management

NO
www.kufpec.com
ORWAY
H. H. Shaikh
Sabah Al-Ahmad Al-Jaber Al-Sabah
Amir of The State of Kuwait
H. H. Shaikh
Nawaf Al-Ahmad Al-Jaber Al-Sabah
Crown Prince of The State of Kuwait
H. H. Shaikh
Jaber Mubarak Al Hamad Al-Sabah
The Prime Minister of The State of Kuwait
ABOUT US
KUFPEC Mission, Vision, and Values are shared with KPC upstream sector and aligned with KPC strategic
direction reflecting our aggressive ambition in the business.
KPC Upstream Mission
To explore, develop and produce hydrocarbons within the State of Kuwait, the divided zone and
Internationally and so to be a secure and reliable supplier to our customers, promote the care and
development of our people and deliver on our commitment to our stakeholders in a compliant, profitable,
safe and environmentally responsible manner.
KPC Upstream Vision
To achieve a leading global position in upstream oil and gas as an integrated, value-driven enterprise, by:
• Maximizing the strategic value from oil
• Realizing the potential of gas
• Growing reserves for a sustainable future
• Being an employer of choice
• Realizing value from technology
• Strengthening our commitment to HSSE
• Striving for excellence in performance
• Contributing to the Enterprise and State
Values
Excellence, Flexibility, Partnership, Motivation, Commitment to HSSE and Society, One Identity and
Integrity.
KUFPEC Strategic Targets:
• Achieve crude oil and gas Production/Reserves targets of:
- 80 mboepd net production target by 2010 supported by a net reserve base of 350 mmboe,
- 130 mboepd net production target by year 2015 supported by a net reserve base of 430 mmboe,
- 200 mboepd net production target by year 2020 supported by a net reserve base of 650 mmboe
and maintain it through 2030
• Preference for investments which facilitate technology and capability transfer between domestic
and international upstream businesses
• Achieve and maintain optimal ratio of oil & gas in international upstream portfolio
• Become operator of international upstream assets:
- 5% of daily production under operatorship by 2015
- 10% of daily production by 2020
- 15% of daily production by 2025
- 20% of daily production by 2030
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BOARD OF
1. Mr. Sanad H. Al-Sanad
Chairman
2. Mr. Yousef Al-Yateem
Deputy Chairman
3. Shaikh/ Nawaf S. N. Al-Sabah
Board Member
4. Mrs. Khawla H. Al-Jassem
Board Member
5. Mr. Ahmad M. Al-Rasheed
Board Member
6. Mr. Mohammed R. Jasem
Board Member
7. Mr. Menahi Saeed Al-Anezi
Board Member
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DIRECTORS
1 Shaikh/ Nawaf S. N. Al-Sabah
9 Mr. Maged Azab
2 Mr. A. Naser Al-Fulaij
10 Mr. Mezyed Al-Mutairi
3 Mrs. Hosnia S. Hashim
11 Mr. Syed Bokhari
4 Mr .Mohammad Saqer Al-Ghanim
12 Mr. Gavin Daniel
5 Mr. Waleed Al-Ben Ali
13 Mr. Dawood Al-AbdulJaleel
6 Mrs. Ghada Al-Amer
14 Ms. Muna S. Al-Mutawa
7 Mr. Tareq Ebrahim
15 Mr. Abdullatif Al-Houti
Chief Executive Officer
Acting Manager, Africa Region
Vice President - Business Development
Manager, Public Relations & Services
Vice President - Operations
Manager, Middle East Region
Vice President - Finance & Administration
Manager, Legal Affairs
Manager, Commercial
Manager, Finance
Manager, Corporate Planning
Manager, Human Resources
Manager, South East Asia Region
Manager, Management Support
8 Mr. Mohammad Al-Maraghi
MANAG
Acting Manager, Far East & Australia Region
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GEMENT
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Message from the
Chief Executive
Officer
On behalf of the KUFPEC family,
I thank Mr. Al-Adsani for his
vision, leadership and personal
commitment to KUFPEC. We
wish him continued success in
fulfilling his new duties at KPC.
2013 was another banner year for Kuwait Foreign Petroleum
Exploration Company (KUFPEC). In this our 32nd year, we took
strong steps to follow through on our 2030 strategy and continued
to return value to our shareholder. I am pleased to present KUFPEC’s
32nd annual report together with the consolidated financial
statements for the calendar year ended 31 December 2013.
On behalf of the KUFPEC team, I express our sincere appreciation
and gratitude to His Highness the Amir of the State of Kuwait
Shaikh Sabah Al-Ahmad Al-Jaber Al-Sabah, His Highness the Crown
Prince Shaikh Nawaf Al-Ahmad Al-Jaber Al-Sabah and His Highness
the Prime Minister Shaikh Jaber Al-Mubarak Al-Hamad Al-Sabah.
We wish them continued success in leading our beloved country
towards further prosperity and a better future.
A TRANSITION YEAR
This year was a period of transition for KUFPEC in many ways. First,
our shareholder Kuwait Petroleum Corporation (KPC) reconstituted
our Board of Directors and our executive management team, all as
part of the KPC-wide restructuring initiated in May. We are proud
that our former Chairman and Managing Director, Mr. Nizar M. AlAdsani, is now the Deputy Chairman and Chief Executive Officer of
KPC.
GROWTH THROUGH
ACQUISITION…
SAILING NORTHWARD
Second,
2013
heralded
remarkable changes to KUFPEC’s
growth strategy. This year can
best be described as a positioning
for KUFPEC to embark on an
unprecedented level of activity
in 2014 and beyond through a
combination of rationalization
of our existing production
portfolio and a set of aggressive
acquisitions that have the
capability of truly transforming
our company. In 2013, we
completed five new acquisitions
consisting of 10 assets, most
notably the corporate acquisition
of Norske AEDC AS which
expanded our global footprint
into the North Sea. We coupled
this acquisition with the opening
of our new regional office in
Stavanger, Norway as KUFPEC’s
sixth regional office.
Other 2013 acquisitions included
a 26.8% interest in the Galoc
Field in the Philippines, a
5% interest in the Southeast
Sumatra and Offshore Northwest
Java PSCs in Indonesia, an
additional 4.1% equity in the
Mutineer Exeter JV in Australia
and an additional 15.3% working
interest in the Yacheng Field
in China. KUFPEC also farmed
in to several new exploration
blocks in UK Continental Shelf
and purchased 30% working
interests in two licenses in the
Norwegian Continental Shelf.
Recognizing that exploration
provides the best potential for a
robust future, we began in 2013
the process of finalizing eight
new exploration projects: one in
Yemen, three in China and four
in Pakistan.
Acquisitions, however, have
not been the only focus of the
company in 2013. We rationalized
our portfolio by divesting five
non-core assets and improved
the efficiency of our nonoperated assets in collaboration
with the operators.
STRONG SUPPORT FROM
OUR SHAREHOLDER
Third, in a powerful expression
of its confidence in KUFPEC’s
expansion strategy and to
enhance our capabilities and
scale to compete internationally,
the Supreme Petroleum Council
of the State of Kuwait authorized
a six-fold increase of our share
capital in 2013, from KD 200
million to KD 1.2 billion. We have
already begun to deploy this
additional share capital to fund
our 2030 growth plans.
THE INTERNATIONAL
BANKING COMMUNITY
SIGNS ON TO OUR STRATEGY
Fourth, even while we were
in the process of formalizing
the increase in share capital,
we received the endorsement
of a syndicate comprised of
every major Kuwaiti bank and
a constellation of international
banks through the provision of a
US$1 billion corporate loan to fund
our ambitious growth strategy.
This independent validation of
KUFPEC’s growth potential and
confidence in its management
team provides further support to
our 2030 strategy.
awareness of critical health
and environmental
issues,
including awareness campaigns
for breast cancer, better health
in Ramadan, Healthy Heart
Risk Factors for the workplace,
stress management, waste
management and a blood drive.
We are proud to report that over
90% of our staff completed
HSE training this year.
STABLE PERFORMANCE
Fifth, operationally, KUFPEC
maintained its level of efficiency
during 2013. Our average
production for the year was
74,778 boepd compared to
74,875 boepd in 2012. We were
able to maintain our production
levels despite several factors,
including deferment of some
work programs due to political
turmoil (Yemen and South
Sudan), start-up delays and the
natural decline from mature
fields. KUFPEC’s hydrocarbon
reserves stood at 335 mmboe by
the end of December 2013 versus
344 mmboe in 2012.
To be a successful operator, we
must be a contributing member
of the societies in which we
operate.
Accordingly,
our
community programs included
the construction of a medical
clinic in Pakistan, sponsorship
of the Royal Flying Doctors
Service and an employee fundraising campaign to support the
victims of the Syrian crisis. We
also launched a smartphone
application in 2013 tied to our
successful 2012 Birds of Kuwait
book.
Financially, KUFPEC reported an
after tax net profit of US$ 170
million compared to the previous
year’s profit of US$ 201 million,
while year-end total operating
revenues grew to US$ 1.4
billion from the previous year’s
operating revenues of US$ 1.3
billion
HSE&C...UNREMITTING
COMMITMENT
Sixth, KUFPEC had another
very good year with respect
to Health, Safety, Environment
and Community performance.
During 2013, we initiated
several
noteworthy
events
and programs to promote
OUR PEOPLE… THE REAL
DRIVER
Undoubtedly, none of this year’s
achievements would have been
possible without the hard work,
dedication and commitment
of the KUFPEC team. When I
joined KUFPEC in May 2013,
my former colleagues at KPC
congratulated me on joining
a new family of dedicated
employees who work as one
team to achieve our targets
and pull one another up as we
encounter new challenges. I am
proud to be a member of this
family.
Nawaf Saud Al-Nasir Al-Sabah
Chief Executive Officer
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DEDICATE
The energy industry is often discussed in terms of capital investment, expenses and
growth returns, while actually, the real driver in any business is the people. Unquestionably, we have a lot of work to do ahead, but we are quite confident that
KUFPEC’s current base of employees, whose unremitting commitment to the values and
mission that make KUFPEC the company it is today, puts us in a very strong position to
make the most of our opportunities and maintain a momentous pace towards further
success in a highly competitive industry.
ED PEOPLE
Hence, KUFPEC continues to recruit skilled
and experienced personnel in all its regional
offices as well as its Kuwait headquarters,
while effectively optimizing current human
resources.
As of December 31, 2013, we had a total of
257 employees on-board, over 68 percent
of whom are Kuwaiti nationals at Head
Office. The level of Kuwaitization increased
from 66.86% in 2012 to 68.13% by end
2013.
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KUFPEC AREAS OF OPERATION
KUFPEC is currently active in
14 countries, with operations
grouped within four core areas
spanning 4 continents and
managed by six Regional Offices
in Egypt, Tunisia, Indonesia,
Australia, Norway and Pakistan.
KUFPEC continues deepening
the diversity of its workforce
and recruiting the most talented
people from the various
communities in which it operates
its business.
COUNTRIES OF ACTIVITY
Middle East Region
Pakistan - Yemen
Africa Region
Egypt - Tunisia - South Sudan
-Mauritania
UK - Norway (North Sea)
South East Asia Region
Indonesia-Malaysia- Vietnam
Far East& Australia Region:
Australia - China - Philippines
1.4
1.3
2013 2012
2012
2013 2012
2013
2012
2013 2012
344
335
344
2013
335
75,765
75,765
2012
74,778
74,778
2013
201
2013 2012
201
2012
170
2013
1.3
1.4
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FINANCIAL &
OPERATING HIGHLIGHTS
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DIRECTORS’ REPORT
ON ACTIVITIES
THE MIDDLE EAST REGION
The Middle East Region witnessed remarkable operational progress during 2013. KUFPEC, Pakistan
applied for two more exploration blocks as operator (Makhad EL & Paharpur EL). These blocks are
expected to be awarded by mid-2014.
In Yemen, KUFPEC is actively evaluating exploratory acreages in the country and is hoping to get
exploration blocks during 2014. The production from Jannah block was disrupted several times during
2013 due to the sabotage in the main SEPOC export pipeline. On the other hand, the field production
capacity of the East Shabwa block has declined due to natural depletion of the field.
In Pakistan, seismic acquisition in Jati Exploration License (75%, KUFPEC operated) was started in
late Nov 2013 and 50% was completed as of 31st Dec 2013. Plans are to drill the first exploratory well
by mid-December 2014. Badhra B North-2 (Badhra Area B) was successfully drilled and encountered
additional sand bodies in Mughal Kot formation. The well was tested ~30 MMscfpd from A&B sands of
Mughal Kot Formation. Lundali-1, an exploratory well in the Sukhpur area was successfully drilled and
initially tested 33 MMscfpd from Khadro Sands. The well put on production under 12 months Extended
Well Testing (EWT). We are planning to drill & test Mughal Kot sands in Bhit gas field by Q3, 2014.
Deepening of Badhra South-1 will be commenced by early Jan 2014 to test the deeper targets of Lower
Goru and Sember in the southern part of the Badhra structure.
Qadirpur Pirkoh compression project completion was delayed with the third compressor to be
commissioned in January 2014. Two more extended reached wells were drilled to drain the gas from
northern culmination which is underneath the Indus flood plain.
The Zamzama field is on natural decline. During 2013, one water disposable well was drilled to dispose of
extra produced water. In Kadanwari field, three abandoned wells were re-drilled and tested for the tight
sand potential. The first two wells did not produce commercially while the third well is under testing.
During 2013, the Kadanwari & the Bhit gas facilities worked at full capacity. Government approved
development of the Zarghun South field under the Tight Gas scenario. Field development activities are
continuing and 12.5 kilometers of pipeline laid for the Zarghun South field site.
In 2013, plans were made for deepening of
Badhra South-1 to test the deeper targets
of Lower Goru and Chiltan with estimated
recoverable resources of about 216 BCF. Two
new development wells were also planned to be
drilled in Badhra during 2014.
During 2013, a supplemental agreement was
executed to reduce the tax rate from 52.5% to
40% under the Finance Act of 2012.
PAKISTAN
Jati Exploration License
(KUFPEC: 75%)
The highly prospective Jati Block was granted to
KUFPEC in 2012 with operatorship and minimum
work program of 500 kilometers of new 2D seismic
acquisition and drilling two exploratory wells. During
2013, geological studies included petrophysical
analysis of existing wells and the reprocessing
of existing 2D and 3D seismic data. The new 2D
seismic acquisition during 2013 is on schedule to
support drilling the first exploratory well starting
in late 2014.
Bhit & Badhra Fields
(KUFPEC: 34 %)
During 2013, the average field gross production
was 52,490 boepd (KUFPEC net of 17,847 boepd)
which was higher than forecast due to drilling
two new delineation wells. Plans were made in
2013 to drill an exploratory well in 2014 to test
the Mughalkot Formation potential of about 400
BCF gross reserves. Currently all the gas wells are
producing with well head compression and the Bhit
gas processing plant is running at full capacity. Bhit
and Badhra field total production was 113 BCF, which
was above the planned ACQ of 85 BCF.
Qadirpur Field
(KUFPEC: 13.25%)
Gas production from the Qadirpur field during
2013 averaged 77,136 boepd (KUFPEC net 9,823
boepd). Gas production was maintained in 2013
by refurbishing two compressors and drilling
two extended reached wells underneath the
Indus flood plain.
A production lease extension was received in
2013 with a new expiration date in 2017 under
the Petroleum Concession Agreement (PCA).
A supplemental government agreement was
executed in 2013 reducing the tax rate from
55% to 40% under the Finance Act 2012.
Kadanwari Field
(KUFPEC: 15.789%)
Production from the Kadanwari gas field
averaged 17,767 boepd (KUFPEC net 2,805
boepd) as compared to 16,048 boepd during
2012. The production increase was the result
of drilling five development wells during 2013
in the south western part of the field. The
Kadanwari rejuvenation project also initiated
the evaluation of fracturing the tight reservoirs.
Three abandoned wells were selected for reentry and Multi-Fracs in a tight reservoir. The
first two wells did not show significant gas
production but the third well is being flow tested.
During 2013, the Kadanwari gas plant ran at full
capacity.
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DIRECTORS’ REPORT
ON ACTIVITIES
THE MIDDLE EAST REGION
Zamzama Field
(KUFPEC: 9.375%)
Gas production from the Zamzama field averaged 51,501 boepd during 2013 (KUFPEC net 4,828 boepd)
as compared to 57,617 boepd in 2012 due to natural field decline. One water disposal well was drilled to
inject increasing amounts of produced water. An Integrated Reservoir Study of the Khadro Formation
in 2013 has resulted in plans to drill an additional production well during 2014.
Zarghun South Field
(KUFPEC: 3.75%)
Government approved the Supplemental Development Plan with the field under a Tight Gas Scenario.
In 2013, the Operator laid 12.5 kilometers of pipeline and continued other development work at the
field site.
Sukhpur EL Field
(KUFPEC: 25%)
The exploratory Lundali-1 well was drilled in early 2013 and initially tested 33 MMscfpd from Khadro
Sands. The Lundali-1 was approved for a 12 month extended production well flow test starting in
October 2013 and was producing at 7.5 mmcfpd at the end of 2013. Plans are to acquire 3D seismic
in the north western part of the block in lieu of a second exploratory well during 2014 to extend this
Khadro discovery.
Jannah Block 5
(KUFPEC: 20%)
Oil production from Jannah for 2013 averaged
27,742 bopd (KUFPEC net 1,979 bopd). The Marib
export pipeline in Block 18 was breached on
different occasions during 2013, which caused a
disruption of Block 5 production. A total of 59
days of Force Majeure was declared for the year
of 2013.
Drilling activities were resumed during 2013
after a period of no activity in 2012 due to the
security situation in the country. A total of 4
wells were drilled during 2013.
YEMEN
East Shabwa Block 10
(KUFPEC: 14.2857%)
The East Shabwa average production during
2013 was 46,901 bopd (KUFPEC net
3,300
bopd). The average field production decreased by
23% compared to 2012. The production drop is
due to a sharp unpredicted decline after a water
breakthrough in some of the basement wells.
Al Barqa Block 7
(KUFPEC: 20.25%)
For security reasons, no major activities
were performed in the block during the year.
The Republic of Yemen has granted the 4th
extension of the first exploration period until 7th
June 2014. The 2014 WP&B contains a plan to
acquire new 2D seismic, and to firm up the 4th
commitment well possibly in end of 2014 or early
2015 depending upon the security situation.
The Phase 4 development program for the basement
was completed in 2013. Current production wouldn’t
have been reached without these Phase 4 wells. The
Joint Venture Partners voted to kick start the BABY
phase development project, aimed at accelerating
production and producing new reserves in the
Biyad Reservoir.
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DIRECTORS’ REPORT
ON ACTIVITIES
AFRICA REGION
During 2013, the Africa Region continued its efforts to implement the exploration and development
programs of the assigned projects.
The net average production achieved within the Africa Region during 2013 was 3,138 boepd as compared
to the net average production of 4,559 boepd achieved during 2012. The decrease is attributed to the
delay or deferment of drilling new exploration and development wells and depletion of the existing
fields. Enhancements of the production facilities at the Chinguetti, Sidi El Kitani and Ras Kanayes fields
helped slow the decline in production rates.
During 2013 the Mauritania Zone A Banda development studies continued and the Mauritania Zone B
Tevet Field evaluation was completed resulting in a request to amend the timing of the declaration of
commerciality. The Ras Kanayes Prince Field Unitization Agreement was approved by the Egyptian
authorities.
Early 2013 a decision was made to relinquish
the Congo Marine IX Block at the end of its
first exploration phase and during the year the
decision was also made to relinquish the Egypt
North Bardwail Assad Field area.
EGYPT
Western Desert, Onshore
Ras Kanayes
(KUFPEC: 17%)
The Prince Field Unitization Agreement was
approved by the authorities. The average net
production in 2013 was 1,020 boep.
Nile Delta, Offshore
North Bardawil
(KUFPEC: 40%)
Production from the Zaraf well in 2013 averaged
net 191 boepd.
Gulf of Suez, Offshore
Geisum & Tawila West
(KUFPEC: 40%)
Net production during 2013 averaged 1,171 bopd. Development and exploration drilling continued to
maintain the field production.
SOUTH SUDAN
Block B
(KUFPEC: 27.5%)
KUFPEC has been a co-venture partner for more than two decades. JV Partners continued negotiations
during 2013 with the South Sudan government to resume operations.
TUNISIA
United Kingdom
Sidi El Kilani
(KUFPEC: 22.5%)
Net production for 2013 from the Sidi El-Kilani Field
averaged 219 bopd. KUFPEC efforts were continued
in 2013 toward optimizing the field development
strategy for infill development drilling in 2014.
Alma & Galia
(KUFPEC: 35%)
KUFPEC and EnQuest started the development
drilling program along with the facilities
construction continuing for the Alma and Galia
oil fields. First production is forecasted in the
third quarter of 2014.
MAURITANIA
C-10 Exploration Block
(KUFPEC: 12.36%)
The efforts continued to drill the first exploration
well, Tapander-1 Well of the first exploration period
(Phase I), the spud date is forecasted early January
2014.
Zone A (KUFPEC: 13.084%), Zone B (KUFPEC:
11.630%), and the Chinguetti EEA (KUFPEC:
10.234%)
Zone A: Banda Gas Discovery application for
grant of an Exclusive Exploitation Authorization
was submitted and accepted by authorities. A
development plan is under study.
CONGO
Marine Block IX
(KUFPEC: 46.15%)
In early 2013, a decision was made to relinquish
the Congo Marine IX Block at the end of its
first exploration phase after the drilling of
Frida-1 well in 2009.
Norway
In 2013, KUFPEC was actively engaged in running
the activities pertinent to its recently acquired
interests in Norway; Gyda(KUFPEC: 5%),Tambar
East (KUFPEC: 0.8%), Yme (KUFPEC: 10%),
Bream (KUFPEC: 30%) through our newly
established area office in Stavanger, Norway.
Zone B: Tevet Field Joint Venture Partners’
request to amend the agreement to declare the
commerciality of the Field was submitted to the
authorities in late 2013.
Chinguetti EEA: net oil production in 2013 from
the Chinguetti Oil Field averaged 537 bopd. The
Joint Venture continued its efforts during 2013
to optimize the field production and prolong the
field life.
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DIRECTORS’ REPORT
ON ACTIVITIES
SOUTH EAST ASIA REGION
The South East Asia Region (SEAR) continues to be a growth area for KUFPEC and 2013 witnessed
further increased activity with the drilling of forty development wells (thirty three oil, one gas, three
water injection and three appraisal wells). KUFPEC’s net share of production from the region during
2013 was 15,101 boepd.
An active exploration program was undertaken with the drilling of five wells of which four were
in Indonesia and one in Malaysia. A successful exploration program delivered three discoveries of
which two were in Indonesia: ONWJ PSC MTX-1 (oil), EG-1 (oil) and one in Malaysia SB312 PSC well
Danum-1 (gas).
SEAR 2013 highlights included the purchase of Risco Energy assets in Indonesia including: 5% in ONWJ,
5% in SES and 40% in Ephindo Energy company which has varying interests in 7 Indonesian Coal Bed
Methane assets. 2013 development activities included: Anoa Phase 4 compression project which raised
gas sales capacity from 165 mmbtu/d to 210 mmbtu/d; associated gas compressor upgrades to capture
low pressure solution gas previously being flared; and the development of two gas fields, Naga and
Pelikan for which two Wellhead Platforms were constructed and installed offshore in preparation for
2014 drilling. Malaysia PM-304, 2013 development activities for Cendor Phase 2 and West Desaru fields
included a very active 3 rig drilling program, installation of a leased early production platform MOPU
for West Desaru and construction of a 50,000 bopd Floating Offshore Processing Unit (FPSO) to be
installed during 2014.
INDONESIA
BUTON PSC
(KUFPEC: 30%)
The Buton PSC covers an area of 3,047 km2 that extends both onshore and offshore Buton Island,
southeast of Sulawesi. The block was awarded in 2007. Gravity, magnetic and seismic surveys were
study recommending divestiture, KUFPEC’s
full 25% interest in Pangkah was sold to Saka
Energi Indonesia with an effective date of 1
January 2012.
acquired in 2008/2009. During 2012 all remaining
commitments were fulfilled with the drilling of
one exploration well (Benteng-1) which had subcommercial oil shows. The block is currently under
relinquishment due to low remaining prospectively.
NATUNA SEA BLOCK ‘A’ PSC
(KUFPEC: 33.33%)
The NSBA PSC is located in the Indonesian Natuna
Sea and has been supplying gas to Singapore from
the Anoa field since 2001 and Gajah Baru field since
2011. During 2013 three developments projects
were undertaken: Anoa Phase 4 compression,
Naga gas field and Pelikan gas field developments.
Anoa Phase 4 compression was completed raising
gas sales capacity from 165 mmbtu/d to 210
mmbtu/d. Naga and Pelikan Wellhead Platforms
were constructed and installed and are ready for
development drilling that will commence in 2014.
An extensive drilling campaign is expected to start
in Q1-2014 with the drilling of 9 development and 2
exploration wells. The exploration wells are followup to WL-5x exploration well which discovered
commercial gas in a new play fairway during 2012.
KUFPEC’s net share of production from the PSC
during 2013 was 9,175 boepd.
