional situations.

    • Identify relevant accounting standards for common petroleum transactions.

    • Strengthen accounting controls, reconciliations and reporting processes.

    • Produce more meaningful financial information for management decision support.

Certificate

Attendees who successfully finish the course receive a Certificate of Completion from The Institute For Oil & Gas Training.

The certificate is issued upon completion of the programme and fulfilment of the course attendance requirement. Participants are expected to attend the full scheduled programme to receive the Certificate of Completion.

Course dates

  • Europe

    Middle East

    Asia

    Africa

    North America

    Online

    Fee: £3,500

  • Europe

    Middle East

    Asia

    Africa

    North America

    Online

    Fee: £3,500

  • Europe

    Middle East

    Asia

    Africa

    North America

    Online

    Fee: £3,500

  • Europe

    Middle East

    Asia

    Africa

    North America

    Online

    Fee: £3,500

Fees include tuition, course materials and refreshments. Need different dates or a different city? Ask about your preferred date.

Frequently asked questions

What is Petroleum Industry Accounting Fundamentals?

Petroleum Industry Accounting Fundamentals is a practical professional course covering the core accounting principles used across oil and gas operations. It covers exploration and production accounting, cost classification, chart of accounts, asset accounting, revenue, inventory, impairment and relevant oil and gas accounting standards.

Who is this course designed for?

The course is designed for accountants, financial controllers, management accountants, finance managers, cost controllers, joint venture accountants, auditors, commercial finance professionals and other personnel who work with financial information in the oil and gas sector.

Does the course cover the successful efforts method and full cost method?

Yes. The programme provides a practical comparison of the successful efforts method and full cost method, including their approaches to exploration and evaluation expenditure, cost accumulation, capitalisation and subsequent accounting treatment. These are recognised approaches in oil and gas accounting practice, with application depending on the applicable reporting framework and accounting policy.

How is the course delivered?

The Institute For Oil & Gas Training uses corporate-focused delivery that combines technical presentations, case studies, practical accounting exercises, group discussions, simulations and real-world petroleum scenarios. The approach connects accounting principles with upstream, midstream and downstream operations.

What certificate do attendees receive?

Attendees receive a Certificate of Completion from The Institute For Oil & Gas Training upon finishing the course and meeting the required attendance requirement.

Next: 18 Jan 2027

4 dates available

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