PANGKAH PSC
(KUFPEC: 25%)
The Pangkah PSC is located offshore eastern
Java and contains the Ujung Pangkah oil, gas and
condensate field. Following a portfolio analysis
SERAM PSC
(KUFPEC: 30%)
The Seram PSC is located at the eastern end
of Seram Island near West Papua where oil
has been produced since 2002 from the Oseil
Field and Nief Utara-A Field. Following post well
evaluations of the 2012 Lofin-1 oil discovery, a
decision was made in 2013 to drill Lofin-2 as an
exploration/appraisal well in 2014. Development
drilling activities continued during 2013 with
successful drilling of Oseil-1 Sidetrack, Oseil-15
Sidetrack and ongoing drilling of Os-26 at year
end. KUFPEC’s net share of production from the
PSC during 2013 was 694 boepd.
Offshore Northwest Java (ONWJ) PSC
(KUFPEC: 5%)
The ONWJ PSC is located offshore northwest
Java and was acquired from Risco Energy
during 2013. ONWJ complex holds some 51 oil
and gas fields. Oil production commenced in 1971
and gas sales in 1976. During 2013 a 575 km2
3D seismic survey was acquired, 4 exploration
wells and 23 development wells were drilled.
The development of 4 new fields commenced
with construction and installation of facilities.
KUFPEC’s net share of production from the PSC
during 2013 was 2,198 boepd.
Southeast Sumatra (SES) PSC
(KUFPEC: 5%)
The SES PSC is located offshore Sumatra and
was acquired from Risco Energy during 2013.
SES complex contains some 34 oil and gas fields.
Oil production commenced in 1971 and gas sales
in 2006. During 2013, two exploration wells and
4 development wells were drilled. There are 3
new offshore facilities still under construction:
Banuwati “K” gas compressor platform, Asti
“A” wellhead platform and Mila “A” wellhead
platform. KUFPEC’s net share of production
from the PSC during 2013 was 1,349 boepd.
21
DIRECTORS’ REPORT
ON ACTIVITIES
SOUTH EAST ASIA REGION
EPHINDO (Coal Bed Methane) PSC’s
(KUFPEC: 40% of Ephindo Company)
During 2013 KUFPEC acquired 40% of Ephindo Company from Risco Energy, which holds varying
interests in 7 Coal Bed Methane (CBM) PSC’s located in East Kalimantan and South Sumatra, Indonesia.
These CBM assets are primarily in the exploration and appraisal stage. During 2013 activities included:
ongoing negotiation for surface land access, core hole drilling and mapping to better define quality and
extent of coal seams and a single well dewatering pilot commenced to ascertain gas deliverability.
MALAYSIA
SB-312 PSC
(KUFPEC: 40%)
The SB-312 PSC is located offshore Sabah, Malaysia, adjacent to SB302. Following the successful
Menggatal-1 gas discovery drilled in 2011, a five year Gas Holding Agreement was obtained, commencing
from 30 April 2012, with a three-year exploration extension from 30 April 2012. During 2013, 303 km2
of new 3D seismic data was acquired and Danum-1 exploration well was drilled and discovered minor
gas and oil in a secondary objective but was unable to reach the deeper primary objective due to
unexpected higher pressures. Danum prospect is planned to be re-drilled in 2014.
SB-302 PSC 7T-11 Development
Area
(KUFPEC: 40%)
The SB-302 PSC is located
offshore Sabah, Malaysia. In July
2011 the Gas Holding Agreement
(GHA) period was extended
to Sept 2014 and expanded to
include both the Belud East
and Belud South fields. A Field
Development Plan was submitted
in December 2011 and approval
was pending negotiation of a Gas
Sales Agreement. The proposed
development faced further
obstacles during 2013 with the
announcement by Operator
(Hess) to divest of its working interest and the realization that the domestic gas market was lower
than originally forecasted. At year-end, small scale gas development scenarios are being evaluated.
PM-304 PSC
(KUFPEC: 25%)
The PM-304 PSC is located offshore, east of the
Malaysian Peninsular and includes the Cendor oil
field which first came online in 2006. During 2013,
an 850 km2 3D seismic survey was acquired and
an extensive drilling campaign using three offshore
rigs was active in 2013. 3 appraisal wells were drilled
in Cendor Graben, East Cendor and East Desaru
fault blocks. 15 development wells were drilled
during 2013 concurrently with FPSO fabrication for
Cendor Field Phase-2 which will start producing in
July 2014. 6 development wells in the West Desaru
fault block were also drilled in 2013 allowing West
Desaru field to go on-line in August 2013. KUFPEC’s
net share of production from the PSC during 2013
was 1,629 boepd.
Block 51 PSC
(KUFPEC: 35%)
The PSC located in the Malay Basin, offshore
South Vietnam covers an area of 3,566 km2.
Exploration well 51-TC-1X discovered gas with high
CO2 concentration in Q4 2012. During 2013 post
well evaluation studies were conducted and reprocessing of existing 3D seismic data followed
by inversion and seismic attributes evaluation.
As a result of the 2013 re-interpretation, it was
decided to drill appraisal well 51-TC-2X in 2014.
VIETNAM
Block 19 & 20 PSCs
(KUFPEC: 40% in each)
The two PSCs are located in the Nam Con Son Basin,
offshore Vietnam in the South China Sea and cover
an area of 9,200 km2. Two exploration wells 19-TN1X and 20-MG-1X were drilled in Q3 2012. Both wells
were P&A without hydrocarbon shows. Both PSC’s
were re-evaluated and relinquished during 2013 due
to low remaining prospectively.
23
DIRECTORS’ REPORT
ON ACTIVITIES
FAR EAST & AUSTRALIA REGION
The Far East and Australia Region (FEAR) has continued to progress future oil and gas development
projects and new interest purchases while managing the declining production in existing fields
within the Region. Overall net production within FEAR has increased from 8,312 boe/day reported
in 2012 to 14,237 boe/day during 2013. The increase is due to closing of the purchase of 15.3% from
BP in Yacheng Field, start of production from Fletcher/Finucane Fields in May 2013 and start of
production in December 2013 of two new horizontal development wells within Galoc Field. The drilling
of development wells on the Balnaves Field oil development project was completed in December 2013
and oil production is on schedule to start in 2014 into an FPSO.
The FEAR highlights of 2013 included the closing on 11 December 2013 of the purchase of a 15.3%
interest in Yacheng Gas Field from BP which increased KUFPEC’s interest to 30% and added 2,867
boed net to KUFPEC in 2013. In Mutineer/Exeter Field, KUFPEC acquired 4.1% interest from Woodside
to increase the total interest to 37.5%. The new oil production at Fletcher/Finucane Fields added 9,098
bopd net to KUFPEC in the 8 months during 2013 from the three wells which have been flowing to
the Mutineer/Exeter FPSO. Further work in 2014 will be workovers at Mutineer/Exeter and drilling
of a delineation well near Fletcher called Vanuatu-1 starting in January 2014. The Balnaves Oil Field
development wells were drilled and suspended in 2013 for connection in mid-2014 to a new FPSO and
expected to start production of up to 7,000 bopd net to KUFPEC.
AUSTRALIA
WA-49-L formerly part of WA-356-P
(KUFPEC: 35%)
The Production License WA-49-L contains the Balnaves Oil Development Project and the Julimar/
Brunello Gas Development Project. The Balnaves Oil Field wells include two horizontal oil production
wells, a gas injection well and a water injection well which will be hooked up to a new FPSO and
scheduled to start production in mid-2014. Julimar/Brunello gas (35% KUFPEC) will be flowed to the
Chevron Wheatstone LNG Platform of which KUFPEC holds a 7% foundation membership. Brunello
Field will be initially put on production starting at the end of 2016. A new broad-band 3D seismic survey
was acquired in 2013 over Julimar/Brunello and Balnaves to improve resolution of the channel sand
reservoirs.
Wheatstone LNG
(KUFPEC: 7%)
The Wheatstone LNG Project offshore central processing platform, onshore site construction and 225
kilometer gas pipeline is progressing according to plan. Gas production is scheduled to start at the
end of 2016 into two LNG trains being built near Onslow in Western Australia and will have a combined
LNG capacity of 8.9 mmtpa.
WA-54-L, formerly part of WA-191-P
(KUFPEC: 50% Fletcher; 37.5% Finucane)
The WA-54-L production license was granted by
the Government in early 2013 and oil production
from Fletcher/Finucane Fields started in May 2013
through an 18 kilometer subsea flowline to the
Mutineer/Exeter FPSO. Oil production during the
8 months of 2013 averaged 9,098 bopd net to
KUFPEC from the combined flow. An exploratory
Vanuatu-1 well on a structure adjacent to Fletcher
will start drilling in January 2014.
WA-191-P
(KUFPEC: 37.5%)
The remaining exploration license WA-191-P is in
compliance of the work program after the granting
of WA-54-L production license for Fletcher/Finucane
Fields in early 2013. The Joint Venture purchased
part of the large Monodon 3D seismic reprocessing
and merging conducted by DUG, and interpretation
was advanced during 2013 for maturing exploration
prospects.
Harriet Joint Venture
(KUFPEC: 19.28%)
Net sales increased to 2,747 boepd from 2,487
boepd in 2012 due to increased demand by
industrial consumers. New well drilling has
been deferred into 2014 due to rig availability
and possible 3D seismic acquisition in 2014.
Mutineer-Exeter Field
(KUFPEC: 37.5%)
Net production fell to 136 bopd in 2013 from
1,651 bopd in 2012 due to failure of electronic
submersible pumps and rig availability delaying
workovers into 2014. A new well planned for
Exeter Field during 2013 has also been deferred.
The only production had been primarily from
intermittent free flow of oil for part of the
year. Production was also shut in for scheduled
maintenance of the FPSO vessel in Singapore
and for connection of the Fletcher/Finucane
production wells. Three Muntineer/Exeter wells
are scheduled for workover in 2014 to replace
the ESP’s. KUFPEC acquired an additional 4.1%
interest in Mutineer/Exeter from Santos in
2013 after the departure of Woodside from the
partnership.
WA-427-P
(KUFPEC: 100%)
Seismic reprocessing and inversion has been
initiated during 2013, and the Government has
approved changes to the work program to allow
for interpretation and delayed decision on a
drilling location.
25
DIRECTORS’ REPORT
ON ACTIVITIES
FAR EAST & AUSTRALIA REGION
WA-481-P
(KUFPEC: 30%)
2,573 square kilometers of 3D seismic and 581 kilometers of 2D seismic were acquired in March through
May 2013. Processing is underway and expected to be completed in early 2014. A three well drilling
campaign is expected to start in late 2014.
WA-335-P
(KUFPEC: 18.9%)
Interpretation of 3D seismic during 2013 resulted in approval to drill Bunyip-1 well in early 2014 to
delineate the Tallaganda-1 discovery from the adjacent WA-351-P.
WA-41-R
(KUFPEC: 33.3%)
Reevalution of the Corowa oil discovery coupled with a lower cost Floating Production Facility by a new
opertor has improved the economics for a possible development plan.
WA-46-R
(KUFPEC: 20%)
New operator formulating possible development plans for this retention lease.
WA-45-R
(KUFPEC: 20%)
Retention license under review for possible development plans.
WA-8-L
(KUFPEC: 42.63%)
Production license under review for development
plans of the Amulet oil discovery.
WA-356-P
(KUFPEC: 35%)
Interpretation is continuing to define exploration
potential.
CHINA
PHILIPPINES
SC14C Galoc Field
(KUFPEC: 26.84%)
Galoc Field produced net 1,215 bopd for KUFPEC
during 2013, compared to about 950 bopd
reported during 2012. During 2013, Phase II
drilling of two new horizontal infill wells was
completed and started production during
December 2013. Average net production during
the month of December 2013 increased to
2,802 bopd.
13-1 Yacheng Field
(KUFPEC: 30%)
KUFPEC completed the purchase of an additional
15.3% interest in Yacheng Field from BP during
2013. Yacheng Field produced net 5,784 boepd
for KUFPEC with the higher interest level during
2013. Normal field decline and several shut-in
wells producing high water has affected overall
production until additional workovers can be
scheduled in 2014. Three workovers were
completed in 2013. Two possible exploration wells
on the producing license are being evaluated for
drilling in 2014.
27
Kuwait Foreign Petroleum Exploration
Company K.S.C. (Closed)
Consolidated Financial Statements
31 December 2013
Independent Auditor’s Report
29
Consolidated Statement of Financial Position
30
Consolidated Income Statement
31
Consolidated Statement of Comprehensive Income
32
Consolidated Statement of Changes In Equity
33
Consolidated Statement of Cash Flows
34
Notes To The Consolidated Financial Statements
35-71
INDEPENDENT AUDITOR’S REPORT TO THE SHAREHOLDERS OF
KUWAIT FOREIGN PETROLEUM EXPLORATION COMPANY K.S.C. (CLOSED)
Report on the Consolidated Financial Statements
We have audited the accompanying consolidated
financial statements of Kuwait Foreign Petroleum
Exploration Company K.S.C. (Closed) (the “Parent
Company”) and its subsidiaries (collectively the “Group”),
which comprise the consolidated statement of financial
position as at 31 December 2013, consolidated income
statement, consolidated statement of comprehensive
income, consolidated statement of changes in equity
and consolidated statement of cash flow the year then
ended, and a summary of significant accounting policies
and other explanatory information.
Management’s Responsibility for the Consolidated
Financial Statements
Management of the Parent Company is responsible
for the preparation and fair presentation of these
consolidated financial statements inaccordance with
International Financial Reporting Standards, and forsuch
internal control as management determines is necessary
to enable the preparation of consolidated financial
statements that are free from material misstatements,
whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these
consolidated financial statements based on our audit.
We conducted our audit in accordance with International
Standards on Auditing. Those standards require that we
comply with ethical requirements and plan and perform
the audit to obtain reasonable assurance about whether
the consolidated financial statements are free from
material misstatement.
Opinion
In our opinion, the accompanying consolidated financial
statements present fairly, in all material respects, the
financial position of the Group as at 31 December 2013,
and its financial performance and cash flows for the year
then ended in accordance with International Financial
Reporting Standards.
Other matters
Our audit was made for the purpose of forming an opinion
on the accompanying consolidated financial statements.
The supplementary information set out on page 49 is
presented for the purpose of additional analysis and is
not part of the consolidated financial statements. This
supplementary information is the responsibility of the
Group’s management. We did not audit the supplementary
information and express no opinion on it.
Report on Other Legal and Regulatory Requirements
Furthermore,in our opinion,properbooks ofaccountshave
beenkeptby the Parent Company and the consolidated
financial statements, together with the contents of
the report of the Parent Company’s board of directors
relating to these consolidatedfinancial statements, arein
accordancetherewith. Wefurtherreportthatwe obtainedall
theinformationand explanationsthatwe required for the
purpose of our audit and that the consolidated financial
statementsincorporate all information thatis requiredby
theCompaniesLaw No 25 of 2012, as amended, andby
the Parent Company’sMemorandum of incorporation and
Articlesof Association, as amended, that an inventory
countwas duly carriedout and that, to the bestof our
knowledge and belief, no violation of the CompaniesLaw
No 25 of 2012, as amended, nor of the Parent
Company’sMemorandum of incorporation and Articles of
Association, as amended, have occurred during the year
ended 31 December 2013 that might have had a material
effect on the business of the Parent Company or on its
consolidated financial position.
An audit involves performing procedures to obtain
audit evidence about the amounts and disclosures
in the consolidated financial statements. The
proceduresselected dependon the auditor’s judgment,
including the assessment of the risks of material
misstatement of the consolidated financial statements,
whether due to fraud or error. In making those risk
assessments, the auditor considers internal control
relevant to the Group’spreparation and fair presentation
of the consolidated financial statements in order to
design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the Group’s
internal control. An audit also includes evaluating
the appropriateness of accounting policies used and
the reasonableness of accounting estimates made by
Group’smanagement, as well as evaluating the overall
WALEED A. AL OSAIMI
presentation of the consolidated financial statements.
LICENCE NO. 68 A
We believe that the audit evidence we have obtained EY
is sufficient and appropriate to provide a basis for our AL AIBAN, AL OSAIMI & PARTNERS
30 April 2014
audit opinion.
Kuwait
29
Kuwait
KuwaitForeign
ForeignPetroleum
PetroleumExploration
ExplorationCompany
CompanyK.S.C.
K.S.C.(Closed)
(Closed)and
andSubsidiaries
Subsidiaries
CONSOLIDATED
CONSOLIDATED
STATEMENT
STATEMENT
OF
OF
FINANCIAL
FINANCIAL
POSITION
POSITION
Kuwait
Foreign
Petroleum
Exploration
Company K.S.C. (Closed) and Subsidiaries
CONSOLIDATED
STATEMENT
OF FINANCIAL
POSITION
At
At31
31December
December2013
2013
At
31
December
2013
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 31 December 2013
ASSETS
ASSETS
Current
Currentassets
assets
ASSETS
Cash
Cashand
andcash
cashequivalents
equivalents
Current assets
Funds
Fundsheld
heldbybyUltimate
UltimateParent
ParentCompany
Company
Cash and cash equivalents
Trade
Tradeand
andother
otherreceivables
receivables
Funds held by Ultimate Parent Company
Inventories
Inventories
Trade and other receivables
Inventories
Non-current
Non-currentassets
assets
Property,
Property,plant
plantand
andequipment
equipment
Non-current assets
Intangible
Intangibleassets
assets
Property, plant and equipment
Investment
Investmentininassociate
associate
Intangible assets
Deferred
Deferredtax
taxassets
assets
Investment in associate
Goodwill
Goodwill
Deferred tax assets
Goodwill
Notes
Notes
Notes
55
66
5
77
6
88
7
8
99
1010
9
10
2020
1111
20
11
TOTAL
TOTALASSETS
ASSETS
TOTAL
ASSETS
LIABILITIES
LIABILITIES
AND
ANDEQUITY
EQUITY
Current
Currentliabilities
liabilities
LIABILITIES AND EQUITY
Trade
Tradeand
andother
otherpayables
payables
Current liabilities
Tax
Taxliabilities
liabilities
Trade and other payables
Due
DuetotoUltimate
UltimateParent
ParentCompany
Companyand
andaffiliates
affiliates
Tax liabilities
Dividends
Dividendspayable
payable
Due to Ultimate Parent Company and affiliates
Current
Currentportion
portionofoflong-term
long-termborrowing
borrowing
Dividends payable
Current portion of long-term borrowing
Non-current
Non-currentliabilities
liabilities
Decommissioning
Decommissioningprovision
provision
Non-current liabilities
Employees'
Employees'end
endofofservice
servicebenefits
benefits
Decommissioning provision
Deferred
Deferredtax
taxliabilities
liabilities
Employees'
end of service
benefits
Deferred
Deferredconsideration
consideration
payable
payable
for
forananacquisition
acquisition
Deferred tax liabilities
Long-term
Long-termborrowing
borrowing
Deferred consideration payable for an acquisition
Long-term borrowing
1212
12
66
2626
6
2121
26
21
1313
1414
13
2020
14
33
20
2121
3
21
Total
TotalLiabilities
Liabilities
Total
Liabilities
Equity
Equity
Share
Sharecapital
capital
Equity
Statutory
Statutoryreserve
reserve
Share capital
Voluntary
Voluntaryreserve
reserve
Statutory reserve
Foreign
Foreigncurrency
currencytranslation
translationreserve
reserve
Voluntary reserve
Retained
Retainedearnings
earnings
Foreign currency translation reserve
Retained
earnings
Total
Totalequity
equity
Total
equity
TOTAL
TOTAL
LIABILITIES
LIABILITIESAND
ANDEQUITY
EQUITY
TOTAL LIABILITIES AND EQUITY
1515
1515
15
1515
15
15
2013
2013
KD
KD000’s
000’s
2013
KD 000’s
40,719
40,719
160,769
160,769
40,719
184,579
184,579
160,769
46,196
46,196
184,579
───────
───────
46,196
432,263
432,263
───────
───────
───────
432,263
───────
958,596
958,596
95,902
95,902
958,596
7,777
7,777
95,902
147,785
147,785
7,777
27,107
27,107
147,785
───────
───────
27,107
1,237,167
1,237,167
───────
───────
───────
1,237,167
1,669,430
1,669,430
───────
═══════
═══════
1,669,430
═══════
118,823
118,823
103,816
103,816
118,823
17,856
17,856
103,816
239,955
239,955
17,856
-239,955
───────
───────
480,450
480,450
───────
───────
───────
480,450
───────
136,261
136,261
6,821
6,821
136,261
164,570
164,570
6,821
21,972
21,972
164,570
211,538
211,538
21,972
───────
───────
211,538
541,162
541,162
───────
───────
───────
541,162
1,021,612
1,021,612
───────
───────
───────
1,021,612
───────
538,893
538,893
60,858
60,858
538,893
60,858
60,858
60,858
(51,405)
(51,405)
60,858
38,614
38,614
(51,405)
───────
───────
38,614
647,818
647,818
───────
───────
───────
647,818
1,669,430
1,669,430
───────
═══════
═══════
1,669,430
═══════
2012
2012
KD
KD000’s
000’s
2012
KD 000’s
62,695
62,695
16,875
16,875
62,695
143,305
143,305
16,875
33,122
33,122
143,305
───────
───────
33,122
255,997
255,997
───────
───────
───────
255,997
───────
740,324
740,324
52,244
52,244
740,324
-52,244
7,278
7,278
883
883
7,278
───────
───────
883
800,729
800,729
───────
───────
───────
800,729
1,056,726
1,056,726
───────
═══════
═══════
1,056,726
═══════
88,906
88,906
84,242
84,242
88,906
186,824
186,824
84,242
193,981
193,981
186,824
12,857
12,857
193,981
───────
───────
12,857
566,810
566,810
───────
───────
───────
566,810
───────
86,025
86,025
5,208
5,208
86,025
36,566
36,566
5,208
-36,566
-───────
───────
127,799
127,799
───────
───────
───────
127,799
694,609
694,609
───────
───────
───────
694,609
───────
200,000
200,000
56,034
56,034
200,000
56,034
56,034
56,034
5,718
5,718
56,034
44,331
44,331
5,718
───────
───────
44,331
362,117
362,117
───────
───────
───────
362,117
1,056,726
1,056,726
───────
═══════
═══════
1,056,726
═══════
Sanad
SanadH.H.Al-Sanad
Al-Sanad
Mohammad
MohammadSaqer
SaqerAl-Ghanim
Al-Ghanim
Chairman
Chairman
Vice
VicePresident
President- -Finance
Finance&&Administration
Administration
Sanad H. Al-Sanad
Mohammad Saqer Al-Ghanim
The attached notes 1 to 31 form part of these consolidated
financial- Finance
statements.
Chairman
Vice President
& Administration
The
Theattached
attachednotes
notes1 1toto3131form
formpart
partofofthese
theseconsolidated
consolidatedfinancial
financialstatements.
statements.
33
The attached notes 1 to 31 form part of these consolidated financial statements.
3
30
Kuwait Foreign Petroleum Exploration Company K.S.C. (Closed) And Subsidiaries
Kuwait
Kuwait
Foreign
Foreign
Petroleum
Petroleum
Exploration
ExplorationCompany
CompanyK.S.C.
K.S.C.(Closed)
(Closed)and
andSubsidiaries
Subsidiaries
CONSOLIDATED
INCOME
STATEMENT
CONSOLIDATED
CONSOLIDATED
INCOME
INCOMESTATEMENT
STATEMENT
For the year ended 31
December
2013
For
Forthethe
year
yearended
ended
3131
December
December2013
2013
Notes
Notes
Continuing
Continuing
operations:
operations:
Revenue
Revenue
Cost
Cost
ofof
operations
operations
1616
1717
GROSS
GROSS
PROFIT
PROFIT
Exploration
Exploration
expenditure
expenditure
written
written
offoff
Net
Net
impairment
impairment
(losses)
(losses)
/ reversals
/ reversals
General
General
and
and
administrative
administrative
expenses
expenses
Provision
Provision
forfor
slow
slow
moving
moving
inventory
inventory
items
items
1818
2222
88
PROFIT
PROFIT
FROM
FROM
CONTINUING
CONTINUING
OPERATIONS
OPERATIONS
BEFORE
BEFORE
FINANCE
FINANCE
INCOME,
INCOME,
FINANCE
FINANCE
COSTS,
COSTS,
TAXATION
TAXATION
AND
AND
DIRECTORS’
DIRECTORS’
FEES
FEES
Interest
Interest
income
income
Unwinding
Unwinding
of of
discount
discount
onon
decommissioning
decommissioning
provision
provision
Other
Other
expenses
expenses
Foreign
Foreign
exchange
exchange
loss
loss
Finance
Finance
costs
costs
1313
405,871
405,871
(222,427)
(222,427)
───────
───────
183,444
183,444
334,869
334,869
(145,431)
(145,431)
───────
───────
189,438
189,438
(27,460)
(27,460)
(29,829)
(29,829)
(15,801)
(15,801)
(387)
(387)
───────
───────
(73,477)
(73,477)
───────
───────
(26,008)
(26,008)
1,097
1,097
(6,583)
(6,583)
(123)
(123)
───────
───────
(31,617)
(31,617)
───────
───────
1,070
1,070
(4,494)
(4,494)
(81)
(81)
(204)
(204)
(1,432)
(1,432)
───────
───────
104,826
104,826
743
743
(2,745)
(2,745)
(124)
(124)
(1,099)
(1,099)
(215)
(215)
───────
───────
154,381
154,381
(20,976)
(20,976)
───────
───────
83,850
83,850
(32,151)
(32,151)
───────
───────
122,230
122,230
1919
(35,534)
(35,534)
───────
───────
48,316
48,316
(54)
(54)
───────
───────
48,262
48,262
═══════
═══════
(66,556)
(66,556)
───────
───────
55,674
55,674
(47)
(47)
───────
───────
55,627
55,627
═══════
═══════
PROFIT
PROFITBEFORE
BEFORE
DIRECTORS'
DIRECTORS'
FEES
FEES
Directors'
Directors'
fees
fees
PROFIT
PROFIT
FOR
FOR
THE
THE
YEAR
YEAR
The attached notes 1 to 31 form part of these consolidated financial statements.
The
attached
attached
notes
notes
1 to
1 to
3131
form
form
part
part
of of
these
these
consolidated
consolidated
financial
financial
statements.
statements.
31 The
44
157,821
157,821
44
PROFIT
PROFIT
BEFORE
BEFORE
TAXATION
TAXATION
AND
AND
DIRECTORS'
DIRECTORS'
FEES
FEES
Income
Income
taxtax
expense
expense
2012
2012
KD
KD
000’s
000’s
109,967
109,967
PROFIT
PROFITFROM
FROMCONTINUING
CONTINUING
OPERATIONS
OPERATIONS
BEFORE
BEFORE
TAXATION
TAXATION
AND
AND
DIRECTORS'
DIRECTORS'
FEES
FEES
Discontinued
Discontinued
operations
operations
Loss
Loss
from
from
discontinued
discontinued
operations
operations
2013
2013
KD
KD
000’s
000’s
Kuwait Foreign Petroleum Exploration Company K.S.C. (Closed) and Subsidiaries
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
CONSOLIDATED
STATEMENT
OF COMPREHENSIVE INCOME
For
the year ended 31
December 2013
For the year ended 31 December 2013
Profit for the year
OTHER COMPREHENSIVE INCOME
Other comprehensive income to be classified to profit or loss in subsequent
periods:
Foreign currency translation adjustment
Other comprehensive (loss) income
TOTAL COMPREHENSIVE (LOSS) INCOME FOR THE YEAR
2013
KD 000’s
2012
KD 000’s
48,262
55,627
(57,123)
──────
(57,123)
──────
(8,861)
══════
to 31 form
part of these
consolidated
The attached notesThe
1 toattached
31 form notes
part of1 these
consolidated
financial
statements.financial statements.
5
7,233
──────
7,233
──────
62,860
══════
32
33
50,362
───────
5,672
───────
56,034
═══════
56,034
───────
4,824
───────
60,858
═══════
Statutory
reserve
KD 000’s
50,362
───────
5,672
───────
56,034
═══════
56,034
───────
4,824
───────
60,858
═══════
Voluntary
reserve
KD 000’s
(1,515)
7,233
───────
7,233
───────
5,718
═══════
5,718
(57,123)
───────
(57,123)
───────
(51,405)
═══════
Foreign
currency
translation
reserve
KD 000’s
The attached notes 1 to 31 form part of these consolidated financial statements.
200,000
───────
───────
200,000
═══════
200,000
───────
338,893
───────
538,893
═══════
Share
capital
KD 000’s
IN EQUITY
The attached Notes 1 to 31 form part of these consolidated financial statements.
At 31 December 2012
Total comprehensive income
Dividends
Transfer to reserves (note 15)
At 1 January 2012
Profit for the year
Other comprehensive income
At 31 December 2013
Total comprehensive (loss) income
Increase in share capital (note 15)
Dividends (note 26)
Transfer to reserves (note 15)
At 1 January 2013
Profit for the year
Other comprehensive loss
CONSOLIDATED
STATEMENT
OF CHANGES
CONSOLIDATED
STATEMENT
OF CHANGES
IN EQUITY
For
the
year
ended
31
December
2013
For the year ended 31 December 2013
Kuwait Foreign Petroleum Exploration Company K.S.C. (Closed) and Subsidiaries
60,636
55,627
───────
55,627
(60,588)
(11,344)
───────
44,331
═══════
44,331
48,262
───────
48,262
(44,331)
(9,648)
───────
38,614
═══════
Retained
earnings
KD 000’s
359,845
55,627
7,233
───────
62,860
(60,588)
───────
362,117
═══════
362,117
48,262
(57,123)
───────
(8,861)
338,893
(44,331)
───────
647,818
═══════
Total
KD 000’s
Kuwait Foreign Petroleum Exploration Company K.S.C. (Closed) And Subsidiaries
CONSOLIDATED
CASH FLOWSCompany K.S.C. (Closed) and Subsidiaries
Kuwait
ForeignSTATEMENT
PetroleumOFExploration
For the year ended 31 December
2013
CONSOLIDATED
STATEMENT
OF CASH FLOWS
For the year ended 31 December 2013
OPERATING ACTIVITIES
Profit before taxation and directors' fees from continuing operations
Profit (loss) before taxation and directors' fees from discontinued operations
Notes
Profit before taxation and directors' fees
Adjustments to reconcile profit before taxation and directors' fees to
net cash flows:
Depreciation, depletion and amortization
Exploration costs written off
Net impairment losses
Provision for slow moving inventory items
Interest income
Unwinding of discount on decommissioning
Goodwill impairment
Finance costs
Reversal of allowance for doubtful debts
Provision for employees’ end of service benefits
4
9
10
18
8
13
7
14
Working capital adjustments:
Trade and other receivables
Inventories
Trade and other payables
Income tax paid
Employee’s end of service benefits paid
Directors’ fees paid
14
Net cash flows from operating activities
INVESTING ACTIVITIES
Receipt of funds held by Ultimate Parent Company
Expenditure on property, plant and equipment
Interest income received
Decrease in restricted deposits with bank
Expenditure on exploration and evaluation assets
Net cash flow from disposal of the discontinued operation
Acquisition of subsidiaries, net of cash acquired
9
5
10
4
3
Net cash flows used in investing activities
FINANCING ACTIVITIES
Net proceeds from issue of share capital
Repayment of long-term borrowing
Proceeds from loans and borrowings
Finance costs paid
Due to Ultimate Parent Company and affiliates
15
Net cash flows from financing activities
NET DECREASE IN CASH AND CASH EQUIVALENTS
Net foreign exchange difference
Cash and cash equivalents at 1 January
CASH AND CASH EQUIVALENTS AT 31 DECEMBER
5
2013
KD 000’s
104,826
173
───────
104,999
154,381
(32,151)
───────
122,230
124,863
27,460
27,503
387
(1,070)
4,494
2,326
1,432
(193)
2,892
───────
295,093
94,049
26,188
34,666
123
(743)
2,745
215
(313)
1,068
───────
280,228
(35,917)
(13,574)
30,719
───────
276,321
(8,174)
(6,462)
12,288
───────
277,880
(47,440)
(1,279)
(54)
───────
227,548
───────
(37,600)
(195)
(47)
───────
240,038
───────
(143,894)
(416,305)
1,070
(34,768)
(62,370)
66,177
(70,282)
───────
(660,372)
───────
27,701
(329,394)
743
(34,779)
───────
(335,729)
───────
338,893
(12,857)
211,538
(1,432)
(168,968)
───────
367,174
───────
(65,650)
78,442
───────
27,916
───────
40,708
═══════
(25,351)
(215)
109,926
───────
84,360
───────
(11,331)
11,158
───────
28,089
───────
27,916
═══════
Wqeqeqeqeqeqe
qeqeqeq
The attached notes 1 to 31 form part of these consolidated financial statements.
The attached Notes 1 to 31 form part of these consolidated financial statements.
2012
KD 000’s
34
Kuwait
Foreign
Petroleum
Exploration
Company
K.S.C.
(Closed) and
Subsidiaries
Kuwait
Foreign
Petroleum
Exploration
Company
K.S.C.
Kuwait
Foreign
Petroleum
Exploration
CompanySTATEMENTS
K.S.C. (Closed)
(Closed) and
and Subsidiaries
Subsidiaries
NOTES
TO
THE
CONSOLIDATED
FINANCIAL
Kuwait
Foreign
Petroleum
Exploration
Company
K.S.C.
(Closed)
and
NOTES
TO
THE
CONSOLIDATED
FINANCIAL
STATEMENTS
Kuwait
Foreign
Petroleum
Exploration
Company
K.S.C.
(Closed)
and Subsidiaries
Subsidiaries
NOTES
TO THE
CONSOLIDATED
FINANCIAL
STATEMENTS
At
31 December
2013
Kuwait
Foreign
Petroleum
Exploration
Company
K.S.C.
(Closed)
And Subsidiaries
Kuwait
Foreign
Petroleum
Exploration
Company
K.S.C.
(Closed)
and
Subsidiaries
At
31 December
2013
NOTES
TO
THE
CONSOLIDATED
FINANCIAL
STATEMENTS
Kuwait
Foreign
Petroleum
Exploration
Company
K.S.C.
(Closed)
and
Subsidiaries
NOTES
TO
THE
CONSOLIDATED
FINANCIAL
STATEMENTS
At
31
December
2013
Kuwait
Foreign
Petroleum
Exploration
Company
K.S.C.
(Closed)
and
Subsidiaries
Kuwait
Foreign
Petroleum
Exploration
Company
K.S.C.
(Closed)
and
Subsidiaries
NOTES
TO
THE
CONSOLIDATED
FINANCIAL
At
31 December
2013
Kuwait
Foreign
Petroleum
Exploration
Company
K.S.C.
NOTES
TO
THE
CONSOLIDATED
FINANCIAL
STATEMENTS
Kuwait
Foreign
Petroleum
Exploration
CompanySTATEMENTS
K.S.C. (Closed)
(Closed) and
and Subsidiaries
Subsidiaries
At
2013
1 31 December
CORPORATE
INFORMATION
NOTES
TO
THE
CONSOLIDATED
FINANCIAL
STATEMENTS
NOTES
TO
THE
CONSOLIDATED
FINANCIAL
STATEMENTS
NOTES
TO
THE
CONSOLIDATED
FINANCIAL
STATEMENTS
1 31 December
CORPORATE
INFORMATION
At
2013CONSOLIDATED
NOTES
TO
THE
FINANCIAL
1 31
CORPORATE
INFORMATION
At
December
2013
NOTES
TO
THE
CONSOLIDATED
FINANCIAL STATEMENTS
STATEMENTS
At
31
December
2013
At
31
December
2013
At
31
December
2013
1
CORPORATE
INFORMATION
Kuwait
Foreign
Petroleum
Exploration
Company
K.S.C.
(Closed)
(the
“Parent Company”) was registered in Kuwait in
At
31
December
2013
1
CORPORATE
INFORMATION
At
2013INFORMATION
Kuwait
Foreign Petroleum
Exploration Company K.S.C. (Closed) (the “Parent Company”) was registered in Kuwait in
1 31 December
CORPORATE
35
Kuwait
Foreign
Exploration
Company
K.S.C. (Closed)
(the (KPC)
“Parent(the
Company”)
registered
in Kuwait
in
1981 asCORPORATE
a whollyPetroleum
ownedINFORMATION
subsidiary
of Kuwait
Petroleum
Corporation
“Ultimatewas
Parent
Company”)
and its
1
1
1981 asCORPORATE
a whollyPetroleum
ownedINFORMATION
subsidiary
of Kuwait
Petroleum
Corporation
(KPC)
(the
“Ultimatewas
Parent
Company”)
and its
Kuwait
Foreign
Exploration
Company
K.S.C.
(Closed)
(the
“Parent
Company”)
registered
in
Kuwait
in
1
CORPORATE
INFORMATION
1981
as
a
wholly
owned
subsidiary
of
Kuwait
Petroleum
Corporation
(KPC)
(the
“Ultimate
Parent
Company”)
and
its
registered
address
is
P.O.
Box
5291,
Safat
13053,
State
of
Kuwait.
The
principal
activities
of
the
Parent
Company
and
Kuwait
Foreign
Petroleum
Exploration
Company
K.S.C.
“Parent
Company”)
was
registered
in Kuwaitand
in
1
CORPORATE
INFORMATION
registered
address
is P.O.
Box
5291,ofSafat
13053,
State of(Closed)
Kuwait.(the
The(KPC)
principal
activities
ofParent
the
Parent
Company
11981
CORPORATE
INFORMATION
as
a
wholly
owned
subsidiary
Kuwait
Petroleum
Corporation
(the
“Ultimate
Company”)
and
its
Kuwait
Foreign
Petroleum
Exploration
Company
K.S.C.
(Closed)
(the
“Parent
Company”)
was
registered
in
Kuwait
in
registered
address
is P.O.subsidiary
Box
5291,
Safat
13053,
State
of(Closed)
Kuwait.
The
principal
activities
ofParent
the
Parent
Company
and
its subsidiaries
(collectively
the
“Group”)
arePetroleum
the
exploration
and
development
of oil and
gas
outside
theKuwait
State
of
1981
as
a
wholly
owned
of
Kuwait
Corporation
(KPC)
(the
“Ultimate
Company”)
and
its
Kuwait
Foreign
Petroleum
Exploration
Company
K.S.C.
(the
“Parent
Company”)
was
registered
in
in
Kuwait
Foreign
Petroleum
Exploration
Company
K.S.C.
(Closed)
(the
“Parent
Company”)
was
registered
in
Kuwait
in
its subsidiaries
(collectively
the
“Group”)
arePetroleum
the
exploration
and
development
of oil and
gas
outside
theKuwait
State
of
registered
address
is
P.O.
Box
5291,
Safat
13053,
State
of
Kuwait.
The
principal
activities
of
the
Parent
Company
and
Kuwait
Foreign
Petroleum
Exploration
Company
K.S.C.
(Closed)
(the
“Parent
Company”)
was
registered
in
in
1981
as
a
wholly
owned
subsidiary
of
Kuwait
Corporation
(KPC)
(the
“Ultimate
Parent
Company”)
and
its
its
subsidiaries
(collectively
the
“Group”)
arePetroleum
the
exploration
and
development
of oil and
gas
outside
theKuwait
State
of
Kuwait.
registered
address
is P.O.subsidiary
Box
5291,
Safat
13053,
State
of(Closed)
Kuwait.
The
principal
activities
ofParent
the
Parent
Company
and
1981
as
aa wholly
owned
of
Kuwait
Corporation
(KPC)
(the
“Ultimate
Company”)
and
its
Kuwait
Foreign
Petroleum
Exploration
Company
K.S.C.
(Closed)
(the
“Parent
Company”)
was
registered
in
in
1981
as
wholly
owned
subsidiary
of
Kuwait
Petroleum
Corporation
(KPC)
(the
“Ultimate
Parent
Company”)
and
its
Kuwait
Foreign
Petroleum
Exploration
Company
K.S.C.
(the
“Parent
Company”)
was
registered
in
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in
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(collectively
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“Group”)
are
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gas
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of
1981
as
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owned
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Petroleum
Corporation
(KPC)
(the
“Ultimate
Parent
Company”)
and
its
registered
address
is
P.O.
Box
5291,
Safat
13053,
State
of
Kuwait.
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principal
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of
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Parent
Company
and
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its
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(collectively
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“Group”)
arePetroleum
theState
exploration
andThe
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of
1981
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and
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Safat
13053,
of
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principal
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the
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after
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cancelled
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No. 15 on
of2012
1960.
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was
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The New
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LawGeneral
no.Law
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has
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Law
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of2012
1960.
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Law
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Administration
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the Board
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15 of2012
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the
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31
December
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SIGNIFICANT
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and
has
the
ability
to
affect
those
returns
through
its
power
over
the
investee.
Once
control
is
established,
the
standard
requires
the
Group
to
start
consolidating
the
investee
from
the
date
the
investor
its involvement
the
investee
and
hasconsolidation
thethe
ability
towhen
affect
those
returns
itsofpower
over
the
investee.
Once
The
adoption
ofofwith
IFRS
10
did
notand
materially
affect
the
financial
position
orthrough
performance
offrom
the
Group;
however
this
Changes
in
accounting
policies
disclosures
(continued)
control
is
established,
the
standard
requires
Group
to
start
consolidating
the
investee
the
date
the
investor
obtains
control
the
investee
and
cease
the
investor
loses
control
the
investee.
The
adoption
of
IFRS
10
did
not
materially
affect
the
financial
position
or
performance
of
the
Group;
however
this
resulted
in
change
in
accounting
policy
for
consolidation
as
described
under
“basis
for
consolidation”
below.
obtains
control
of
the
investee
and
cease
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when
the
investor
loses
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of
the
investee.
control
is
the
standard
requires
the
Group
to
consolidating
the
from
the
date
the
obtains
control
of
the
investee
and
cease
consolidation
when
the
investor
loses
control
the
investee.
control
isin established,
established,
the
standard
requires
the
Group
to
start
consolidating
the investee
investee
from
the
date
the investor
investor
resulted
change
in accounting
policy
for
consolidation
asstart
described
under
“basis
for of
consolidation”
below.
The
adoption
of
IFRS
10
did
not
materially
affect
the
financial
position
or
performance
of
the
Group;
however
this
obtains
control
of
the
investee
and
cease
consolidation
when
the
investor
loses
control
of
the
investee.
The
adoption
of
IFRS
10
did
not
materially
affect
the
financial
position
or
performance
of
the
Group;
however
this
resulted
in
change
in
accounting
policy
for
consolidation
as
described
under
“basis
for
consolidation”
below.
obtains
control
of
the
investee
and
cease
consolidation
when
the
investor
loses
control
of
the
investee.
obtains
control
ofIFRS
the
investee
and
ceasefor
consolidation
when
the investor
loses
control
of
theof
investee.
resulted
in
change
in
accounting
policy
consolidation
as
described
under
“basis
for
consolidation”
below.
The
adoption
of
10
did
not
materially
affect
the
financial
position
or
performance
the
Group;
however
this
IFRS
11:
Joint
Arrangements
(effective
annual
periods
beginning
on
or
after
1
January
2013)
resulted
in
change
in
accounting
policy
for
consolidation
as
described
under
“basis
for
consolidation”
below.
The
adoption
of
IFRS
10
did
not
materially
affect
the
financial
position
or
performance
of
the
Group;
however
this
The
adoption
of
IFRS
10
did
not
materially
affect
the
financial
position
or
performance
of
the
Group;
however
this
The
adoption
of
IFRS
10
did
not
materially
affect
the
financial
position
or
performance
of
the
Group;
however
this
resulted
in
change
in
accounting
policy
for
consolidation
as
described
under
“basis
for
consolidation”
below.
IFRS
11
replaces
IAS
31
Interests
in
Joint
Ventures
and
SIC-13
Jointly-controlled
Entities
—
Non-monetary
The
adoption
of
IFRS
10
did
not
materially
affect
the
financial
position
or
performance
of
the
Group;
however
this
resulted
in
change
in
accounting
policy
for
consolidation
as
described
under
“basis
for
consolidation”
below.
resulted
in
change
in
accounting
policy
for
consolidation
as
described
under
“basis
for
consolidation”
below.
The
adoption
of
IFRS
10
did
not
materially
affect
the
financial
position
or
performance
of
the
Group;
however
this
resulted
in
change
in
accounting
policy
for
consolidation
as
described
under
“basis
for
consolidation”
below.
Contributions
by
Venturers.
IFRS
11
removes
the
option
to
account
for
jointly
controlled
entities
(JCEs)
using
resulted
in
change
in
accounting
policy
for
consolidation
as
described
under
“basis
for
consolidation”
below.
resulted in change in accounting policy for consolidation as described under “basis for consolidation” below.
proportionate consolidation. Instead, JCEs that meet the definition of a joint venture under IFRS 11 must be accounted
for using the equity method.
8
8 impact on the performance of the Group, however, it has
The application of this new standard did not have any
8
8
resulted in changes to the accounting for Joint Ventures
as either “joint operations” or “interests in contractual
8
8
arrangements”. Refer note 2, 29 and 30.
8
8
8
8
8
IFRS 12: Disclosure of Involvement with Other Entities (effective for annual periods beginning on or after 1 January
2013)
Kuwait
Foreign
Petroleum
Exploration
CompanySTATEMENTS
K.S.C. (Closed) and Subsidiaries
NOTES
TO
THE
CONSOLIDATED
FINANCIAL
At
31 December
2013
Kuwait
Petroleum
CompanySTATEMENTS
K.S.C. (Closed) and Subsidiaries
Changes
inForeign
accounting
policies and Exploration
disclosuresFINANCIAL
(continued)
NOTES
TO
THE
CONSOLIDATED
NOTES
TO THE
At 31 December
2013CONSOLIDATED FINANCIAL STATEMENTS
At 31 December
2013CONSOLIDATED FINANCIAL STATEMENTS
NOTES
TO THE
At
31
December
2013 ACCOUNTING
2 3111:
SIGNIFICANT
POLICIES
(continued)
IFRS
Joint Arrangements
(effective for annual
periods
beginning on or after 1 January 2013)
At
December
2013 ACCOUNTING
2
SIGNIFICANT
POLICIES (continued)
2
ACCOUNTING
POLICIES
IFRS
11SIGNIFICANT
replaces
IAS
31
InterestsExploration
in Joint
Ventures(continued)
and SIC-13 Jointly-controlled
Entities
— Non-monetary
Kuwait
Foreign
Petroleum
(Closed)
and
Subsidiaries
2
SIGNIFICANT
ACCOUNTING
POLICIESCompany
(continued) K.S.C.
Kuwait
Foreign
Petroleum
Exploration
Company
K.S.C.
(Closed)
and
Subsidiaries
Changes
in
accounting
policies
and
disclosures
(continued)
Contributions
by
Venturers.
IFRS
11
removes
the
option
to
account
for
jointly
controlled
entities
(JCEs) using
2NOTES
SIGNIFICANT
ACCOUNTING
POLICIES
(continued)
TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES
THE
CONSOLIDATED
FINANCIAL
STATEMENTS
Changes
inTO
accounting
policies
andJCEs
disclosures
(continued)
proportionate
consolidation.
Instead,
that meet
the definition of
a joint venture under IFRS 11 must be accounted
NOTES
THE
FINANCIAL
STATEMENTS
Changes
inTO
accounting
policies
and disclosures
(continued)
At
31 December
2013 CONSOLIDATED
At
December
2013
Changes
in accounting
policies
and disclosures
for 31
using
the
equity
method.
IFRS
11:
Joint
Arrangements
(effective
for annual(continued)
periods beginning on or after 1 January 2013)
At
31
December
2013
Changes
in accounting
policies
and disclosures
(continued)
IFRS
11: Joint Arrangements
(effective did
for annual
periods
beginning
orperformance
after 1 January
2013)
The application
of IAS
this new
standard
not have
any impact
on on
theJointly-controlled
of the
Group,—however,
it has
IFRS
11 Joint
replaces
31 Interests
Ventures
and
SIC-13
Entities
Non-monetary
IFRS
11:
Arrangements
(effectiveinforJoint
annual
periods
beginning
on
or after 1 January
2013)
2IFRS
SIGNIFICANT
ACCOUNTING
POLICIES
(continued)
IFRS
11:
Joint
Arrangements
(effective
annual
periods
beginning
on“joint
orforafter
1 January
2013)
11SIGNIFICANT
replaces
IAS
31
Interests
infor
Joint
Ventures
and
SIC-13
Jointly-controlled
Entities
— Non-monetary
resulted
in
changes
to
the
accounting
for
Joint
Ventures
as
either
operations”
or
“interests
in
contractual
Contributions
by
Venturers.
IFRS
11
removes
the
option
to
account
jointly
controlled
entities
(JCEs)
using
2
ACCOUNTING
POLICIES
(continued)
IFRS
11
replaces
IAS
31
Interests
in
Joint
Ventures
and
SIC-13
Jointly-controlled
Entities
—
Non-monetary
IFRS 11: Joint Arrangements (effective for annual periods beginning on or after 1 January 2013)
Contributions
by
Venturers.
IFRS
thethe
option
account
forventure
jointly under
controlled
entities
(JCEs)
using
IFRS
11 replaces
IAS
Interests
inremoves
Joint
Ventures
andto
SIC-13
Jointly-controlled
Entities
— Non-monetary
arrangements”.
Refer
note312,Instead,
29
and 11
30.
proportionate
consolidation.
JCEs
that meet
definition
of a joint
IFRS
11 must
be accounted
Contributions
by
Venturers.
IFRS
11
removes
the
option
to
account
for
jointly
controlled
entities
(JCEs)
using
IFRS
11 in
replaces
IAS policies
31 Instead,
Interests
inremoves
Joint
Ventures
andto SIC-13
Jointly-controlled
Entities
— Non-monetary
proportionate
consolidation.
JCEs
that
meet
the
definition
of
a
joint
venture
under
IFRS
11
must
be
accounted
Changes
accounting
and
disclosures
(continued)
Contributions
by
Venturers.
IFRS
11
the
option
account
for
jointly
controlled
entities
(JCEs)
using
for
using
the
equity
method.
proportionate
consolidation.
Instead,
JCEs
that
meet
the
definition
of
a
joint
venture
under
IFRS
11
must
be
accounted
Changes
in accounting
policies
and11
disclosures
(continued)
Contributions
by Venturers.
IFRS
removes
the
option
to account
forventure
jointly under
controlled
entities
(JCEs)
using
for
using the equity
method. Instead,
proportionate
consolidation.
JCEs
that
meet
the
definition
of
a
joint
IFRS
11
must
be
accounted
The
application
of method.
this
newInstead,
standard
didOther
not meet
have
anydefinition
impact on
the
performance
of the
Group,
it has
for
using
equity
IFRS
12: the
Disclosure
of Involvement
with
Entities
(effective
for
annual
periodsunder
beginning
on
or however,
after
1accounted
January
proportionate
consolidation.
JCEs
that
the
of
a
joint
venture
IFRS
11
must
be
for
using
thechanges
equity
IFRS
11: in
Joint
Arrangements
(effective
for
periods
beginning
orperformance
after
1 January
2013)
The
application
of method.
this
newaccounting
standard did
not
have
any impact
on on
the
of the
Group, however,
it has
resulted
to the
forannual
Joint
Ventures
as either
“joint
operations”
or
“interests
in contractual
2013)
Theusing
application
of method.
this
new standard
not
have
any impact
on on
the
of the
Group, however,
it has
IFRS
11: the
Joint
Arrangements
(effective did
for
annual
periods
beginning
orperformance
after
1 January
2013)
for
equity
resulted
in
changes
to
the
accounting
for
Joint
Ventures
as
either
“joint
operations”
or
“interests
in
contractual
The
application
of IAS
this
new
standard
did
not
have
any impact
on the
performance
of the
Group,
it has
IFRS
11 in
replaces
312,accounting
Interests
in
Joint
Ventures
and
SIC-13
Jointly-controlled
Entities
—however,
Non-monetary
arrangements”.
Refer
note
29
and
30.
resulted
changes
to
the
for
Joint
Ventures
as
either
“joint
operations”
or
“interests
in
contractual
IFRS
12
sets
out
the
requirements
for
disclosures
relating
to
an
entity’s
interests
in
subsidiaries,
joint
arrangements,
11inreplaces
312,accounting
Interests
Joint
Ventures
and
SIC-13
Jointly-controlled
Entities
Non-monetary
The
application
of IAS
this
new
standard
did
not
have
any impact
on the
performance
of the
Group,—however,
it has
arrangements”.
Refer
note
29
and 11
30.in
resulted
changes
to
the
for
Joint
Ventures
as
either
“joint
operations”
or
“interests
in
contractual
Contributions
by
Venturers.
IFRS
removes
the
option
to
account
for
jointly
controlled
entities
(JCEs)
using
arrangements”.
Refer
note
2,accounting
29
and
30.requirements
associates
and
structured
entities.
The
inoption
IFRS as
12
are more
comprehensive
than
the
previously
existing
Contributions
by
Venturers.
IFRS
11
removes
the
to
account
for
jointly
controlled
entities
(JCEs)
using
resulted
in
changes
to
the
for
Joint
Ventures
either
“joint
operations”
or
“interests
in
contractual
arrangements”.consolidation.
Refer note 2,Instead,
29 and 30.
proportionate
JCEs
that
meet
the
definition
of
a
joint
venture
under
IFRS
11
must
be
accounted
disclosure
requirements
for2,Instead,
subsidiaries,
for
a subsidiary
controlled
with
abemajority
of
IFRS
12: Disclosure
Involvement
with
Entities
(effective
for
periods
beginning
on
or after
1accounted
January
proportionate
consolidation.
JCEsOther
thatexample,
meet
thewhere
definition
of aannual
joint isventure
under
IFRSless
11 than
must
arrangements”.
Refer of
note
29 and 30.
for
using
the
equity
method.
IFRS
12:
Disclosure
of
Involvement
with
Other
Entities
(effective
for
annual
periods
beginning
on
or
after
1
January
voting
rights.
While
the
Group
has
subsidiaries
with
material
non-controlling
interests,
there
are
no
unconsolidated
2013)
for using
equity method.
IFRS
12: the
Disclosure
of Involvement with Other Entities (effective for annual periods beginning on or after 1 January
The
application
of this
new
standard
didOther
not have
any(effective
impact
on
of the Group,
however,
it has
2013)
IFRS
12:
Disclosure
of
Involvement
with
Entities
forthe
annual
periods
beginning
onin
orthe
after
1 January
structured
entities.
The
adoption
of
this
new
standard
has
resulted
inperformance
additional
disclosures
consolidated
IFRS
12
sets
out
the
requirements
for
disclosures
relating
to an
entity’s
interests
in subsidiaries,
joint
arrangements,
2013)
The
application
of
this
new
standard
didOther
not have
any(effective
impact
on
the
performance
of the Group,
however,
it has
IFRS
12:
Disclosure
of
Involvement
with
Entities
for
annual
periods
beginning
on
or
after
1
January
resulted
in
changes
to
the
accounting
for
Joint
Ventures
as
either
“joint
operations”
or
“interests
in
contractual
2013)
IFRS
12 in
sets
out
theRefer
requirements
for 29
disclosures
relating
toas
aneither
entity’s
interests
in subsidiaries,
joint
arrangements,
financial
statement.
note
11, The
28,
andJoint
30. Ventures
associates
and
structured
entities.
requirements
in
IFRS
12
are
more
comprehensive
than
the
previously
existing
resulted
changes
to
the
accounting
for
“joint
operations”
or
“interests
in
contractual
IFRS
12
sets
out
the
requirements
for
disclosures
relating
to
an
entity’s
interests
in
subsidiaries,
joint
arrangements,
2013)
arrangements”.
Refer
2, 29 and
30.requirements
associates
and
structured
entities.
The
in IFRS
more interests
comprehensive
than less
the previously
existing
IFRS
12 sets
out
the note
requirements
for
disclosures
relating
to12
an
entity’s
in subsidiaries,
disclosure
requirements
for
for example,
where
a are
subsidiary
is controlled
with
than arrangements,
a majority
of
arrangements”.
Refer
note
2, subsidiaries,
29 and
30.requirements
associates
and
structured
entities.
The
in IFRS
are
more interests
comprehensive
than the joint
previously
existing
IFRS
12
sets
out
the
requirements
for
disclosures
relating
to12
an
entity’s
in subsidiaries,
joint
arrangements,
disclosure
requirements
for
subsidiaries,
for
example,
where
a
subsidiary
is
controlled
with
less
than
a
majority
of
associates
and
structured
entities.
The
requirements
in
IFRS
12
are
more
comprehensive
than
the
previously
existing
voting
rights.
While
the
Group
has
subsidiaries
with
material
non-controlling
interests,
there
are
no
unconsolidated
IAS
27:
Separate
Financial
Statements
(Amendment)
(effective
for
annual
periods
beginning
on
or
after
1
January
disclosure
requirements
for
subsidiaries,
for
example,
where
a
subsidiary
is
controlled
with
less
than
a
majority
of
associates
and
structured
entities.
The
requirements
in material
IFRS
12anon-controlling
are
more comprehensive
than less
the
previously
existing
voting
rights.
While
the
Group
has
subsidiaries
with
interests,
there
are
no
unconsolidated
disclosure
requirements
for
subsidiaries,
for
example,
where
subsidiary
is
controlled
with
than
a
majority
of
IFRS
12:
Disclosure
of
Involvement
with
Other
Entities
(effective
for
annual
periods
beginning
on
or
after
1
January
structured
entities.
The
adoption
of
this
new
standard
has
resulted
in
additional
disclosures
in
the
consolidated
2013)
voting
rights.
While
the
Group
has
subsidiaries
with
material
non-controlling
interests,
there
are
no
unconsolidated
IFRS
12:
Disclosure
of
Involvement
with
Other
Entities
(effective
for annual
beginning
oninthan
or
after
1 January
disclosure
requirements
for
subsidiaries,
for
example,
where
anon-controlling
subsidiary
is periods
controlled
with
less
aconsolidated
majority
of
structured
entities.
The
adoption
of
this
new
standard
has
resulted
in
additional
disclosures
the
voting
rights.
While
the
Group
has
subsidiaries
with
material
interests,
there
are
no
unconsolidated
2013)
financial
statement.
noteIFRS
11, 28,
29
30.standard
structured
entities.
The
adoption
of10
this
new
has
resulted
in 27
additional
disclosures
innothe
consolidated
As a consequence
ofRefer
the new
andand
IFRS
12,
what
remains
of IAS
is interests,
limited
tothere
accounting
for
subsidiaries,
2013)
voting
rights.
While
Group
has
subsidiaries
with
material
non-controlling
are
unconsolidated
financial
statement.
Refer
note 11, 28,
29
and
30.standard
structured
entities.
The
adoption
of
new
has
resulted
ininterests
additional
disclosures in
thearrangements,
consolidated
IFRS
sets
out the
requirements
for this
disclosures
relating
to an
entity’s
subsidiaries,
joint
financial
statement.
Refer
note
28,
29
and
jointly12
entities,
and11,
associates
in30.
separate
financial
statements.
Thein
does not
present
separate
structured
entities.
The
adoption
of
new
standard
has
resulted
ininterests
additional
disclosures
in
the
consolidated
IFRS
12controlled
sets
out the
requirements
forthis
disclosures
relating
to an
entity’s
inGroup
subsidiaries,
joint
arrangements,
financial
statement.
Refer
note
11,
28,
29
and
30.
associates
and structured
entities.
The
requirements
in (effective
IFRS 12 are
more
comprehensive
than the
previously
existing
statements.
IAS
27:
Separate
Financial
Statements
(Amendment)
for
annual
periods
beginning
on
or
after
1
January
financial
statement.
Refer
note
11,
28,
29
and
30.
associates and structured entities. The requirements in IFRS 12 are more comprehensive than the previously existing
disclosure
requirements
for
subsidiaries,
for
example,
where
a
subsidiary
is
controlled
with
less
than
a
majority
of
IAS
27:
Separate
Financial
Statements
(Amendment)
(effective
for
annual
periods
beginning
on
or
after
1
January
2013)
IAS 27: Separate
Financial
Statements (Amendment)
for annual isperiods
beginning
on or
after
1 January
disclosure
requirements
for subsidiaries,
for example, (effective
where a subsidiary
controlled
with less
than
a majority
of
voting
rights.
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the Group
has subsidiaries
with material
non-controlling
interests,
there are
noafter
unconsolidated
2013)
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27:
Separate
Financial
Statements
(Amendment)
(effective
for
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periods
beginning
on
or
1
January
As
a28:
consequence
ofintheAssociates
new
IFRS
10
and
IFRS
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remains
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limited
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2013)
voting
rights.
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27:
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(Amendment)
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for
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beginning
on
or
1
January
structured
entities.ofThe
of10this
standard
has
resulted
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additional
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in the
2013)
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associates
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statements.
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does not
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adoption
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standard
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1structured
January
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and
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for consolidated
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2013)
financial
statement.
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note
11,
28,
29
and
30.
jointly
controlled
entities,
and
associates
in
separate
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statements.
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Group
does
not
present
separate
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consequence
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the
new
IFRS
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and
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remains
of
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limited
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accounting
for
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financial
statements.
statement.of
Refer
note
11,
28,
and
30.
jointly
controlled
entities,
and
associates
inArrangements
separate
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statements.
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Group
does innot
present
separate
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the new
IFRS
1129
Joint
and IFRS
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remains
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entities, and associates in separate financial statements. The Group does not present separate
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statements.
28
Investments
in
Associates,
has
been
renamed
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28
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in
Associates
and
Joint
Ventures,
and
describes
jointly
controlled
entities, and associates in separate financial statements. The Group does not present separate
financial
statements.
IAS
27:
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(Amendment)
(effective
annual periods
beginning
on or after
1 January
the
application
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the
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to investments
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inforaddition
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27: Investments
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annual periods
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January
financial
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2013)
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28:
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in
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and
Joint
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(Amendment)
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for
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beginning
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as
at
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January
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did
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qualify
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2013)
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beginning
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of Interests
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2013) ofin
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onseparate
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January
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separate
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consequence
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financial
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Other
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This
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interpretations
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reasonably
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to
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addition
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the
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describes
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financial
position
performance
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at aventures
future date.
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intends
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as
atof
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2013or
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inapplied
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in
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28:
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(effective
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on
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as atthey
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did
qualify
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in these
categories.
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28:
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in
Associates
andnot
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(effectiveinforaddition
annual periods
beginning
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equity
method
to investments
in joint
ventures
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become
effective.
as atof
1but
January
2013
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qualify
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categories.
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2013)
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issued
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as
at
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categories.
issuedbut
butthe
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effective
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issued
to the
date of issuance
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financial
statements
are Entities,
listed below.
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a consequence
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Arrangements
and IFRS
12Group’s
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Standards
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issuance
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Group’s
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listed
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IFRS
9:
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Instruments:
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and
Measurement
This
of
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Group
reasonably
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impact
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28
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has
been
renamed
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28
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in
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and
Joint
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and
describes
Standards
issued
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up
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the
date
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issuance
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Group’s
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statements
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listed
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issued
but
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yeteffective
effective
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listing
of
standards
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those
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Group
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have
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inbut
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has
been
renamed
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28
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inGroup’s
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andGroup
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and
describes
Standards
issued
not
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up
to
the
date
of
issuance
of
the
financial
statements
are
listed
below.
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9,
as
issued,
reflects
the
first
phase
of
the
IASB’s
work
on
the
replacement
of
IAS
and
applies
to
disclosures,
financial
position
or
performance
when
applied
at
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future
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intends
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adopt
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This
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and
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issued
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Group’s
Standards
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issuance
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the
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ofmeasurement
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method
to assets
investments
in joint
ventures
in
addition
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associates.
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Group’s
This
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and
interpretations
issued
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Group
reasonably
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classification
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as
at
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2013
not qualify
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become
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ordid
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when
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The Group
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is
addressing
hedge
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impairment
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assets.date.
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first
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when
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position
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performance
when
applied
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future
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effective.
will
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IFRS 9: Financial
Instruments:
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Standards
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effective
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Measurement
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as
issued,
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and
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mandatory
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phases,
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Group
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have
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as
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and
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disclosures,
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position
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phases,
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9,
as
issued,
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work
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the
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applies
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when
applied
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future
date.
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Group
intends
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adopt
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January
2015.
On
November
19,
2013,
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International
Accounting
Standards
Board
(IASB)
issued
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the
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is
addressing
hedge
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impairment
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as defined
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when
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9
that
introduced
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and
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1
January
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will
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measurement
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Group’s
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assets.
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the IASB
is addressing
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the
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effect
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the final
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isofissued.
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will
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from
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Kuwait
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(Closed)
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effect
in effective
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issued.
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standard
was
will
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Group’s
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Group
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initially
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beginning
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January
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amendments
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mandatory
Kuwait
Foreign
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effect
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IFRS
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and Measurement
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on
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will
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aspects
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eligibility
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for
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time
value
initially
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January
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amendments
to
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9
mandatory
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in
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IFRS
9:
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Measurement
effective
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ofTHE
IFRS
9CONSOLIDATED
and transition
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issued
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2011,
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NOTES
FINANCIAL
STATEMENTS
initially
effective
forreflects
annual
periods
beginning
on
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after
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January
2013,
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to 39
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IFRS
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Accounting
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Instruments:
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statements. of options and forward contracts, qualifying
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discontinuation of hedging relationships etc.
Investment Entities (Amendments to IFRS 10, IFRS 12 and IAS 27) (effective for annual periods beginning on or after
Investment Entities (Amendments to IFRS 10, IFRS 12 and IAS 27) (effective for annual periods beginning on or after
1 January 2014)
1 January 2014)
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9
These amendments are effective for annual periods beginning
on or after 1 January 2014 provide an exception to the
9
consolidation requirement for entities that meet the definition
of an investment entity under IFRS 10. The exception to
consolidation requirement for entities that meet the definition of an investment entity under IFRS 10. The exception to
consolidation requires investment entities to account for subsidiaries at fair value through profit or loss. It is not
consolidation requires investment entities to account for subsidiaries at fair value through profit or loss. It is not
36
2Standards
SIGNIFICANT
POLICIES (continued)
issued but notACCOUNTING
yet effective (continued)
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ACCOUNTING
POLICIES (continued)
issued
yet
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(continued)
IFRS
9:
Financial
Instruments:
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and Measurement (continued)
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(continued)
IFRS
Financial
Instruments:
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and
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(continued)
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issued but
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(continued)
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entities
that adopt
IFRS
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amended
NovemberCompany
2013) can
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Kuwait
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(as
amended
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can
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either
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for
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9
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amended
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2013)
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accounting
policy
of
NOTES
TO
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CONSOLIDATED
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being.
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for
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impact
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9
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NOTES
TO
THE
CONSOLIDATED
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NOTES
TO
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3139December
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31
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statements.
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2
SIGNIFICANT
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9: Financial
Financial
Instruments:
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expected
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consolidation
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November
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IAS
32:
Financial
Instruments:
Presentation
Financial
Assets
Financial
liabilities
(Amendment)
expected
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would
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in
expected
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the
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(effective
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on
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January
2014)
IAS 32:
32:
Financial
Instruments:
Presentation
Offsetting
Assets
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Financial
liabilities
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39
for
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9
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(effective
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beginning
on
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after
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January
2014)
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39
for
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time
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9
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IAS
32:
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Instruments:
Presentation
Offsetting
Financial
Assets
and
Financial
liabilities
(Amendment)
The
amendments
clarify
the meaning
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“currently
a legally
enforceable
right
to set-off”
and also
clarify the
(effective
for annual
periods
beginning
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January
2014)
IAS 32:
Financial
Instruments:
Presentation
Offsetting
Financial
Assets and
Financial
liabilities
(Amendment)
statements.
The
amendments
clarify
the
meaning
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aa legally
enforceable
right
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set-off”
and
also
clarify
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statements.
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on
orto-after
1has
January
2014)
IAS 32:
Financial
Instruments:
Presentation
Offsetting
Financial
Assets
and
Financial
liabilities
(Amendment)
application
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32
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10,
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IAS
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gross
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IAS 36:
Impairment
of Assets
- Recoverable
Amount
Disclosures
Assets
(Amendment)
(effective
will
have
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position
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performance.
consolidation
requirement
for
entities
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meet
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definition
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investment
entity
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10.
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exception
to
IAS
36:
Impairment
of
Assets
Recoverable
Amount
Disclosures
for
Non-Financial
Assets
(Amendment)
(effective
for
consolidation
requirement
for
entities
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meet
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definition
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entity
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10.
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consolidated
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and
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annual
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after 1 position
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2014)
IAS 36:
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Amount
Disclosures
for Non-Financial
Assets
(Amendment)
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for
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entities
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IAS
32:
Financial
Instruments:
-- Offsetting
Financial
liabilities
(Amendment)
impairment
loss
has
been
recognised
or
reversed
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the
period.
IAS
32:
Financial
Instruments:
Presentation
Offsetting
Financial
Assets
and
Financial
liabilities
(Amendment)
addition,
these
amendments
require
disclosure
of
the
recoverable
amounts
for
the
assets
or
CGUs
for
which
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13
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36.
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impairment
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the financial
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31 December (effective
2013. Control
IAS
36:
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Non-Financial
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if,
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NOTES
THE
CONSOLIDATED
FINANCIAL
STATEMENTS
comprehensive
income
from
date
control
the date
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31 December
2013
comprehensive
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to
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When
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their
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2Profit
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to
their
accounting
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parent
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ofConsolidation
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awhen
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are
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statement of
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 Derecognizes the carrying amount of any NCI
10
 Derecognizes the cumulative translation differences
in equity
10
10 recorded
Profit
or
loss
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each
component
of
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comprehensive
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are
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component
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(OCI)
are attributed
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of the
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 Recognizes the fair value of the consideration received
10
10
parent
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parent
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10
 Recognizes
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retained
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necessary, adjustments
adjustments are
are made
made to
to the
the financial
financial statements
statements of
of subsidiaries
subsidiaries to
to bring
bring their
their accounting
accounting policies
policies
line Recognizes
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or deficit
in theAll
statement
of profit
orand
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and otherequity,
comprehensive
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into
with
the
Group’s
accounting
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intragroup
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income,
into line with the Group’s accounting policies. All intragroup assets and liabilities, equity, income, expenses
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and cash
cash
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the parent’s
share
of components
previously
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inon
OCI
to profit or loss or retained
flows
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between
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of
are
in
consolidation.
flows
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transactions
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the Group
Group
are eliminated
eliminated
in full
full
on
consolidation.
earnings, as appropriate, as would be required if the Group had directly disposed of the related assets or
liabilities.
37
Business combinations and goodwill
Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the
aggregate of the consideration transferred, measured10
10at acquisition date fair value and the amount of any non
controlling interest in the acquiree. For each business combination, the acquirer measures the non controlling interest
in the acquiree either at fair value or at the proportionate share of the acquiree’s identifiable net assets. Acquisition
Kuwait
Foreign
Petroleum
Exploration
Company
K.S.C.
(Closed)
and
Subsidiaries
Kuwait
Foreign
Petroleum
Exploration
Company
K.S.C.
(Closed)
and
Subsidiaries
Kuwait
Foreign
Petroleum
Exploration
Company
K.S.C.
(Closed)
and
Subsidiaries
Kuwait
Foreign
Petroleum
Exploration
Company
K.S.C.
(Closed)
and
Subsidiaries
Kuwait
Foreign
Petroleum
Exploration
Company
K.S.C.
(Closed)
and
Subsidiaries
NOTES
TO
THE
CONSOLIDATED
FINANCIAL
STATEMENTS
NOTES
TO
THE
CONSOLIDATED
FINANCIAL
STATEMENTS
Kuwait
Foreign
Petroleum
Exploration
Company
K.S.C.
(Closed)
and
NOTES
TO
THE
CONSOLIDATED
FINANCIAL
STATEMENTS
Kuwait Foreign
Exploration
CompanySTATEMENTS
K.S.C. (Closed) and Subsidiaries
Subsidiaries
NOTES
TO THE Petroleum
CONSOLIDATED
FINANCIAL
At
31 December
December
2013
NOTES
TO
THE
CONSOLIDATED
FINANCIAL
STATEMENTS
NOTES
TO
THE
CONSOLIDATED
FINANCIAL
STATEMENTS
At
31
2013
At
31 December
2013
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS
At
2013
NOTES
TO THE
THE
At 31
31 December
December
2013
At
31
December
2013CONSOLIDATED FINANCIAL STATEMENTS
At
31
December
2013
At
2013 ACCOUNTING
SIGNIFICANT
ACCOUNTING POLICIES
POLICIES (continued)
(continued)
22 31 December
SIGNIFICANT
22
SIGNIFICANT
ACCOUNTING POLICIES
(continued)
SIGNIFICANT
2
SIGNIFICANT ACCOUNTING
ACCOUNTING POLICIES
POLICIES (continued)
(continued)
22
SIGNIFICANT
ACCOUNTING
POLICIES
(continued)
SIGNIFICANT
ACCOUNTING
POLICIES
(continued)
Basis
of
consolidation
(continued)
Basis
of
consolidation
(continued)
Basis
of
consolidation
(continued)
Basis
of
consolidation
(continued)
Basis
of
consolidation
(continued)
A change
change in
in the
the ownership
ownership interest
interest of
of aa subsidiary,
subsidiary, without
without aa loss
loss of
of control,
control, is
is accounted
accounted for
for as
as an
an equity
equity transaction.
transaction.
A
A
change
in
the
ownership
interest
of
aa subsidiary,
without
aa loss
of
control,
is
accounted
for
as
an
equity
transaction.
Basis
of
(continued)
A
change
in
the
interest
of
subsidiary,
without
loss
of
control,
is
accounted
for
as
an
equity
transaction.
Basis
of consolidation
consolidation
(continued)
If
the
Group
losesownership
control
over
a subsidiary,
subsidiary,
it:
A
change
in
the
ownership
interest
of
a
subsidiary,
without
a
loss
of
control,
is
accounted
for
as
an
equity
transaction.
If
the
Group
loses
control
over
a
it:
If
the
Group
loses
control
over
a
subsidiary,
it:
A
change
in
the
ownership
interest
of
a
subsidiary,
without
a
loss
of
control,
is
accounted
for
as
an
equity
transaction.
If
the
Group
loses
control
over
a
subsidiary,
it:
A
change
in
the
ownership
interest
of
a
subsidiary,
without
a
loss
of
control,
is
accounted
for
as
an
equity
transaction.
If the
loses
control
over
a
subsidiary,
it:
 Group
Derecognizes
the
assets
(including
goodwill)
and
liabilities
of
the
subsidiary
Derecognizes
the
assets
(including
goodwill)
and
liabilities
of
the
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 Group
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the
assets
(including
goodwill)
and
liabilities
of
the
subsidiary
If
the
loses
control
over
a
subsidiary,
it:
Derecognizes
theover
assets
(including
goodwill)
and
liabilities
of
the
subsidiary
If the Group
loses control
a
subsidiary,
it:
Derecognizes
the
assets
(including
goodwill)
and
liabilities
of
the
subsidiary
carrying amount
amount of
of any
any NCI
NCI
 Derecognizes
Derecognizes the
the carrying
carrying
amount of
any NCIand liabilities of the subsidiary
assets
goodwill)
assets (including
(including
goodwill)
of in
theequity
subsidiary
 Derecognizes
the
carrying
amount
of
any
NCI
carrying
amount
of
any
NCIand liabilities
Derecognizes
the
cumulative
translation
differences
recorded
 Derecognizes
the
cumulative
translation
differences
recorded
in
equity
carrying
amount
of
any
NCI
Derecognizes
the
cumulative
translation
differences
recorded
in
equity
carrying
of anydifferences
NCI received
 Derecognizes
cumulative
translation
recorded
the
cumulative
translation
differences
recorded in
in equity
equity
Recognizes the
thethe
fair
value of
ofamount
the
consideration
 Derecognizes
Recognizes
fair
value
the
consideration
received
Derecognizes
the
cumulative
translation
differences
recorded
in
equity
the
fair
value
of
the
consideration
received
Derecognizes
the
cumulative
translation
differences
recorded
in
equity
 Recognizes
Recognizes
the
fair
value
of
the
consideration
received
the fair
value of
the
consideration
received
any
investment
retained
 Recognizes
Recognizes
any
investment
Recognizes the
the fair
fair value
value of
of the
anyconsideration
investment retained
retained
received
the
value
the
received
 Recognizes
any
investment
retained
fair
valueor
ofdeficit
anyconsideration
investment
retained
anyfair
surplus
orof
deficit
in the
the statement
statement
of profit
profit or
or loss
loss and
and other
other comprehensive
comprehensive income
income
 Recognizes
Recognizes the
any
surplus
in
of
income
the
fair
value
of
any
investment
retained
any
surplus
or
deficit
in
the
statement
of
profit
or
loss
and
other
comprehensive
the
fair
value
of
any
investment
retained
 Recognizes
Recognizes
any
surplus
or
deficit
in
the
statement
of
profit
or
loss
and
other
comprehensive
income
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any
surplus
or
deficit
in
the
statement
of
profit
or
loss
and
other
comprehensive
income
Reclassifies
the
parent’s
share
of
components
previously
recognized
in
OCI
to
profit
or
loss
or
retained
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the
parent’s
share
of
components
previously
recognized
in
OCI
to
profit
or
loss
or
retained
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any
surplus
or
deficit
in
the
statement
of
profit
or
loss
and
other
comprehensive
income
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parent’s
share
of
components
previously
recognized
in
OCI
to
profit
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retained
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or
deficit
in
the
statement
of
profit
or
loss
and
other
comprehensive
income
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the
parent’s
share
of
components
previously
recognized
in
OCI
to
profit
or
loss
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retained
as
appropriate,
as
would
be
required
if
the
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directly
disposed
of
the
related
assets
or
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the
parent’s
share
of
components
previously
recognized
in
OCI
to
profit
or
loss
or
retained
earnings,
as
appropriate,
as
would
be
required
if
the
Group
had
directly
disposed
of
the
related
assets
or
as
appropriate,
as
would
be
required
if
the
Group
had
directly
disposed
of
the
related
assets
or
 earnings,
Reclassifies
the
parent’s
share
of
components
previously
recognized
in
OCI
to
profit
or
loss
or
retained
earnings,
as
appropriate,
as
would
be
required
if
the
Group
had
directly
disposed
of
the
related
assets
or
liabilities.
Reclassifies
the
parent’s
share
of
components
previously
recognized
in
OCI
to
profit
or
loss
or
retained
earnings,
as
appropriate,
as
would
be
required
if
the
Group
had
directly
disposed
of
the
related
assets
or
liabilities.
liabilities.
earnings,
as
appropriate,
as
would
be
required
if
the
Group
had
directly
disposed
of
the
related
assets
liabilities.
earnings, as appropriate, as would be required if the Group had directly disposed of the related assets or
or
liabilities.
liabilities.
Business
combinations
and
goodwill
liabilities.
Business combinations
combinations and
and goodwill
goodwill
Business
Business
combinations
and
goodwill
Business
combinations
are
accounted
for using
using the
the acquisition
acquisition method.
method. The
The cost
cost of
of an
an acquisition
acquisition is
is measured
measured as
as the
the
Business
combinationsare
andaccounted
goodwill for
Business
combinations
Business
combinations
are
accounted
for
using the
acquisition method.
The
cost
of
an acquisition
is
measured as
the
Business
combinations
and
goodwill
Business
combinations
are
accounted
for
the
method.
The
cost
of
is
the
aggregate
of the
the consideration
consideration
transferred,
measured
at acquisition
acquisition
date
fair
value
and the
the amount
amount
of any
anyas
non
Business
are
for using
using
the acquisition
acquisition
method.date
The fair
cost value
of an
an acquisition
acquisition
is measured
measured
asnon
the
Business combinations
combinations
andaccounted
goodwill
aggregate
of
transferred,
measured
at
and
of
aggregate
of
the
consideration
transferred,
measured
at
acquisition
date
fair
value
and
the
amount
of
any
non
Business
combinations
are
accounted
for
using
the
acquisition
method.
The
cost
of
an
acquisition
is
measured
as
the
aggregate
of
the
consideration
transferred,
measured
at
acquisition
date
fair
value
and
the
amount
of
any
non
controlling
interest
in
the
acquiree.
For
each
business
combination,
the
acquirer
measures
the
non
controlling
interest
Business
combinations
are
accounted
for
using
the
acquisition
method.
The
cost
of
an
acquisition
is
measured
as
the
aggregate
of
the
consideration
transferred,
measured
at
acquisition
date
fair
value
and
the
amount
of
any
non
controlling
interest
in
the
acquiree.
For
each
business
combination,
the
acquirer
measures
the
non
controlling
interest
controlling
interest
in
the
acquiree.
For
each
business
combination,
the
acquirer
measures
the
non
controlling
interest
aggregate
of
the
consideration
transferred,
measured
at
acquisition
date
fair
value
and
the
amount
of
any
non
controlling
interest
in
the
acquiree.
For
each
business
combination,
the
acquirer
measures
the
non
controlling
interest
in
the
acquiree
either
at
fair
value
or
at
the
proportionate
share
of
the
acquiree’s
identifiable
net
assets.
Acquisition
aggregate
of
the
consideration
transferred,
measured
at
acquisition
date
fair
value
and
the
amount
of
any
non
controlling
interest
in
the
acquiree.
For
each
business
combination,
the
acquirer
measures
the
non
controlling
interest
in
the
acquiree
either
at
fair
value
or
at
the
proportionate
share
of
the
acquiree’s
identifiable
net
assets.
Acquisition
in
the
acquiree
either
at
fair
value
or
ateach
the
proportionate
share
of
the
acquiree’s
identifiable
net
assets.
Acquisition
controlling
interest
in
the
acquiree.
For
business
combination,
the
measures
the
controlling
interest
in
the
either
at
value
or
the
share
of
acquiree’s
identifiable
net
Acquisition
related
costs
incurred
expensed
in
general
and
expenses.
controlling
interest
in are
the
acquiree.
Forat
each
business
combination,
the acquirer
acquirer
measures
the non
non
controlling
interest
in
the acquiree
acquiree
either
at fair
fair
value and
or
atincluded
the proportionate
proportionate
shareadministrative
of the
the
acquiree’s
identifiable
net assets.
assets.
Acquisition
related
costs
incurred
are
expensed
and
included
in
general
and
administrative
expenses.
related
costs
incurred
are
expensed
and
included
in
general
and
administrative
expenses.
in
the
acquiree
either
at
fair
value
or
at
the
proportionate
share
of
the
acquiree’s
identifiable
net
assets.
Acquisition
related
costs
incurred
expensed
in
general
and
expenses.
in the acquiree
either are
at fair
value and
or atincluded
the proportionate
shareadministrative
of the acquiree’s
identifiable net assets. Acquisition
related
costs
incurred
are
expensed
and
included
in
general
and
administrative
expenses.
When
the
Group
acquires
aa business,
it
assesses
the
financial
assets
and
liabilities
assumed
for
appropriate
related
costs
incurred
are
and included
in
and
administrative
expenses.
When
the
acquires
it
assesses
the
financial
assets
and
liabilities
assumed
for
appropriate
When
the
Group
acquires
aa business,
business,
it
assesses
the
financial
assets
and
liabilities
assumed
for
appropriate
related
costsGroup
incurred
are expensed
expensed
included
in general
general
and
administrative
expenses.
When
the
Group
acquires
business,
it
assesses
the
financial
assets
liabilities
assumed
for
appropriate
classification
and designation
designation
in and
accordance
with
the
contractual
terms, and
economic
circumstances
and
pertinent
When
the
Group
acquires
a
business,
it
assesses
the
financial
assets
and
liabilities
assumed
for
appropriate
classification
and
in
accordance
with
the
contractual
terms,
economic
circumstances
and
pertinent
classification
and
designation
in
accordance
with
the
contractual
terms,
economic
circumstances
and
pertinent
When
the
Group
acquires
a
business,
it
assesses
the
financial
assets
and
liabilities
assumed
for
appropriate
classification
and
designation
in
accordance
with
the
contractual
terms,
economic
circumstances
and
pertinent
conditions
as
at
thedesignation
acquisition
date.
Thisitincludes
includes
the
separation
ofassets
embedded
derivatives
in host
host contracts
contracts
by the
the
classification
and
in
accordance
with
the
contractual
terms,
economic
circumstances
and
pertinent
When
the
Group
acquires
a
business,
assesses
the
financial
and
liabilities
assumed
for
appropriate
conditions
as
at
the
acquisition
date.
This
the
separation
of
embedded
derivatives
in
by
conditions
as
at
the
acquisition
date.
This
includes
the
separation
of
embedded
derivatives
in
host
contracts
by
the
classification
and
designation
in
accordance
with
the
contractual
terms,
economic
circumstances
and
pertinent
conditions
as
at
the
acquisition
date.
This
includes
the
separation
of
embedded
derivatives
in
host
contracts
by
the
acquiree.
classification
and
designation
in
accordance
with
the
contractual
terms,
economic
circumstances
and
pertinent
conditions
as
at
the
acquisition
date.
This
includes
the
separation
of
embedded
derivatives
in
host
contracts
by
the
acquiree.
acquiree.
conditions
as
at
the
acquisition
date.
This
includes
the
separation
of
embedded
derivatives
in
host
contracts
by
acquiree.
conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the
the
acquiree.
If
the
business
combination
is
achieved
in
stages,
the
acquisition
date
fair
value
of
the
acquirer’s
previously
held
acquiree.
If
the
business
combination
is
achieved
in
stages,
the
acquisition
date
fair
value
of
the
acquirer’s
previously
held
If
the
business
combination
is
achieved
in
stages,
the
acquisition
date
fair
value
of
the
acquirer’s
previously
held
acquiree.
If
the business
business
combination
is achieved
achieved
in stages,
stages,
the acquisition
acquisition
date
fair value
valuedate
of the
the
acquirer’s
previously
held
equity
interest
in
the
acquiree
is
remeasured
to
fair
value
at
the
acquisition
through
consolidated
income
If
the
combination
is
in
the
date
fair
of
acquirer’s
previously
held
equity
interest
in
the
acquiree
is
remeasured
to
fair
value
at
the
acquisition
date
through
consolidated
income
equity
interest
in
the
acquiree
is
remeasured
to
fair
value
at
the
acquisition
date
through
consolidated
income
If
the
business
combination
is
achieved
in
stages,
the
acquisition
date
fair
value
of
the
acquirer’s
previously
held
equity
interest
in
the
acquiree
is
remeasured
to
fair
value
at
the
acquisition
date
through
consolidated
income
statement.
If
the
business
combination
is
achieved
in
stages,
the
acquisition
date
fair
value
of
the
acquirer’s
previously
held
equity
interest
in
the
acquiree
is
remeasured
to
fair
value
at
the
acquisition
date
through
consolidated
income
statement.
statement.
equity
interest
in
the
acquiree
is
remeasured
to
fair
value
at
the
acquisition
date
through
consolidated
income
statement.
equity
interest
in
the
acquiree
is
remeasured
to
fair
value
at
the
acquisition
date
through
consolidated
income
statement.
Any
contingent
consideration
to
be
transferred
by
the
acquirer
will
be
recognised
at
fair
value
at
the
acquisition
date.
statement.
Any
contingent
consideration
to
be
transferred
by
the
acquirer
will
be
recognised
at
fair
value
at
the
acquisition
date.
Any
contingent
consideration
to
be
transferred
by
the
acquirer
will
be
recognised
at
fair
value
at
the
acquisition
date.
statement.
Any
contingent
consideration
to
be
transferred
by
the
acquirer
will
be
recognised
at
fair
value
at
the
acquisition
date.
Subsequent
changes
to
the
fair
value
of
the
contingent
consideration
which
is
deemed
to
be
an
asset
or
liability
will
be
Any
contingent
consideration
to
be
transferred
by
the
acquirer
will
be
recognised
at
fair
value
at
the
acquisition
date.
Subsequent
changes
to
the
fair
value
of
the
contingent
consideration
which
is
deemed
to
be
an
asset
or
liability
will
be
Subsequent
changes
to
the
fair
value
of
the
contingent
consideration
which
is
deemed
to
be
an
asset
or
liability
will
be
Any
contingent
consideration
to
be
transferred
by
the
acquirer
will
be
recognised
at
fair
value
at
the
acquisition
date.
Subsequent
changes
to
the
fair
value
of
the
contingent
consideration
which
is
deemed
to
be
an
asset
or
liability
will
be
recognised
in
accordance
with
IAS
39
either
in
consolidated
income
statement
or
as
a
change
to
other
comprehensive
Any
contingent
consideration
to
be
transferred
by
the
acquirer
will
be
recognised
at
fair
value
at
the
acquisition
date.
Subsequent
changes
to
the
fair
value
of
the
contingent
consideration
which
is
deemed
to
be
an
asset
or
liability
will
be
recognised in
in accordance
accordance with
with IAS
IAS 39
39 either
either in
in consolidated
consolidated income
income statement
statement or
or as
as aa change
change to
to other
other comprehensive
comprehensive
recognised
Subsequent
changes
to
the
fair
value
of
the
contingent
consideration
which
is
deemed
to
be
an
asset
or
liability
will
be
recognised
in
accordance
with
IAS
39
either
in
consolidated
income
statement
or
as
a
change
to
other
comprehensive
income.
If the
the
contingent
consideration
is classified
classified
asconsideration
equity,
it should
should
not
beorre-measured
re-measured
until
itoris
isliability
finally will
settled
recognised
inchanges
accordance
in consolidated
income
statement
as atochange
to
other
comprehensive
Subsequent
to thewith
fair IAS
value39ofeither
the
contingent
which
is deemed
be an until
asset
be
income.
If
contingent
consideration
is
as
equity,
it
not
be
it
finally
settled
income.
If
the
contingent
consideration
is
classified
as
equity,
it
should
not
be
re-measured
until
it
is
finally
settled
recognised
in
accordance
with
IAS
39
either
in
consolidated
income
statement
or
as
a
change
to
other
comprehensive
income.
If
the
contingent
consideration
is
classified
as
equity,
it
should
not
be
re-measured
until
it
is
finally
settled
within
equity.
In
instanceswith
where
the39contingent
contingent
consideration
does
not
fall
within
thea scope
scope
ofuntil
IAS
39,
itfinally
is measured
measured
recognised
in accordance
IASthe
either
in consolidated
income
statement
as
changeof
toIAS
other
income.
If the
contingent
consideration
is classified
as equity,
it should
notwithin
beorre-measured
it39,
iscomprehensive
settled
within
equity.
In
instances
where
consideration
does
not
fall
the
it
is
within
equity.
In
instances
where
the
contingent
consideration
does
not
fall
within
the
scope of
IAS
itfinally
is
measured
income.
If
contingent
consideration
is
as
it
not
be
until
it39,
is
settled
within
equity.
In
instances
where
contingent
consideration
not
the
IAS
is
in
accordance
the
appropriate
IFRS.
income.
If the
thewith
contingent
consideration
is classified
classified
as equity,
equity,does
it should
should
notwithin
be re-measured
re-measured
is it
settled
within
equity.
In
instances
where the
the
contingent
consideration
does
not fall
fall
within
the scope
scope of
ofuntil
IASit39,
39,
itfinally
is measured
measured
in
accordance
with
the
appropriate
IFRS.
in
accordance
with
the
appropriate
IFRS.
within
equity.
In
instances
where
the
contingent
consideration
does
not
fall
within
the
scope
of
IAS
39,
it
is
measured
in
accordance
with
the
appropriate
IFRS.
within
equity. with
In instances
where the
contingent consideration does not fall within the scope of IAS 39, it is measured
in
accordance
the
appropriate
IFRS.
Goodwill
is
initially
measured
at
cost
being
the excess
of the
aggregate of
the consideration
transferred and
the amount
in
accordance
with
appropriate
IFRS.
Goodwill
is
measured
at
being
Goodwill
is initially
initially
measured
at cost
cost
being the
the excess
excess of
of the
the aggregate
aggregate of
of the
the consideration
consideration transferred
transferred and
and the
the amount
amount
in
accordance
with the
the
appropriate
IFRS.
Goodwill
is
initially
measured
at
cost
being
the
excess
of
the
aggregate
of
the
consideration
transferred
and
the
recognised
for
non
controlling
interest
over
the
net
identifiable
assets
acquired
and
liabilities
assumed.
If
Goodwill
is
initially
measured
at
cost
being
the
excess
of
the
aggregate
of
the
consideration
transferred
and
the amount
amount
recognised for
for non
non controlling
controlling interest
interest over
over the
the net
net identifiable
identifiable assets
assets acquired
acquired and
and liabilities
liabilities assumed.
assumed.
If this
this
recognised
If
this
Goodwill
is
initially
measured
at
cost
being
the net
excess
of
the
aggregate
of
the
consideration
transferred
and
the
amount
recognised
for
non
controlling
interest
over
the
net
identifiable
assets
acquired
and
liabilities
assumed.
consideration
is
lower
than
the
fair
value
of
the
assets
of
the
subsidiary
acquired,
the
difference
is
recognised
the
Goodwill
is
initially
measured
at
cost
being
excess
of
the
aggregate
of
the
consideration
transferred
and
the
amount
recognised
for
non
controlling
interest
over
the
net
identifiable
assets
acquired
and
liabilities
assumed.
Ifin
this
consideration is
is lower
lower than
than the
the fair
fair value
value of
of the
the net
net assets
assets of
of the
the subsidiary
subsidiary acquired,
acquired, the
the difference
difference is
is recognised
recognisedIf
in this
the
consideration
in
the
recognised
non
controlling
interest
over
the
net
assets
acquired
and
liabilities
assumed.
If this
consideration
is
lower
than
value
the
of
recognised
the
consolidated
income
statement.
recognised for
for
controlling
the assets
net identifiable
identifiable
assetsacquired,
acquired the
anddifference
liabilitiesis
consideration
is non
lowerstatement.
than the
the fair
fairinterest
value of
ofover
the net
net
assets
of the
the subsidiary
subsidiary
acquired,
the
difference
is assumed.
recognisedIfin
in this
the
consolidated
income
consolidated
income
statement.
consideration
is
lower
than
the
fair
value
of
the
net
assets
of
the
subsidiary
acquired,
the
difference
is
recognised
in
consolidated
income
statement.
considerationincome
is lowerstatement.
than the fair value of the net assets of the subsidiary acquired, the difference is recognised in the
the
consolidated
After
initial recognition,
recognition,
goodwill is
is measured
measured at
at cost
cost less
less any
any accumulated
accumulated impairment
impairment losses.
losses. For
For the
the purpose
purpose of
of
consolidated
income
statement.
After
initial
goodwill
consolidated
income
statement.
After
initial
recognition,
goodwill
is
measured
at
cost
less
any
accumulated
impairment
losses.
For
the
purpose
of
After
initial
recognition,
goodwill
is
measured
at
cost
less
any
accumulated
impairment
losses.
For
the
purpose
of
impairment
testing,
goodwill
acquired
in
aa business
combination
is,
from
the
acquisition
date,
allocated
to
each
of
the
After
initial
recognition,
goodwill
is
measured
at
cost
less
any
accumulated
impairment
losses.
For
the
purpose
of
impairment
testing,
goodwill
acquired
in
business
combination
is,
from
the
acquisition
date,
allocated
to
each
of
the
impairment
testing,
goodwill
acquired
in
a
business
combination
is,
from
the
acquisition
date,
allocated
to
each
of
the
After
initial
recognition,
goodwill
is
measured
at
cost
less
any
accumulated
impairment
losses.
For
the
purpose
of
impairment
testing,
goodwill
acquired
in
a
business
combination
is,
from
the
acquisition
date,
allocated
to
each
of
the
Group’s
cash-generating
units
that
are
expected
to
benefit
from
the
combination,
irrespective
of
whether
other
assets
After
initial
recognition,
goodwill
is
measured
at
cost
less
any
accumulated
impairment
losses.
For
the
purpose
of
impairment
testing,
goodwill
acquired
in
a
business
combination
is,
from
the
acquisition
date,
allocated
to
each
of
the
Group’s
cash-generating
units
that
are
expected
to
benefit
from
the
combination,
irrespective
of
whether
other
assets
Group’s
cash-generating
units
that
are
expected
to
benefit
from
the
combination,
irrespective
of
whether
other
assets
impairment
testing,
goodwill
acquired
in
a
business
combination
is,
from
the
acquisition
date,
allocated
to
each
of
the
Group’s
cash-generating
units
that
are
expected
to
benefit
from
the
combination,
irrespective
of
whether
other
assets
or
liabilities
of
the
acquiree
are
assigned
to
those
units.
impairment
testing,
goodwill
acquired
in
a
business
combination
is,
from
the
acquisition
date,
allocated
to
each
of
the
Group’s
cash-generating
units
that
are
expected
to
benefit
from
the
combination,
irrespective
of
whether
other
assets
or
liabilities
of
the
acquiree
are
assigned
to
those
units.
or
liabilities
of
the acquiree
are
assigned
to
those to
units.
Group’s
cash-generating
units
that
are
benefit
or
liabilities
of
are
assigned
to
units.
Group’s
cash-generating
units
are expected
expected
benefit from
from the
the combination,
combination, irrespective
irrespective of
of whether
whether other
other assets
assets
or
liabilities
of the
the acquiree
acquiree
arethat
assigned
to those
those to
units.
Where
goodwill
forms
part
of
a
cash-generating
unit
and
part
of
the
operation
within
that
unit
is
disposed
of,
the
or
liabilities
of
the
acquiree
are
assigned
to
those
units.
Where
goodwill
forms
part
of
aa cash-generating
unit
and
part
of
the
operation
within
that
unit
is
disposed
of,
the
or
liabilities
of
the
acquiree
are
assigned
to
those
units.
Where
goodwill
forms
part
of
cash-generating
unit
and
part
of
the
operation
within
that
unit
is
disposed
of,
the
Where
goodwill
forms
part
of
a
cash-generating
unit
and
part
of
the
operation
within
that
unit
is
disposed
of,
the
goodwill
associated
with
the
operation
disposed
of
is
included
in
the
carrying
amount
of
the
operation
when
Where
goodwill
forms
part
of
a
cash-generating
unit
and
part
of
the
operation
within
that
unit
is
disposed
of,
the
goodwill
associated
with
the
operation
disposed
of
is
included
in
the
carrying
amount
of
the
operation
when
goodwill
associated
with
the
operation
disposed
of
is
included
in
the
carrying
amount
of
the
operation
when
Where
goodwill
forms
part
of
a
cash-generating
unit
and
part
of
the
operation
within
that
unit
is
disposed
of,
the
Kuwait
Foreign
Petroleum
Exploration
Company
K.S.C.
(Closed)
and
Subsidiaries
goodwill
associated
with
the
operation
disposed
of
is
included
in
the
carrying
amount
of
the
operation
when
determining
the
gain
or
loss
on
disposal
of
the
operation.
Goodwill
disposed
of
in
this
circumstance
is
measured
based
Where
goodwill
forms
part
of
a
cash-generating
unit
and
part
of
the
operation
within
that
unit
is
disposed
of,
the
goodwill
associated
with
the
operation
disposed
of
is
included
in
the
carrying
amount
of
the
operation
when
determining
the
gain
or
loss
on
disposal
of
the
operation.
Goodwill
disposed
of
in
this
circumstance
is
measured
based
determining
the
gain
or
loss
on
disposal
of
the
operation.
Goodwill
disposed
of
in
this
circumstance
is
measured
based
goodwill
associated
with
the
operation
disposed
of
is
included
in
the
carrying
amount
of
the
operation
when
determining
the
gain
or
loss
on
disposal
of
the
operation.
Goodwill
disposed
of
in
this
circumstance
is
measured
based
on the
the relative
relative
values
ofCONSOLIDATED
thethe
operation
disposed
ofFINANCIAL
and
the
portion
ofSTATEMENTS
the
cash-generating
unit retained.
retained.
NOTES
TO
THE
goodwill
associated
with
operation
disposed
of
is
included
in
the
carrying
amount
of
the
operation
when
determining
the
gain
or
loss
on
disposal
of
the
operation.
Goodwill
disposed
of
in
this
circumstance
is
measured
based
on
values
of
the
operation
disposed
of
and
the
portion
of
the
cash-generating
unit
on
the
relative
values
of
the
operation
disposed
of
and the
portion
ofdisposed
the
cash-generating
unit
retained.
determining
the
gain
or
loss
on
of
Goodwill
of
is
on
the
relative
of
the
disposed
of
portion
the
unit
determining
thevalues
gain
or
on disposal
disposal
of the
the operation.
operation.
of in
in this
this circumstance
circumstance
is measured
measured based
based
on
the
relative
values
of loss
the operation
operation
disposed
of and
and the
the Goodwill
portion of
ofdisposed
the cash-generating
cash-generating
unit retained.
retained.
At
31 December
2013
Interest
in
joint
arrangements
on
the
relative
values
of
the
operation
disposed
of
and
the
portion
of
the
cash-generating
unit
retained.
Interest
in
joint
arrangements
Interest
in joint
arrangements
on the relative
values
of the operation disposed of and the portion of the cash-generating unit retained.
Interest
in
arrangements
Interest
in joint
joint
arrangements
IFRS
defines
aa joint
arrangement
as
an
arrangement
over
which
two
or
more
parties
have
joint
control.
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control
is
IFRS
defines
arrangement
as
an
arrangement
over
which
two
or
more
parties
have
joint
control.
Joint
control
is
IFRS
defines
aa joint
joint
arrangement
as
an
arrangement
over
which
two
or
more
parties
have
joint
control.
Joint
control
is
Interest
in
joint
arrangements
2
SIGNIFICANT
ACCOUNTING
POLICIES
(continued)
IFRS
defines
joint
arrangement
as
an
arrangement
over
which
two
or
more
parties
have
joint
control.
Joint
control
is
Interest
in
joint
arrangements
the
contractually
agreed
sharing
of
control
of
an
arrangement,
which
exists
only
when
decisions
about
the
relevant
IFRS
defines
a
joint
arrangement
as
an
arrangement
over
which
two
or
more
parties
have
joint
control.
Joint
control
is
the
contractually
agreed
sharing
of
control
of
an
arrangement,
which
exists
only
when
decisions
about
the
relevant
the
contractually
agreed
sharing
of
control
of
an
arrangement,
which
exists
only
when
decisions
about
the
relevant
IFRS
defines
a
joint
arrangement
as
an
arrangement
over
which
two
or
more
parties
have
joint
control.
Joint
control
is
the
contractually
agreed
sharing
of
control
of
an
arrangement,
which
exists
only
when
decisions
about
the
relevant
activities
(being
those
that
significantly
affect
the
returns
of
the
arrangement)
require
unanimous
consent
of
the
parties
IFRS
defines
a
joint
arrangement
as
an
arrangement
over
which
two
or
more
parties
have
joint
control.
Joint
control
is
the
contractually
agreed
sharing
of
control
of
an
arrangement,
which
exists
only
when
decisions
about
the
relevant
activities
(being
that
significantly
affect
the
returns
of
the
arrangement)
require
unanimous
consent
of
the
parties
Interest
in
jointthose
arrangements
(continued)
activities
(being
those
that
significantly
affect
the
returns
of
the
arrangement)
require
unanimous
consent
of
the
parties
the
contractually
agreed
sharing
of
control
of
an
arrangement,
which
exists
only
when
decisions
about
the
relevant
activities
(being
those
that
significantly
affect
the
returns
of
the
arrangement)
require
unanimous
consent
of
the
parties
sharing
control.
the
contractually
agreed
sharing
of
control
of
an
arrangement,
which
exists
only
when
decisions
about
the
relevant
activities
(being
those
that
significantly
affect
the
returns
of
the
arrangement)
require
unanimous
consent
of
the
parties
sharing
control.
sharing
control.
activities
(being
sharing
activitiescontrol.
(being those
those that
that significantly
significantly affect
affect the
the returns
returns of
of the
the arrangement)
arrangement) require
require unanimous
unanimous consent
consent of
of the
the parties
parties
sharing
control.
Joint Operations
sharing
control.
sharing control.
A joint operation is a type of joint arrangement whereby the parties that have joint control of the arrangement have
rights to the assets and obligations for the liabilities, relating to the arrangement. In relation to its interests in joint
11
11
operations, the Group recognizes its:
11
11
11
 Assets, including its share of any assets held jointly
11
11
 Liabilities, including its share of any liabilities incurred jointly
 Revenue from the sale of its share of the output arising from the joint operation
38
At
31 December
2013CONSOLIDATED
2Interest
SIGNIFICANT
ACCOUNTING
(continued)
NOTES
TO
FINANCIAL
STATEMENTS
in
jointTHE
arrangements
(continued)POLICIES
2Interest
SIGNIFICANT
ACCOUNTING
(continued)
At
31
December
2013
NOTES
TO
THE
CONSOLIDATED
FINANCIAL
STATEMENTS
in
joint
arrangements
(continued)POLICIES
At
31
December
2013
in
joint arrangements
(continued)POLICIES (continued)
2Interest
SIGNIFICANT
ACCOUNTING
At
31
December
2013
Interest
in
joint
arrangements
(continued)
2
SIGNIFICANT ACCOUNTING POLICIES (continued)
39
Interest
in
joint arrangements
(continued)
Joint
Operations
2
SIGNIFICANT
ACCOUNTING
POLICIES
(continued)
Kuwait
Foreign Petroleum
Exploration Company K.S.C. (Closed) And Subsidiaries
Joint
Operations
2Interest
SIGNIFICANT
ACCOUNTING
POLICIES
(continued)
in
joint arrangements
(continued)
Joint
Operations
A
joint
operation
is
a
type
of
joint
arrangement
whereby
the parties that have joint control of the arrangement have
2
SIGNIFICANT
ACCOUNTING
POLICIES
(continued)
Interest
in
joint
arrangements
(continued)
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Operations
A
joint
operation
is a Petroleum
type of joint arrangement
whereby
the partiesK.S.C.
that have (Closed)
joint controland
of the
arrangement have
Kuwait
Foreign
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Company
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joint
isand
a Petroleum
type
of joint
arrangement
whereby
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rights
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the
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itsarrangement
interests in have
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Interest
in
joint
arrangements
(continued)
NOTES
TO
THE
CONSOLIDATED
FINANCIAL
STATEMENTS
Interest
in
joint
arrangements
(continued)
rights
to
the
assets
and
obligations
for
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relating
to
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relation
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interests in have
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its:
NOTES
TO
THE
CONSOLIDATED
FINANCIAL
STATEMENTS
A
joint
operation
is
a
type
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arrangement
whereby
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parties
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control
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have
Interest
in
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arrangements
(continued)
NOTES
TO
THE
CONSOLIDATED
FINANCIAL
STATEMENTS
At
31Operations
December
2013
Joint
operations,
the
Group
recognizes
its:for the liabilities, relating to the arrangement. In relation to its interests in joint
rights
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the
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and
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whereby
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recognizes
its:
At
31
December
2013
rights
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theassets
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interests in have
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31
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its:
2
SIGNIFICANT
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(continued)
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2
SIGNIFICANT
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(continued)
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from
the
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of
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share
of
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operation
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the
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recognizes
its:
rights
the assets
and
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arrangement.
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joint
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including
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its
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Group
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its:
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its
of
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from
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Interest
joint
arrangements
(continued)
 in
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of
the
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theshare
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of liabilities
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by the joint
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share
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(continued)
operations,
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its
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output
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party
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have
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of,
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shall
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its interest inhave
the

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of
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operation
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of
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joint
operation
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type
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whereby
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parties
thatoperation
haveoperation
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of the
the
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does
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control
of,
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shall
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the

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of
the
output
by
the
joint
operation
A
party
that
participates
in,
but
does
not
have
joint
control
of,
a
joint
operation
shall
account
for
its
interest
in
the
arrangement
as
if
it
were
a
joint
operation,
if
that
party
has
rights
to
the
assets,
and
obligations
for
the
liabilities,
rights
to
the
assets
and
obligations
for
the
liabilities,
relating
to
the
arrangement.
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relation
to
its
interests
in
joint
Expenses,
including
its
share
of
any
expenses
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
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of
the
revenue
from
the
sale
of
the
output
by
the
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operation
rights
to
the
assets
and
obligations
for
the
liabilities,
relating
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12
arrangement is a joint operation or a joint venture, may12
materially impact the accounting and related disclosures in the
12
consolidated financial statements.
12
12
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An associate is an entity over which the Group has significant influence. Significant influence is the power to
participate in the financial and operating policy decisions of the investee, but is not control or joint control over those
policies.
12
12
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NOTES
TO
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CONSOLIDATED
FINANCIAL
STATEMENTS
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NOTES
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any
changes,
when
applicable,
thein the
financial
assets
available
for
sale,
assets
held
toproceeds
maturity,
loans
and
or as
derivatives
Financial
assets
within
scope
ofassociate,
IAS
39
areappropriate.
classified
as
financial
assets
atrecognised
fair
value
through
profit
orinloss,
control
and
value
ofan
the
retained
investment
and
from
disposal
isof
as
profit
orof
loss.
as
hedging
instruments
effective
hedge,
as
The
Group
determines
thechanges,
classification
itsdesignated
financial
financial
assets
available
for
sale,
financial
assets
held
toproceeds
maturity,
loans
and
receivables,
orfrom
as
derivatives
designated
Financial
assets
within
the
scope
ofinIAS
39
are
classified
as
financial
assets
fair
value
profit
or
loss,
control
and
the
fair
valuein
ofan
the
retained
investment
and
from
disposal
isatrecognised
asthrough
profit
orof
loss.
as
hedging
instruments
in
effective
hedge,
as
appropriate.
The
Group
determines
the
classification
its
financial
consolidated
statement
of
changes
in
equity.
Unrealised
gains
and
losses
resulting
transactions
between
consolidated
statement
of
changes
equity.
Unrealised
gains
and
losses
resulting
from
transactions
between
the the
as
hedging
instruments
in
an
effective
hedge,
as
appropriate.
The
Group
determines
the
classification
of
its
financial
financial
assets
available
for
sale,
financial
assets
held
to
maturity,
loans
and
receivables,
or
as
derivatives
designated
assets
at initial
recognition.
as
hedging
instruments
in
ansale,
effective
hedge,
as appropriate.
Group
determines
the any
classification
of itsdesignated
financial
financial
assets
available
for
financial
assets
held
toof
maturity,
loans
and
receivables,
or as
derivatives
Upon
loss
of
significant
influence
over to
thethe
associate,
Group
measures
and
recognises
retained
investment
at its
assets
at
initial
recognition.
Group
and
the associate
are
eliminated
toextent
the
extent
theThe
interest
the
associate.
Group
and
the
associate
are
ofthe
the
interest
inGroup
theinassociate.
assets
at
initial
recognition.
as
hedging
instruments
in
aneliminated
effective
hedge,
as appropriate.
The
determines
the classification of its financial
assets
at initial
recognition.
as
instruments
in an
effective
as appropriate.
Theassociate
Group determines
classification
of its financial
fairhedging
value.
Any
difference
between
thehedge,
carrying
amount of the
upon loss the
of significant
influence
or joint
assets
at initialassets
recognition.
All
financial
are recognised
initially
at fair value
plus transaction
costs,isexcept
in theascase
of or
financial
assets
assets
at
initial
recognition.
control
and
the
fair
value
of
the
retained
investment
and
proceeds
from
disposal
recognised
profit
loss.
All
financial
assets
are
recognised
initially
at
fair
value
plus
transaction
costs,
except
in
the
case
of
financial
assets
The at
aggregate
the
Group’s
of at
profit
or
loss
ofassociate
antransaction
associate
is
shown
onface
the
face
ofconsolidated
the
income
The financial
aggregate
of
theof
Group’s
shareshare
of loss.
profit
orfair
loss
of
anplus
is shown
onexcept
the
the
All
assets
are
recognised
initially
value
costs,
in of
the
case
of consolidated
financialincome
assets
recorded
fair
value
through
profit
or
All
financial
assets
are
recognised
initially
at
fair
value
plus
transaction
costs,
except
in
the
case
of
financial
assets
recorded
at
fair
value
through
profit
or
loss.
13
statement
outside
operating
profit
and
represents
profit
or
loss
after
tax
and
non-controlling
interests
in
the
subsidiaries
statement
operating
profit
and
profit
or
loss
after
tax
and
non-controlling
interests
in
the
subsidiaries
recorded
atoutside
fair
value
through
profit
orrepresents
loss. at fair
All
financial
assets
are
recognised
initially
value
plus
transaction
costs,
except
in
the
case
of
financial
assets
13 plus transaction costs, except in the case of financial assets
recorded
at associate.
fair
valueare
through
profit initially
or loss. at fair value
All
financial
assets
recognised
ofassociate.
the
of the
recorded
at way
fair value
through
All
regular
purchases
andprofit
salesor
ofloss.
financial assets13
are recognised on the settlement date, i.e. the date the asset is
13
recorded
at
fair
value
through
profit
or
loss.
All
way
and
sales
of
assets
are
on
date, i.e.
the date
asset
is
All regular
regular
wayorpurchases
purchases
and
sales
of financial
financialChanges
assets13
areinrecognised
recognised
on the
the settlement
settlement
date the
thedate
assetare
is
received
from
delivered
to
the
counterparty.
fair value between
the trade date,
date i.e.
andthe
settlement
13
All regular
wayorpurchases
and
sales
ofassociate
financialisChanges
assets
areinrecognised
on reporting
the settlement
date,
i.e.
the
dateWhen
thedate
asset
is
received
from
delivered
to
the
counterparty.
fair
value
between
the
trade
date
and
settlement
are
The
financial
statements
of
the
prepared
for
the
same
period
as
the
Group.
necessary,
The
financial
statements
of
the
associate
is
prepared
for
the
same
reporting
period
as
the
Group.
When
necessary,
13
received
from
or
delivered
to
the
counterparty.
Changes
in
fair
value
between
the
trade
date
and
settlement
date
are
All
regular
way
purchases
and
sales
of
financial
assets
are
recognised
on
the
settlement
date,
i.e.
the
date
the
asset
is
recognised
in
the
consolidated
income
statement
or
in
consolidated
statement
of
comprehensive
income
through
13
received
from
or
delivered
to
the
counterparty.
Changes
in
fair
value
between
the
trade
date
and
settlement
date
are
All
regular
way
purchases
and
sales
of
financial
assets
are
recognised
on
the
settlement
date,
i.e.
the
date
the
asset
is
recognised
in
the
consolidated
income
statement
or
in
consolidated
statement
of
comprehensive
income
through
adjustments
are
made
to
bring
the
accounting
policies
inpolicy
linevalue
with
those
the
Group.
adjustments
areor
made
tofair
bring
theincome
accounting
policies
line
with
those
of
theofGroup.
recognised
in
the
consolidated
statement
orininthe
consolidated
statement
of
comprehensive
income
through
received
from
delivered
to
counterparty.
Changes
in
fair
between
the
trade
dateinstrument.
and settlement
date
are
cumulative
changes
in
values
in
accordance
with
applicable
to
the
related
Regular
way
recognised
in
thedelivered
consolidated
statement
or inthe
consolidated
statement
oftrade
comprehensive
income
through
received from
or
to
theincome
counterparty.
Changes
in
fair value
between
the
dateinstrument.
and settlement
date
are
cumulative
changes
in
fair
values
in
accordance
with
policy
applicable
to
the
related
Regular
way
cumulative
changes
in fair
values
accordance
with
policy
to the
way
recognised
the consolidated
income
statement
or inthe
consolidated
statement
of related
comprehensive
purchases
orin
sales
are
purchases
orin
sales
of financial
assets
thatapplicable
require
delivery
of
assetsinstrument.
within income
theRegular
timethrough
frame
cumulative
changes
inoffair
inmethod,
accordance
with
the
policy
applicable
the
way loss
recognised
in
the consolidated
income
statement
or indetermines
consolidated
statement
of related
comprehensive
income
through
purchases
or
sales
purchases
or
sales
financial
assets
that
require
delivery
of
within
the
time
frame
application
thevalues
equity
the
Group
whether
it to
is necessary
toinstrument.
recognise
anRegular
impairment
AfterAfter
application
the
equity
method,
the of
Group
determines
whether
it is necessary
to assets
recognise
an impairment
loss
purchases
or
salesofare
are
purchases
orin
sales
of
financial
assets
that
require
delivery
of
assets
within
the
time
frame
cumulative
changes
in
fair
values
accordance
with
the
policy
applicable
to
the related
instrument.
Regular
way
generally
established
by
regulations
or
conventions
in
the
market
place.
purchases
or
sales
are
purchases
or
sales
of
financial
assets
that
require
delivery
of
assets
within
the
time
frame
13
cumulative
changes
in
fair
values
in
accordance
with
the
policy
applicable
to
the
related
instrument.
Regular
way that
generally
established
by
regulations
or
conventions
in
the
market
place.
itsestablished
investment
in
its associate.
At
each
the
Group
determines
whether
there
is objective
on itson
investment
itsby
associate.
Atoror
each
reporting
date,
the
Group
determines
whether
is within
objective
that
generally
regulations
conventions
in thedate,
market
place.
purchases
or
salesin are
purchases
sales
of reporting
financial
assets
that
require
delivery
of there
assets
theevidence
timeevidence
frame
generally
established
bythe
regulations
orsales
conventions
in theis
market
place.
purchases
or sales
purchases
oris
ofthere
financial
assets
that
require
delivery
of assets
within
time
frame
the investment
inassociate
associate
impaired.
If there
such
evidence,
theUltimate
Group
calculates
the
amount
of
impairment
the investment
in theare
is impaired.
If
is
such
evidence,
the Group
calculates
theCompany,
amount
ofthe
impairment
as as
generally
established
by
regulations
orcash
conventions
in
the market
place.
The
Group’s
financial
assets
include
and
bank
balances,
funds
held
by
Parent
trade
and
other
generally
established
by
regulations
or
conventions
in
the
market
place.
The
Group’s
financial
assets
include
cash
and
bank
balances,
funds
held
by
Ultimate
Parent
Company,
trade
and
other
the
difference
between
the
recoverable
amount
of
the
associate
and
its
carrying
value,
then
recognises
the
loss as
the difference
betweenassets
the recoverable
of balances,
the associate
recognises
as
The
Group’s financial
include cashamount
and bank
fundsand
helditsbycarrying
Ultimatevalue,
Parentthen
Company,
tradethe
andloss
other
receivables.
The
Group’s
financial
assets include
cashconsolidated
and bank balances,
funds held by Ultimate Parent Company, trade and other
receivables.
‘impairment
of
investments’
in
the
income
statement.
‘impairment
investments’
the consolidated
income
statement.
receivables.
The
Group’s of
financial
assets in
include
cash and bank
balances,
funds held by Ultimate Parent Company, trade and other
receivables.
The
Group’s financial assets include cash and bank balances, funds held by Ultimate Parent Company, trade and other
receivables.
Subsequent
measurement
receivables.
Subsequent
measurement
Upon
loss
of
significant
influence
over
the associate,
Group
measures
and
recognises
any retained
investment
Uponsubsequent
loss of
significant
influence
over the
associate,
the Group
measures
and recognises
any retained
investment
at its at its
Subsequent
measurement
The
measurement
of financial
assets
depends
onthe
their
classification
as follows:
Subsequent
measurement
The
subsequent
measurement
of
assets
depends
on
as
follows:
fair value.
Any
difference
between
the
carrying
amount
the associate
losssignificant
of significant
influence
or joint
fair value.
Any
difference
between
the carrying
amount
theofclassification
associate
upon
loss
of
influence
or joint
The
subsequent
measurement
of financial
financial
assets
depends
onoftheir
their
classification
asupon
follows:
Subsequent
measurement
The subsequent
measurement
of
financial
assets
depends on
classification
as follows:
Subsequent
measurement
control
andfair
thevalue
fair value
ofretained
the retained
investment
andtheir
proceeds
disposal
is recognised
as profit
or loss.
control
andreceivables
the
of the
investment
and proceeds
from from
disposal
is follows:
recognised
as profit
or loss.
The
subsequent
measurement
of
financial
assets
depends
on
their
classification
as
Loans
and
The subsequent
measurement of financial assets depends on their classification as follows:
Loans
and
receivables
Loans and
and receivables
receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an
Loans
Loans
and receivables
receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an
Loans
and
Loans
are non-derivative
assets assets
with fixed
or determinable
payments
that are notcost
quoted
an
Loans
and receivables
receivables
active and
market.
After initial
measurement,financial
such financial
are subsequently
measured
at amortised
usingin
Loans
and
are non-derivative
financial
assets assets
with fixed
or determinable
payments
that are notcost
quoted
inthe
an
Loans
and receivables
receivables
active
market.
After
initial
measurement,
such
are
measured
at
amortised
using
active and
market.
After
initial
measurement,Amortised
such financial
financial
assets
are subsequently
subsequently
measured
atany
amortised
using
the
Loans
receivables
are
non-derivative
financial
assets
with
fixed
orby
determinable
payments
thatdiscount
are notcost
quoted
inthe
an
effective
interest
rate,
less
impairment.
cost
is
calculated
taking
into
account
or
premium
active
market.
After
initial
measurement,
such
financial
assets
are
subsequently
measured
at
amortised
cost
using
the
Loans
and
receivables
are
non-derivative
financial
assets
with
fixed
or
determinable
payments
that
are
not
quoted
in
an
effective
interest
rate,
less
Amortised
cost
is
calculated
by
into
account
any
discount
or
premium
effective
interest
rate,
lessorimpairment.
impairment.
Amortised
cost part
isassets
calculated
by taking
taking
into
account
any
discount
or using
premium
active
market.
After
initial
measurement,
such
financial
are
subsequently
measured
at
amortised
cost
the
on
acquisition
and
fees
costs
that
are
an
integral
of
the
effective
interest
rate.
The
effective
interest
rate
effective
interest
rate,
lessorimpairment.
Amortised
cost part
isassets
calculated
by taking
into
account
any
discount
or using
premium
active
market.
After
initial
measurement,
such
financial
are
subsequently
measured
at
amortised
cost
the
on
acquisition
and
fees
costs
that
are
an
integral
of
the
effective
interest
rate.
The
effective
interest
rate
on
acquisition
fees
orimpairment.
costs
that are
anincome
integral
part
of the
interest
rate.
The
interest
rate
effective
interest
rate,
less
Amortised
cost
is calculated
by taking
intofrom
account
anyeffective
discount
or premium
amortisation
is and
included
in
the
consolidated
statement.
Theeffective
losses
arising
impairment
are recognised
in
on
acquisition
and
fees
orimpairment.
costs
that are
anincome
integral
part
of the
effective
interest
rate.
The
interest
rate
effective
interest
rate,
less
Amortised
cost
is calculated
by taking
intofrom
account
anyeffective
discount
or premium
amortisation
is
included
in
the
consolidated
statement.
The
losses
arising
impairment
are
recognised
in
amortisation
is
included
in
the
consolidated
income
statement.
The
losses
arising
from
impairment
are
recognised
in
on
acquisition
and
fees
or
costs
that
are
an
integral
part
of
the
effective
interest
rate.
The
effective
interest
rate
the
consolidated
income
statement.
amortisation
is and
included
in
consolidated
statement.
Theeffective
losses arising
from
impairment
are recognised
in
on acquisition
fees statement.
or the
costs
that are anincome
integral
part of the
interest
rate.
The effective
interest rate
the
consolidated
income
the
consolidated
income statement.
amortisation
is included
in the consolidated income statement. The losses arising from impairment are recognised in
the
consolidated
income statement.
amortisation
is included
in the consolidated income statement.
The
losses
arising
from
impairment
are
recognised
in
13
13 other receivables.
the
consolidated
income
statement.
The
Group classifies
its loans
and receivables as trade and
40
the consolidated
income
statement.
The
Group
classifies
its
loans
and
receivables
as
trade
and
other
receivables.
The Group classifies its loans and receivables as trade and other receivables.
The Group classifies its loans and receivables as trade and other receivables.
41
receivables.
Subsequent
Subsequent measurement
measurement
Subsequent
measurement
The
measurement
The subsequent
subsequent
measurement of
of financial
financial assets
assets depends
depends on
on their
their classification
classification as
as follows:
follows:
Subsequent
measurement
The subsequent
measurement of financial assets depends on their classification as follows:
Petroleum
Company
K.S.C. (Closed) And Subsidiaries
The subsequent measurement of financialKuwait
assets Foreign
depends
on their Exploration
classification
as follows:
Loans
Loans and
and receivables
receivables
Loans and
and receivables
receivables Petroleum
Loans
are
financial
with
determinable
payments
that
are
Kuwait
Foreign
Exploration
Company
(Closed)
and
Loans
receivables
are non-derivative
non-derivative
financial assets
assets
with fixed
fixed or
orK.S.C.
determinable
payments
that Subsidiaries
are not
not quoted
quoted in
in an
an
Loans and
and
receivables
NOTES
TO
THE
CONSOLIDATED
FINANCIAL
STATEMENTS
Loans
and
receivables
are non-derivative
financial
assets
with fixed
or determinable
payments
that are notcost
quoted
inthe
an
active
market.
After
initial
measurement,
such
financial
assets
are
subsequently
measured
at
amortised
using
active
market.
After
initial
measurement,
such
financial
assets
are
subsequently
measured
at
amortised
cost
using
the
Loans
and
receivables
are
non-derivative
financial
assets
with
fixed
or
determinable
payments
that
are
not
quoted
in
an
NOTES
TO
THE
CONSOLIDATED
FINANCIAL
STATEMENTS
At
31 December
2013
active
market.
After
initial
measurement,
such financial
assets
are subsequently
measured
atany
amortised
cost
using
the
effective
interest
rate,
less
impairment.
Amortised
cost
is
calculated
by
taking
into
account
discount
or
premium
effective
interest
rate,
less
impairment.
Amortised
cost
is
calculated
by
taking
into
account
any
discount
or
premium
active
market.
After
initial
measurement,
such
financial
assets
are
subsequently
measured
at
amortised
cost
using
the
At
31
December
2013
At
31
December
2013
effective
interestand
rate,
lessorimpairment.
Amortised
cost part
is calculated
by taking
into account
anyeffective
discount interest
or premium
on
acquisition
fees
costs
an
of
interest
rate.
rate
on
acquisition
fees
costs that
that are
are
an integral
integral
of the
the effective
effective
interest
rate. The
The
rate
effective
interestand
rate,
lessorimpairment.
Amortised
cost part
is calculated
by taking
into account
anyeffective
discount interest
or premium
on acquisitionis and
fees in
or the
costs
that are anincome
integral
part of the
effective
interest
rate.
The effective
interest rate
amortisation
included
consolidated
statement.
The
losses
arising
from
impairment
are
recognised
in
amortisation
is
included
in
the
consolidated
income
statement.
The
losses
arising
from
impairment
are
recognised
in
on
acquisition
and
fees
or
costs
that
are
an
integral
part
of
the
effective
interest
rate.
The
effective
interest
rate
22 consolidated
SIGNIFICANT
(continued)
amortisation
is included
inACCOUNTING
the consolidatedPOLICIES
income statement.
The losses arising from impairment are recognised in
the
income
statement.
SIGNIFICANT
ACCOUNTING
POLICIES
(continued)
the
consolidated
income statement.
amortisation
is included
in the consolidated income statement. The losses arising from impairment are recognised in
the consolidated income statement.
the
consolidated
income
statement.
Financial
assets
(continued)
Financial
The
Group
classifies
The
Groupassets
classifies its
its loans
loans and
and receivables
receivables as
as trade
trade and
and other
other receivables.
receivables.
The
Group
classifiesand
its measurement
loans and receivables as trade and other receivables.
Initial
recognition
The
Group
classifies
its
loans
and
receivables
as
trade
and
other
receivables.
Impairment
of financial
assets
Financial assets
within the
scope of IAS 39 are classified as financial assets at fair value through profit or loss,
Derecognition
Derecognition of
of financial
financial assets
assets
The
Group
assesses
at each
reporting
datea whether
anyasset
objective
evidence
that a financial
asset or aassets)
group of
Derecognition
of
financial
financial
assets
available
forassets
sale,
financial
assets
to is
maturity,
and
as derivatives
A
financial
asset
(or,
applicable,
of
aathere
financial
or
of
aa group
financial
A
financial
asset
(or, where
where
applicable,
a part
part
ofheld
financial
assetloans
or part
part
ofreceivables,
group of
oforsimilar
similar
financialdesignated
assets) is
is
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ofisfinancial
assets
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financial
asset
(or,
where
a partor
ofaappropriate.
agroup
financial
assetGroup
orassets
part
of
group
ofclassification
similar
financial
assets)
is
financial
assets
impaired.
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financialhedge,
asset
of financial
is adeemed
to
be
impaired
if,
and
only if,
as
hedging
instruments
in
an
effective
as
The
determines
the
of
its
financial
derecognised
when:
derecognised
when:
A financial asset
(or, where applicable, a part of a financial asset or part of a group of similar financial assets) is
derecognised
when:
there
is
objective
evidence
of
impairment
asthea asset
resulthave
of expired
one or more events that has occurred after the initial
assets
at The
initial
recognition.

rights
to
receive
cash
flows
from
derecognised
when:to receive cash flows from the asset have expired
 The rights
recognition
ofrights
the asset
(an
incurred
‘loss
event’)
and
loss
event hasthe
an impactoron
the
estimated future
cashtoflows
tohas
receive
cash flows
from
the
assetthat
have
expired
 The
Group
transferred
its
rights
receive
cash
flows
assumed
obligation
pay
rights
tohas
receive
cash flows
fromto
asset have
expired
The
Group
transferred
its
tothe
receive
cash
flowsbefrom
from
the asset
asset
or has
has Evidence
assumed an
an
obligation
tomay
pay
of
asset
orrecognised
the
group
of rights
financial
assets
that
reliably
estimated.
ofofarrangement;
impairment
Allthe
financial
assets
are
initially
attofair
valuecash
pluscan
transaction
costs,
except
in
the casean
financial to
assets
 financial
Thereceived
Group
has
transferred
its
rights
receive
flows
from
the
asset
orahas
assumed
obligation
pay
the
cash
flows
in
full
without
material
delay
to
a
third
party
under
‘pass-through’
and
the
received
cash
flows
in
full
without
material
delay
to
a
third
party
under
a
‘pass-through’
arrangement;
and

The
Group
has
transferred
its
rights
to
receive
cash
flows
from
the
asset
or
has
assumed
an
obligation
to
pay
include
that
theflows
borrowers
a group
of borrowers
experiencing
significant
financial
difficulty,
default
recordedindications
at fair
value
through
profit
or or
loss.
the
received
cash
intransferred
full
without
material
delay
toisarisks
thirdand
party
under
aof‘pass-through’
arrangement;
and
either
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the
Group
has
substantially
all
the
rewards
the
asset,
or
(b)
the
Group
has
either
(a)
the
Group
has
transferred
substantially
all
the
risks
and
rewards
of
the
asset,
or
(b)
the
Group
has
the
received
cash
flows
in
full
without
material
delay
to
a
third
party
under
a
‘pass-through’
arrangement;
and
or delinquency
in
interest
or
principal
payments,
theallprobability
thatrewards
theyrewards
will
enter
bankruptcy
or other
financial
either
(a)
the
Group
has
transferred
substantially
allrisks
the risks
and
ofasset,
the
asset,
or transferred
(b)
the Group
has
neither
transferred
nor
retained
substantially
the
and
of
the
but
has
control
neither
transferred
nor
retained
substantially
all
the
risks
and
rewards
of
the
asset,
but
has
transferred
control
either
(a)
the
Group
has
transferred
substantially
all
the
risks
and
rewards
of
the
asset,
or
(b)
the
Group
has
reorganisation
and
where
observable
data
indicate
that
there
is
a
measurable
decrease
in
the
estimated
future
cash
All regular
way
purchases
and
sales
of
financial
assets
are
recognised
on
the
settlement
date,
i.e.
the
date
the
asset
is
neither
transferred
nor
retained
substantially
all
the
risks
and
rewards
of
the
asset,
but
has
transferred
control
of
the
asset.
of
the
asset.
neither
transferred
nor
retained
substantially
all
the
risks
and
rewards
of
the
asset,
but
has
transferred
control
flows,
such
as changes
in arrears
economic conditions
correlate
defaults.
received
from
or
delivered
to theorcounterparty.
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in fair
value with
between
the trade date and settlement date are
of
the
asset.
of the
asset.
recognised
in the
consolidated income
statement
or in
consolidated
statement
of has
comprehensive
income through
When
the
Group
has
its
to
cash
flows
from
or
into
When
the
Group
hasintransferred
transferred
itsin rights
rights
to receive
receive
flows applicable
from an
an asset
asset
or related
has entered
entered
into aa pass-through
pass-through
Financial
cumulative
changes
fair values
accordance
with cash
the
policy
to the
instrument.
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way
When
the liabilities
Group
has
transferred
its rights
to receive
cash
flows from
an
asset
or has
entered
intoofa the
pass-through
arrangement,
and
has
neither
transferred
nor
retained
substantially
all
of
the
risks
and
rewards
asset
nor
arrangement,
and
has
neither
transferred
nor
retained
substantially
all
of
the
risks
and
rewards
of
the
assetframe
nor
When
the
Group
has
transferred
its
rights
to
receive
cash
flows
from
an
asset
or
has
entered
into
a
pass-through
Initial
recognition
and
measurement
purchases
or
sales
are
purchases
or
sales
of financial
assets
thatofrequire
ofand
assets
withinofthe
time
arrangement,
and has
neither
transferred
nor
retained
substantially
all Group’s
ofdelivery
the risks
rewards
thein
asset
nor
transferred
control
of
the
asset,
the
asset
is
recognised
to
the
extent
the
continuing
involvement
the
asset.
transferred
control
of
the
asset,
the
asset
is
recognised
to
the
extent
of
the
Group’s
continuing
involvement
in
the
asset.
arrangement,
and
has
neither
transferred
nor
retained
substantially
all
of
the
risks
and
rewards
of
the
asset
nor
Financial
liabilities
therecognises
scope
ofconventions
IAS
39 are classified
as financial
liabilities
at fair
value
through profit
loss,
generally
established
by
or
in the
market
place.
transferred
control
ofwithin
theregulations
asset,
the asset
is
recognised
toliability.
the
extent
of transferred
the Group’s
continuing
involvement
in
theorasset.
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that
case,
the
Group
also
an
associated
The
asset
and
the
associated
liability
are
In
that
case,
the
Group
also
recognises
an
associated
liability.
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transferred
asset
and
the
associated
liability
are
transferred
control
of
the
asset,
the
asset
is
recognised
to
the
extent
of
the
Group’s
continuing
involvement
in
the
asset.
loans
borrowings,
oralso
as derivatives
designated
as hedging
instruments
inretained.
anasset
effective
as appropriate.
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thatand
case,
the
Group
recognises
anand
associated
liability.
The
transferred
and hedge,
the associated
liability The
are
measured
on
a
basis
that
reflects
the
rights
obligations
that
the
Group
has
measured
on
a
basis
that
reflects
the
rights
and
obligations
that
the
Group
has
retained.
In
that
case,
the
Group
also
recognises
an
associated
liability.
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transferred
asset
and
the
associated
liability
are
Group
determines
thethat
classification
its financial
liabilities
atfunds
initial
recognition.
The Group’s
assets
include
cash
and
balances,
held
by
Parent and
Company,
trade and other
measured
on
afinancial
basis
reflects
the of
rights
and bank
obligations
that
the
Group
hasUltimate
retained.
Kuwait
Foreign
Petroleum
Exploration
Company
K.S.C.
(Closed)
Subsidiaries
Continuing
involvement
that
takes
the
form
of
a
guarantee
over
the
transferred
asset
is
measured
at
the
lower
of
measured
on
a
basis
that
reflects
the
rights
and
obligations
that
the
Group
has
retained.
Kuwait
Foreign
Petroleum
Exploration
Company
K.S.C.
(Closed)
and
Subsidiaries
Continuing
involvement
that takes theExploration
form of a guarantee
over the K.S.C.
transferred(Closed)
asset is measured
at the lower of the
the
receivables.Foreign
Kuwait
Petroleum
Company
and
Subsidiaries
Kuwait
Foreign
Petroleum
Company
K.S.C.
and
Subsidiaries
Continuing
involvement
that
takes
theExploration
form
ofmaximum
aFINANCIAL
guarantee
over of
the
transferred(Closed)
asset
is
measured
at thebelower
of the
NOTES
TO
THE
CONSOLIDATED
STATEMENTS
original
carrying
amount
of
the
asset
and
the
amount
consideration
that
the
Group
could
required
to
All financial
liabilities
are
initially
at
fair value
andof
in
the case ofasset
loans
and
borrowings,
directly
original
carrying
amount
of recognised
the
asset
and
theofmaximum
amount
consideration
that is
the
Group
could
beplus
required
to
NOTES
TO
THE
CONSOLIDATED
FINANCIAL
STATEMENTS
Continuing
involvement
that
takes
the
form
a
guarantee
over
the
transferred
measured
at
the
lower
of
the
NOTES
TO
THE
CONSOLIDATED
FINANCIAL
original
carrying
amount
of the asset and the maximum
amount ofSTATEMENTS
consideration that the Group could be required to
repay.
At
31
December
2013
NOTES
TO
THE
CONSOLIDATED
FINANCIAL
STATEMENTS
attributable
transaction
costs.
The
Group
its financial
other than
at the
fair Group
value through
or loss
repay.
original
carrying
amount
of the
asset
andclassifies
the maximum
amountliabilities
of consideration
that
could beprofit
required
to
Subsequent
measurement
At
31
December
2013
repay.
At
31
December
2013
At
31subsequent
December
2013
as
and other
payables, due
to Ultimate
Parent
Company
and
affiliates, dividends
payable, long-term borrowing
repay.
Thetrade
measurement
of financial
assets
depends
on their
classification
as follows:
When
continuing
involvement
takes
form
and/or
2 guarantee
SIGNIFICANT
ACCOUNTING
(continued)
and
contracts.
When
continuing
involvement
takes the
the POLICIES
form of
of aa written
written
and/or purchased
purchased option
option (including
(including aa cash
cash settled
settled
2
SIGNIFICANT
ACCOUNTING
POLICIES
(continued)
When
continuing
involvement
takes
the
form
of
a
written
and/or
purchased
option
(including
a
cash settled
option
or
similar
provision)
on
the
transferred
asset,
the
extent
of
the
Group’s
continuing
involvement
is
2
ACCOUNTING
(continued)
option
orSIGNIFICANT
similar
provision)
ontakes
the transferred
asset,
the extent
of purchased
the Group’s
continuing
involvement
is the
the
Loans and
receivables
When
continuing
involvement
the POLICIES
form of
a written
and/or
option
(including
a cash settled
2
SIGNIFICANT
ACCOUNTING
POLICIES
(continued)
option
or
similar
provision)
on
the
transferred
asset,
the
extent
of
the
Group’s
continuing
involvement
is the
Subsequent
measurement
amount
of
the
transferred
asset
that
the
Group
may
repurchase,
except
that
in
the
case
of
a
written
put
option
Financial
assets
(continued)
amount
of
the
transferred
asset
that
the
Group
may
repurchase,
except
that
in
the
case
of
a
written
put
option
Loans
and
receivables
are
non-derivative
financial
assets
with
fixed
or
determinable
payments
that
are
not
quoted
in
an
option
or
similar
provision)
on
the
transferred
asset,
the
extent
of
the
Group’s
continuing
involvement
is
the
Financial
(continued)
The
measurement
of
financial
liabilities
depends
onmay
their
classification
as follows:
amount
ofassets
transferred
asset
that
the
Group
repurchase,
except
that
in the
casethe
of extent
a written
putGroup’s
option
(including
aathe
cash
settled
option
or
similar
provision)
on
an
measured
at
value,
of
the
Financial
(continued)
(including
cash
settled
similar
provision)
an asset
asset
measured
at fair
fair
value,
extent
ofcost
the
Group’s
active market.
After
initialoption
measurement,
financial
assets
are subsequently
measured
atthe
amortised
using
the
Financial
assets
(continued)
amount
ofassets
the
transferred
asset or
that
the such
Group
may on
repurchase,
except that
in the
case
of
a written
put
option
(including
ainvolvement
cash
settledisassets
option
orto similar
provision)
onvalue
an asset
measured
at asset
fair value,
the
extent
of the price.
Group’s
continuing
limited
the
lower
of
fair
of
transferred
and
option
exercise
Impairment
of
financial
continuing
isassets
limited
to similar
the Amortised
lower
of the
thecost
fairon
of the
themeasured
transferred
asset
and the
thethe
option
exercise
price.
effective interest
rate,
less
impairment.
isvalue
calculated
by takingatinto
any
discount
or premium
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ainvolvement
cash
settled
option
provision)
an
fair account
value,
extent
of the
Group’s
Impairment
of
financial
Financial
liabilities
other
than atorto
fair
profit
orasset
loss
continuing
involvement
isassets
limited
thevalue
lowerthrough
of the fair
value
of
the transferred asset and the option exercise price.
Impairment
of
financial
The
Group involvement
assesses
at each
reporting
date
whether
there
is any
objective
evidence
that
a financial
asset
orinterest
a price.
grouprate
of
on
acquisition
and
fees
or
costs
that
are
an
integral
part
of
the
effective
interest
rate.
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effective
continuing
is
limited
to
the
lower
of
the
fair
value
of
the
transferred
asset
and
the
option
exercise
Impairment
of
financial
assets
The
Group
at
each
reporting
date
whether
there
is
any
objective
evidence
that
aa financial
asset
or
aausing
group
of
After
initialassesses
recognition,
interest
bearing
loans
and borrowings
are
subsequently
measured
at amortised
cost
the
The
Group
assesses
at
each
reporting
date
whether
there
is
any
objective
evidence
that
financial
asset
or
group
of
financial
assets
is impaired.
A financial
asset
or a group
of
financial
assets
is
deemed
to
be
impaired
if,
and
only
if,
amortisation
is
included
in
the
consolidated
income
statement.
The
losses
arising
from
impairment
are
recognised
in
The
Group
assesses
at
each
reporting
date
whether
there
is
any
objective
evidence
that
a
financial
asset
or
a
group
of
14
financial
assets
is
impaired.
A
financial
asset
or
a
group
of
financial
assets
is
deemed
to
be
impaired
if,
and
only
if,
effective
interest
rate.
Gains
and
losses
are
recognised
in
the
consolidated
income
statement
when
the
liabilities
are
14
financial
assets
is
impaired.
A
financial
asset
or
a
group
of
financial
assets
is
deemed
to
be
impaired
if,
and
only
if,
there
is objective
evidence
offinancial
impairment
asor aa result
one or more
events
that has
occurred
after
theonly
initial
the
consolidated
income
statement.
financial
assets
is
impaired.
A
asset
group
of
financial
assets
is
deemed
to
be
impaired
if,
and
if,
14
there
is
objective
evidence
of
impairment
a result
one
or
more
events
that has
occurred
after
the
initial
derecognised
as well
as through
the effective as
interest
rate
amortisation
process.
Amortised
cost
is calculated
by taking
14 of
there
is
evidence
of
as
result
of
one
or
has
occurred
after
the
initial
recognition
of the asset
(an incurred
‘loss event’)
that
loss
event
has anevents
impactthat
on the
estimated
future
flows
there
is objective
objective
evidence
of impairment
impairment
as aa and
result
of
one
or more
more
events
that
haspart
occurred
after cash
theinterest
initial
recognition
of
the
asset
(an
incurred
‘loss
event’)
and
that
loss
event
has
an
impact
on
the
estimated
future
cash
flows
into
account
any
discount
or
premium
on
acquisition
and
fees
or
costs
that
are
an
integral
of
the
effective
recognition
of
the
asset
(an
incurred
‘loss
event’)
and
that
loss
event
has
an
impact
on
the
estimated
future
cash
of
the
financial
asset
or
the
group
of
financial
assets
that
can
be
reliably
estimated.
Evidence
of
impairment
may
Thethe
Group
classifies
itsor(an
loans
and
receivables
as
trade
other
receivables.
recognition
of theasset
asset
incurred
‘loss
event’)
and and
that
loss
event
has aninimpact
on the
estimated
future
cash flows
flows
of
financial
the
group
of
financial
assets
that
can
be
reliably
estimated.
Evidence
of
impairment
may
rate.
The
effective
interest
rate
amortisation
is
included
in
interest
expense
the
consolidated
income
statement.
of
the
financial
asset
or
the
group
of
financial
assets
that
can
be
reliably
estimated.
Evidence
of
impairment
may
include
indications
that
the
borrowers
or
a
group
of
borrowers
is
experiencing
significant
financial
difficulty,
default
of
the financial
asset
orthe
theborrowers
group of or
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assets
that canisbeexperiencing
reliably estimated.
Evidence
of difficulty,
impairment
may
include
indications
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group
of
borrowers
significant
financial
default
include
indications
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the
borrowers
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group
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borrowers
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the
probability
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bankruptcy
or
other
financial
Derecognition
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assets
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indications
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borrowers
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group
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difficulty,
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Financial
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similar
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and
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flows,
such
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derecognised
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Financial
liabilities
letters
credit,
guarantees
and acceptances.
Financial
liabilities
Initial
recognition
and
measurement
the
received
cash
flows
in
full
without material delay to a third party under a ‘pass-through’ arrangement; and
Financial
liabilities
Initial
recognition
and
measurement
Initial
recognition
and
measurement
Financial
liabilities
within
thehas
scope
of IAS 39
are classified
liabilities
atoffair
profit
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the
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all as
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or received,
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has
Initial
recognition
and
measurement
Financial
liabilities
the
scope
of
IAS
39
are
classified
as
financial
liabilities
at
fair
value
through
profit
or
loss,
guarantee within
contracts
are
recognised
initially
as a liability
at fair
value,
being
the
premium
adjusted
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liabilities
within
the
scope
of
IAS
39
are
classified
as
financial
liabilities
at
fair
value
through
profit
or
loss,
loans
and
borrowings,
or
as
derivatives
designated
as
hedging
instruments
in
an
effective
hedge,
as
appropriate.
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neither
transferred
nor
retained
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all
the
risks
and
rewards
of
the
asset,
but
has
transferred
control
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liabilities
within
the
scope
of
IAS
39
are
classified
as
financial
liabilities
at
fair
value
through
profit
or
loss,
loans
and
borrowings,
or
as
derivatives
designated as
instruments
an effective
hedge,
as
appropriate.
for transaction
costs that
are
directly attributable
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the issuance
of the in
guarantee.
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the liabilityThe
is
loans
and
borrowings,
or
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as
instruments
in
effective
hedge,
as
The
Group
determines
the classification
of itsdesignated
financial liabilities
at initial
recognition.
ofat
the
asset.
loans
and
borrowings,
or
as
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designated
as hedging
hedging
instruments
in an
anthe
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as appropriate.
appropriate.
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Group
determines
the
classification
of
its
financial
liabilities
at
initial
recognition.
measured
the
higher
of
the
best
estimate
of
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expenditure
required
to
settle
present
obligation
at
the
reporting
Group
determines
the
classification
of its
liabilities
Group
determines
therecognised
classification
its financial
financial
liabilities at
at initial
initial recognition.
recognition.
date and
the amount
less of
cumulative
amortisation.
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financial
liabilities
are recognised
initially
at fair cash
valueflows
and infrom
the an
caseasset
of loans
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plus directly
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rights
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receive
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liabilities
are
recognised
initially
at
fair
value
and
in
case
of
loans
and
borrowings,
plus
directly
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financialtransaction
liabilities
are recognised
recognised
initially
at its
fairfinancial
value
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the
case
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borrowings,
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directly
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classifies
liabilities
other
than
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through
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and
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all
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risks
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rewards
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nor
All
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liabilities
are
at
fair
value
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in
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case
of
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and
borrowings,
plus
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transaction
costs.
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Group
classifies
its
financial
liabilities
other
than
at
fair
value
through
profit
or
loss
Derecognition
of
financial
liabilities
attributable
transaction
costs.
The
classifies
financial
liabilities
other
than
at
fair
value
through
profit
or
loss
as
trade andcontrol
other payables,
due
toGroup
Ultimate
Parentits
Company
and
affiliates,
dividends
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transferred
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recognised
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the
extent
of
the
Group’s
continuing
involvement
in
the
asset.
attributable
transaction
costs.
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Group
classifies
its
financial
liabilities
other
than
at
fair
value
through
profit
or
loss
as
trade and
other payables,
due to
Ultimate
Company
andliability
affiliates,
dividends
payable,
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borrowing
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liability
is derecognised
when
the Parent
obligation
under the
is discharged
or
cancelled
or expires.
as
and
payables,
to
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dividends
payable,
long-term
borrowing
and
guarantee
contracts.
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that
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Group
also due
recognises
an associated
liability.and
Theaffiliates,
transferred
asset and
the associated
are
as
trade
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other
payables,
due
to Ultimate
Ultimate
Parent Company
Company
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long-termliability
borrowing
and
guarantee
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guarantee
contracts.
measured
on
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basis
that
reflects
the
rights
and
obligations
that
the
Group
has
retained.
and
guarantee
contracts.
When an existing
financial liability is replaced by another from the same lender on substantially different terms, or the
Subsequent
measurement
Subsequent
measurement
Subsequent
measurement
The
measurement
ofliability
financial
liabilities
depends
theirsuch
classification
as follows:
terms
of an existing
substantially
modified,
an exchange
or modification is treated as a derecognition
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involvement
thatare
takes
the form
of
aon
guarantee
over
the transferred
Subsequent
measurement
The
measurement
of
financial
liabilities
depends
on
their classification
as
follows:asset is measured at the lower of the
The
measurement
of
liabilities
depends
on
classification
as
of
the
original
liability
and
recognition
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a new
liability,
andofthe
difference
thethe
respective
carrying
amounts to
is
original
carrying
amount
ofthe
the
asset and
the
amount
consideration
Group could
be required
The
measurement
of financial
financial
liabilities
depends
on their
their
classification
as follows:
follows:inthat
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liabilities
other thanincome
at fair statement.
value through profit or loss
recognised
in the consolidated
repay.
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other
than
atbearing
fair
value
through
profit
or loss
Financial
liabilities
other
than
fair
through
profit
After
initialliabilities
recognition,
loans
and borrowings
are subsequently measured at amortised cost using the
Financial
liabilities
otherinterest
than at
atbearing
fair value
value
through
profit or
or loss
loss
After
initial
recognition,
interest
loans
and
borrowings
are
subsequently
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at
amortised
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the
After
initial
recognition,
interest
bearing
loans
and
borrowings
are
subsequently
measured
at
amortised
using
the
effective
interest
rate.
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and
losses
are
recognised
in
the
consolidated
income
statement
when theacost
liabilities
are
When
continuing
involvement
takes
the
form
of
a
written
and/or
purchased
option
(including
cash
settled
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initial
recognition,
interest
bearing
loans
and borrowings
are
subsequently
measured
at
amortised
cost
using
the
effective
interest
rate.
Gains
and
losses
are
recognised
in
the
consolidated
income
statement
when
the
liabilities
are
effective
interest
rate.
Gains
and
losses
are
recognised
in
the
consolidated
income
statement
when
the
liabilities
are
derecognised
as
well
as
through
the
effective
interest
rate
amortisation
process.
Amortised
cost
is
calculated
by
taking
option
or
similar
provision)
on
the
transferred
asset,
the
extent
of
the
Group’s
continuing
involvement
is
the
effective interest
rate.asGains
andthe
losses
are recognised
inamortisation
the consolidated
income
statement
when
the liabilities
are
derecognised
as
well
through
effective
interest
rate
process.
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cost
is
calculated
by
taking
derecognised
as
well
as
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the
effective
interest
rate
amortisation
process.
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cost
is
calculated
by
taking
into
account
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discount
or
premium
on
acquisition
and
fees
or
costs
that
are
an
integral
part
of
the
effective
interest
amount
of
the
transferred
asset
that
the
Group
may
repurchase,
except
that
in
the
case
of
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written
put
option
derecognised
as well
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the effective
interest and
rate fees
amortisation
process.an
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taking
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on
or
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integral
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into
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acquisition
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fees
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costs
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are
anconsolidated
integral
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the effective
effective
interest
rate.
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rate
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is
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in fees
interest
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the
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statement.
(including
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cashdiscount
settled
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measured
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into
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are
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effective
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effective
interest
rate
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is
included
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interest
expense
in
the
consolidated
income
statement.
rate.
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interest
rate
is
interest
expense
in
consolidated
statement.
continuing
involvement
is limited
to the lower
of the fairin
of the
transferred
and the income
option exercise
price.
rate.
The effective
effective
interest
rate amortisation
amortisation
is included
included
invalue
interest
expense
in the
the asset
consolidated
income
statement.
Financial guarantee contracts
Financial
guarantee
contracts
Financial
guarantee
contracts
Financial
guarantee
by the Group are those contracts that require a payment to be made to reimburse
Financial
guaranteecontracts
contractsissued
Financial
guarantee
contracts
issued
by the
Group
are those
that
require aa payment
to
be
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15
14 contracts
Financial
guarantee
contracts
issued
Group
those
contracts
that
to
be
made
the
holder
for
a
loss
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incurs
because
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specified
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with the
Financial
guarantee
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by
the
Group are
are
those
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require
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payment
toin
beaccordance
made to
to reimburse
reimburse
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holder
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loss
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because
the
specified
borrower
fails
to
make
payment
when
due
in
accordance
with
the
the
holder
for
a
loss
it
incurs
because
the
specified
borrower
fails
to
make
a
payment
when
due
in
accordance
with
terms
of
a
debt
instrument.
In
the
ordinary
course
of
business,
the
Group
gives
financial
guarantees,
consisting
of
the
holder
for
a loss
it incurs In
because
the specified
borrower
fails to
make
a payment
when due
in accordance
with the
the
terms
of
a
debt
instrument.
the
ordinary
course
of
business,
the
Group
gives
financial
guarantees,
consisting
terms of a debt instrument. In the ordinary course of business, the Group gives financial guarantees, consisting of
of
and
guarantee
contracts.
as trade
and other
payables, due to Ultimate Parent Company and affiliates, dividends payable, long-term borrowing
and
guarantee
contracts.
Subsequent
measurement
and
guarantee
contracts.
Subsequent
measurement
The
measurement
of financial liabilities depends on their classification as follows:
Subsequent
measurement
The
measurement
of financial liabilities depends on their classification as follows:
Subsequent
measurement
The measurement
of financial liabilities depends on their classification as follows:
The
measurement
of other
financial
depends
on their
classification
as follows:
Financial liabilities
thanliabilities
at fair value
through
profit
or loss
Financial
liabilities
other
than
at
fair
value
through
profit
or
loss
Kuwait
Foreign
Petroleum
Exploration
Company
K.S.C.
Subsidiaries
After
initial
recognition,
loans
and borrowings
are subsequently(Closed)
measured atand
amortised
cost using the
Financial
liabilities
otherinterest
than atbearing
fair FINANCIAL
value
through
profit or loss
NOTES
TO
THE CONSOLIDATED
STATEMENTS
After
initial
recognition,
interest
bearing
loans
and borrowings
are subsequently measured at amortised cost using the
Financial
liabilities
other
than
at
fair
value
through
profit
or
loss
effective
interest
rate.
Gains
and
losses
are
recognised
in
the
consolidated
income
statement
when
the
liabilities
NOTES
TO
THE
CONSOLIDATED
FINANCIAL
STATEMENTS
After
initial
recognition,
interest
bearing
loans
and
borrowings
are
subsequently
measured
at
amortised
cost
using are
the
At
31 initial
December
2013
effective
interest
rate. Gains
andbearing
losses are
recognised
in the consolidated
income
statement
when thecost
liabilities
are
After
recognition,
interest
loans
and borrowings
are subsequently
measured
at amortised
using
the
derecognised
as
well
as
through
the
effective
interest
rate
amortisation
process.
Amortised
cost
is
calculated
by
taking
effective
interest
rate.
Gains
and
losses
are
recognised
in
the
consolidated
income
statement
when
the
liabilities
are
At
31
December
2013
At
31 December
2013
derecognised
as well
asGains
through
the
effective
interest rateinamortisation
process.
Amortised
costwhen
is calculated
by taking
effective
interest
rate.
and
losses
are
recognised
the
consolidated
income
statement
the
liabilities
are
into
account any
discount
or premium
on acquisition
or costs that
are an
integral part
effective
derecognised
as well
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interest and
rate fees
amortisation
process.
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is the
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byinterest
taking
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or premium
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effective
derecognised
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taking
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rate
amortisation
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included
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interest
expense
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consolidated
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into
account
any discount ACCOUNTING
or premium on acquisition
and(continued)
fees or costs that are an integral part of the effective interest
2
SIGNIFICANT
POLICIES
2 account
POLICIES
rate.
The SIGNIFICANT
effective
interest ACCOUNTING
rate
amortisation
is
includedand
in(continued)
interest
expense
theanconsolidated
statement.interest
into
any discount
or
premium
on acquisition
fees
or costs
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integral partincome
of the effective
rate. The effective interest rate amortisation is included in interest expense in the consolidated income statement.
rate.
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interest
rate amortisation is included in interest expense in the consolidated income statement.
Financial
guarantee
contracts
Financial
assets
Financial guarantee
assets (continued)
contracts
Financial guarantee
contracts
issued by the Group are those contracts that require a payment to be made to reimburse
Financial
guarantee
contracts
Initial recognition
and
measurement
Financial
guarantee
contracts
issued by
Group are
those contracts
that arequire
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toinbeaccordance
made to reimburse
Financial
guarantee
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the
holder
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specified
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that aassets
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madeprofit
to reimburse
Impairment
assets
Financial
assets
within
the
scope
IAS
39
are
classified
as
financial
at
fair
value
or loss,
the
holderguarantee
forofa financial
loss
it
incurs
because
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specified
borrower
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in
with
the
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payment
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debt
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In
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of
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The
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each
datespecified
whether
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objective
evidence
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financial
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sale,
assets
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and
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ordue
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terms
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In
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ordinary
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Group
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of
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loss
it
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of credit,
guarantees
and
acceptances.
terms
a
debt
instrument.
In
the
ordinary
course
of
business,
the
Group
gives
financial
guarantees,
consisting
financial
is
impaired.
A
financial
assetcourse
or
group
of financial
assets
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impaired if,
andfinancial
only of
if,
as hedging
instruments
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as aappropriate.
Thethe
Group
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thetoclassification
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letters
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fair value,(Closed)
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NOTES
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NOTES
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measured
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NOTES
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STATEMENTS
include
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31and
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2013
NOTES
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STATEMENTS
date
the
amount
recognised
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measured
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NOTES
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date
and
the
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recognised
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and
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Kuwait
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SIGNIFICANT
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(continued)
reorganisation
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December
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NOTES
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flows,
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(continued)
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At
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NOTES
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financial
liability
is derecognised
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under
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NOTES
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15
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42
Once
Once the
the legal
legal right
right to
to explore
explore has
has been
been acquired,
acquired, costs
costs directly
directly associated
associated with
with an
an exploration
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exploration and evaluation intangible assets until the drilling of the well is complete and the results have
have been
been
evaluated.
evaluated.
Kuwait Foreign Petroleum Exploration Company K.S.C. (Closed) And Subsidiaries
If
commercial
hydrocarbons
are
the
is
as
Kuwait
Foreign
Petroleum
Exploration
Company
K.S.C. asset
(Closed)
andoff
If no
no potentially
potentially
hydrocarbons
are discovered,
discovered,
the exploration
exploration
asset
is written
written
offSubsidiaries
as aa dry
dry hole.
hole.
NOTES
TO
THE commercial
CONSOLIDATED
FINANCIAL
STATEMENTS
43
If
If
extractable
hydrocarbons
are
found
and,
subject
to
further
appraisal
activity
(e.g.,
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of
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wells),
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extractable
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are
found
and,
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to
further
appraisal
activity
(e.g.,
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drilling
of
additional
wells),
are
NOTES
TO
THE
CONSOLIDATED
FINANCIAL
STATEMENTS
At
31 December
2013of being commercially developed, the costs continue to be carried as an intangible asset while
likely
to be
likely
be capable
capable
of being commercially developed, the costs continue to be carried as an intangible asset while
At
31 to
December
2013
sufficient/continued
sufficient/continued progress
progress is
is made
made in
in assessing
assessing the
the commerciality
commerciality of
of the
the hydrocarbons.
hydrocarbons. Costs
Costs directly
directly associated
associated
with
appraisal
activity
undertaken
to
determine
the
size,
characteristics
and
commercial
potential
with appraisal activity undertaken to determine the size, characteristics and commercial potential of
of aa reservoir
reservoir
2
SIGNIFICANT
ACCOUNTING
POLICIES
(continued)
following
the
initial
discovery
of
hydrocarbons,
including
the
costs
of
appraisal
wells
where
hydrocarbons
were
Kuwait
Foreign
Petroleum
Exploration
Company
K.S.C.
(Closed)
and
Subsidiaries
following
the
initial
discovery
of
hydrocarbons,
including
the
costs
of
appraisal
wells
where
hydrocarbons
were not
not
Kuwait
Foreign
Petroleum
Exploration
Company
K.S.C.
(Closed)
and
Subsidiaries
found,
are
initially
capitalised
as
an
exploration
and
evaluation
intangible
asset.
Kuwait
Foreign
Petroleum
Exploration
Company
K.S.C.
(Closed)
and
Subsidiaries
found, are initially
capitalised
as an exploration
and
evaluation
intangible
asset. (Closed) and Subsidiaries
Kuwait
Foreign
Petroleum
Exploration
Company
K.S.C.
NOTES
TO
THE
CONSOLIDATED
FINANCIAL
STATEMENTS
Oil and
natural
gas exploration,
evaluation
and
development
expenditure
(continued)
Kuwait
Foreign
Petroleum
Exploration
Company
K.S.C.
(Closed)
and
Subsidiaries
Cash
and
cash
equivalents
NOTES
TO
THE
CONSOLIDATED
FINANCIAL
STATEMENTS
Kuwait
Foreign
Petroleum
Exploration
Company
K.S.C.
(Closed)
and
Subsidiaries
NOTES
TO
THE
CONSOLIDATED
FINANCIAL
STATEMENTS
Kuwait
Foreign
Petroleum
Exploration
Company
K.S.C.
(Closed)
and
Subsidiaries
At
31
December
2013
Kuwait
Foreign
Petroleum
Exploration
Company
K.S.C.
(Closed)
and
Subsidiaries
NOTES
TO
THE
CONSOLIDATED
FINANCIAL
STATEMENTS
For
the
purpose
of
the
consolidated
cash
flow
statement,
cash
and
cash
equivalents
includes
cash
and bank
balances,
All
such
capitalised
costs
are
subject
to
technical,
commercial
and
management
review
as
well
as
review
for
Kuwait
Foreign
Petroleum
Exploration
Company
K.S.C.
(Closed)
and
Subsidiaries
NOTES
TO
THE
CONSOLIDATED
FINANCIAL
STATEMENTS
At
31
December
2013
All
such
capitalised
costs
are
subject
to
technical,
commercial
and
management
review
as
well
as
review
for indicators
indicators
NOTES
TO
THE
CONSOLIDATED
FINANCIAL
STATEMENTS
At
31
December
2013
NOTES
TO
THE
CONSOLIDATED
FINANCIAL
STATEMENTS
Development
costs
At
31
December
2013
deposits
and
other
short-term,
highly
liquid
investments
that
are
readily
convertible
to
known
amounts
of
cash
with
NOTES
TO
CONSOLIDATED
FINANCIAL
STATEMENTS
of
impairment
at
least
once
aa year.
This
confirm
the
continued
intent
or
extract
from
At
31
December
2013
of
impairment
atTHE
least
once
year. installation
This is
is to
to
confirm
the
continued
intent to
to develop
develop
or otherwise
otherwise
extract value
value
from
NOTES
TO
THE
CONSOLIDATED
FINANCIAL
STATEMENTS
At
31
December
2013
Expenditure
on
the
construction,
or
completion
of
infrastructure
facilities
such
as
platforms,
seismic
2
SIGNIFICANT
ACCOUNTING
POLICIES
(continued)
At
31
December
2013
original
maturities
up
to
three
months
from
the
date
of
acquisition
and
that
are
subject
to
an
insignificant
risk
of
2
SIGNIFICANT
ACCOUNTING
POLICIES
(continued)
the
discovery.
When
this
no
longer
case,
the
are
written
off
income statement.
At
31
December
2013
2
SIGNIFICANT
POLICIES
(continued)
the
discovery.
this is
isACCOUNTING
nostudies,
longer the
the
case,
the costs
costs mineral
are
written
off to
to consolidated
consolidated
statement.
At
31
December
2013
2
ACCOUNTING
POLICIES
(continued)
geological
andWhen
geophysical
finance
charges,
interests
in properties,income
pipelines
and the drilling of
change
inSIGNIFICANT
value.
2
SIGNIFICANT
ACCOUNTING
POLICIES
(continued)
2
SIGNIFICANT
ACCOUNTING
POLICIES
(continued)
development
wells,
including
unsuccessful
development
or delineation
wells,
is capitalised
within oil and
gas
2
SIGNIFICANT
ACCOUNTING
POLICIES
(continued)
Oil
and
natural
gas
exploration,
evaluation
and
development
expenditure
(continued)
Oil
and
natural
gas
exploration,
evaluation
and
development
expenditure
(continued)
2
SIGNIFICANT
ACCOUNTING
POLICIES
(continued)
When
proved
reserves
of
oil
and
natural
gas
are
identified
and
is
sanctioned
Oil
and
natural
gas
exploration,
evaluation
and
development
expenditure
2
SIGNIFICANT
ACCOUNTING
POLICIES
(continued)
When
proved
reserves
of
oil
and
natural
gas
are
identified
and development
development
is (continued)
sanctioned by
by management,
management, the
the relevant
relevant
Oil
and
natural
gas
exploration,
evaluation
and
development
expenditure
(continued)
2
SIGNIFICANT
ACCOUNTING
POLICIES
(continued)
properties.
Inventories
Oil
and
natural
gas
exploration,
evaluation
and
development
expenditure
capitalised
expenditure
is
for
and
any
impairment
Oil
and
natural
gas
exploration,
evaluation
and
development
expenditure
(continued)
capitalised
expenditure
is first
first assessed
assessed
for impairment
impairment
and (if
(if required)
required)
any (continued)
impairment loss
loss is
is recognised,
recognised, then
then the
the
Oil
and
natural
gas
exploration,
evaluation
and
development
expenditure
(continued)
Development
costs
Crude
oil
is
valued
at
net
realizable
value.
Any
changes
arising
on
the
revaluation
of
inventories
are
recognised
in and
the
Development
costs
Oil
and
natural
gas
exploration,
evaluation
and
development
expenditure
(continued)
remaining
balance
is
transferred
to
oil
and
gas
properties.
No
amortisation
is
charged
during
the
exploration
Development
costs
Oil
and
natural
gas
exploration,
evaluation
and
development
expenditure
(continued)
remaining
balance
is
transferred
to
oil
and
gas
properties.
No
amortisation
is
charged
during
the
exploration
and
Development
costs
natural
gas exploration,
evaluation
development
expenditure
(continued)
Expenditure
on
the
construction,
installation
or
completion
of
infrastructure
facilities
such
as
platforms,
seismic
Oil
and gas
properties
and other
fixed
assetsand
consolidated
income
statement.
Other
inventories
comprising
mainly
of
spare
parts,
materials
and
supplies
are
valued
Expenditure
on
the
construction,
installation
or
completion
of
infrastructure
facilities
such
as
platforms,
seismic
Development
costs
evaluation
phase.
Expenditure
on
the
construction,
installation or
completion
of infrastructure
facilities
such
as
platforms,
seismic
Development
costs
evaluation
phase.
Expenditure
on
the
construction,
or
completion
infrastructure
facilities
such
as
platforms,
seismic
Development
costs
geological
and
geophysical
studies,
finance
charges,
mineral
interests
in
pipelines
and
the
drilling
of
at
cost, determined
principally
on a installation
weighted
cost
basis,of
less
allowance
for
any obsolete
or
slow
moving
items.
geological
and
geophysical
studies,
financeaverage
charges,
mineral
interests
in properties,
properties,
pipelines
and
the
drilling
of
Expenditure
on
the
construction,
installation
or
completion
of
infrastructure
facilities
such
as
platforms,
seismic
Development
costs
geological
and
geophysical
studies,
finance
charges,
mineral
interests
in
properties,
pipelines
and
the
drilling
of
Development
costs
Expenditure
on
the
construction,
installation
or
completion
of
infrastructure
facilities
such
as
platforms,
seismic
geological
and
geophysical
studies,
finance
charges,
mineral
interests
in
properties,
pipelines
and
the
drilling
of
Development
costs
Expenditure
on
the
construction,
installation
or
completion
of
infrastructure
facilities
such
as
platforms,
seismic
development
wells,
including
unsuccessful
development
or
delineation
wells,
is
capitalised
within
oil
and
gas
Initial
recognition
Purchase
cost
includes
the
purchase
price,
import
duties,
transportation,
handling
and
other
direct
costs.
development
wells,
including
unsuccessful
development
or
delineation
wells,
is
capitalised
within
oil
and
gas
Expenditure
on
the
construction,
installation
or
completion
of
infrastructure
facilities
such
as
platforms,
seismic
geological
and
geophysical
studies,
finance
charges,
mineral
interests
in
properties,
pipelines
and
the
drilling
of
development
wells,
including
unsuccessful
development
or
delineation
wells,
is
capitalised
within
oil
and
gas
Expenditure
on
the
construction,
installation
or
completion
of
infrastructure
facilities
such
as
platforms,
seismic
geological
and
geophysical
studies,
finance
charges,
mineral
interests
in
properties,
pipelines
and
the
drilling
of
development
wells,
including
unsuccessful
development
or
delineation
wells,
is
capitalised
within
oil
and
gas
Expenditure
on
the
construction,
installation
or
completion
of
infrastructure
facilities
such
as
platforms,
seismic
geological
geophysical
finance
charges,
mineral
interests
in
properties,
pipelines
and
drilling
of
properties.
Oil and gasand
properties
and studies,
other
fixed
assets
are stated
at
cost,
less accumulated
depreciation
andthe
accumulated
properties.
geological
and
geophysical
studies,
finance
charges,
mineral
interests
in
properties,
pipelines
and
the
drilling
of
development
wells,
including
unsuccessful
development
or
delineation
wells,
is
capitalised
within
oil
and
gas
properties.
geological
and
geophysical
studies,
finance
charges,
mineral
interests
in
properties,
pipelines
and
the
drilling
of
development
wells,
including
unsuccessful
development
or
delineation
wells,
is
capitalised
within
oil
and
gas
properties.
geological
and
geophysical
studies,
finance
charges,
mineral
interests
in
properties,
pipelines
and
the
drilling
of
development
wells,
including
unsuccessful
development
or
delineation
wells,
is
capitalised
within
oil
and
gas
impairment
losses.
Oil
and
natural
gas
exploration,
evaluation
and
development
expenditure
development
wells,
including
unsuccessful
development
or
delineation
wells,
is
capitalised
within
oil
and
gas
properties.
16
development
wells,
including
unsuccessful
development
or
delineation
wells,
is
capitalised
within
oil
and
gas
properties.
16
development
wells,
including
unsuccessful
development
or
delineation
wells,
is
capitalised
within
oil
and
gas
properties.
Oil
and
gas
properties
and
other
fixed
assets
properties.
Oil
and
gas
properties
and
other
fixed
assets
properties.
Oil
and
gas
properties
and
other
fixed
assets
Oil
and
gas
properties
and
other
fixed
assets
The
initial
cost
ofgas
an exploration,
asset
comprises
its purchase
price or construction
cost, isany
costs directly
attributable
to bringing
properties.
Oil
and
natural
evaluation
and development
expenditure
accounted
for using
successful
efforts
Oil
and
gas
properties
and
other
fixed
assets
Oil
and
gas
properties
and
other
fixed
assets
the
asset
into
operation,
the
initial
estimate
of
the
decommissioning
obligation,
and
for
qualifying
assets
(where
Oil
and
gas
properties
and
other
fixed
assets
Initial
recognition
method
of
accounting.
Initial
recognition
Oil
and
gas
properties
and
other
fixed
assets
Initial
Oil
andrecognition
gas borrowing
propertiescosts.
and other
fixed assets
Initial
recognition
applicable),
The
purchase
price or
construction
cost less
is theaccumulated
aggregate amount
paid andand
the accumulated
fair value of
Oil
and
gas
properties
and
other
fixed
assets
are
stated
at
cost,
depreciation
Oil
and
gas
properties
and
other
fixed
assets
Oil
and
gas
properties
and
other
fixed
assets
are
stated
at
cost,
less
accumulated
depreciation
and
accumulated
Initial
recognition
Oil
and
gas
properties
and
other
fixed
assets
are
stated
at
cost,
less
accumulated
depreciation
and
accumulated
Initial
recognition
Oil
and
gas
properties
and
other
fixed
assets
are
stated
at
cost,
less
accumulated
depreciation
and
accumulated
any
other
consideration
given
to
acquire
the
asset.
impairment
losses.
Initial
recognition
Pre-licence
costs
impairment
losses.
Oil
and
gas
properties
and
other
fixed
are
stated
at
less
accumulated
depreciation
and
accumulated
Initial
recognition
impairment
losses.
Initial
recognition
Oil
and
gas
properties
and
other
fixed assets
assets
are
stated
at cost,
cost,
less
accumulated
depreciation
and
accumulated
impairment
losses.
Initial
recognition
Oil
and
gas
properties
and
other
assets
are
stated
cost,
less
accumulated
depreciation
and
accumulated
Pre-licence
costs
are expensed
in thefixed
period
in which
they
areat
incurred.
impairment
losses.
Oil
and
gas
properties
and
other
fixed
assets
are
stated
at
cost,
less
accumulated
depreciation
and
accumulated
Oil
and
gas
properties
and
other
fixed
assets
are
stated
at
cost,
less
accumulated
depreciation
and
impairment
losses.
Oil and
gas
properties
and
other
assets
are
stated
at cost,
lesscost,
accumulated
depreciation
and accumulated
accumulated
impairment
losses.
When
a development
project
movesfixed
into
the production
stage,
the capitalisation
of certain
construction/development
The
initial
cost
of
an
asset
comprises
its
purchase
price
or
construction
any
costs
directly
attributable
to
bringing
The
initial
cost
of
an
asset
comprises
its
purchase
price
or
construction
cost,
any
costs
directly
attributable
to
bringing
impairment
losses.
The
initial
cost
of
an
asset
comprises
its
purchase
price
or
construction
cost,
any
costs
directly
attributable
to
bringing
impairment
losses.
The
initial
cost
of
an
asset
comprises
its
purchase
price
or
construction
cost,
costs
directly
attributable
to
bringing
impairment
losses.
costsasset
ceases
and
costs
are the
either
regarded
as part
of
the
cost
of inventory
or any
expensed,
except
for
costs assets
which
qualify
the
into
operation,
initial
estimate
of
the
decommissioning
obligation,
and
for
qualifying
(where
Licence
and
property
acquisition
costs
the
asset
into
operation,
the
initial
estimate
of
the
decommissioning
obligation,
and
for
qualifying
assets
(where
The
initial
cost
of
an
asset
comprises
its
purchase
price
or
construction
cost,
any
costs
directly
attributable
to
bringing
the
asset
into
operation,
the
initial
estimate
of
the
decommissioning
obligation,
and
for
qualifying
assets
(where
The
initial
cost
of
an
asset
comprises
its
purchase
price
or
construction
cost,
any
costs
directly
attributable
to
bringing
the
asset
into
operation,
the
initial
estimate
of
the
decommissioning
obligation,
and
for
qualifying
assets
(where
The
initial
cost
of
an
asset
comprises
its
purchase
price
or
construction
cost,
any
directly
attributable
to
bringing
for capitalisation
relating
to
oil
andpurchase
gas
property
asset
additions,
improvements
or costs
new
developments.
applicable),
borrowing
costs.
The
price
or
construction
cost
is
the
aggregate
amount
paid
and
the
fair
value
of
Exploration
licence
and
leasehold
property
acquisition
costs
are
capitalised
within
intangible
assets
and
are
reviewed
applicable),
borrowing
costs.
The
purchase
price
or
construction
cost
is
the
aggregate
amount
paid
and
the
fair
value
of
The
initial
cost
of
an
asset
comprises
its
purchase
price
or
construction
cost,
any
costs
directly
attributable
to
bringing
the
asset
into
operation,
the
initial
estimate
of
the
decommissioning
obligation,
and
for
qualifying
assets
(where
applicable),
borrowing
costs.
The
purchase
price
or
construction
cost
is
the
aggregate
amount
paid
and
the
fair
value
of
The
initial
cost
of
an
comprises
its
purchase
price
or
cost,
any
directly
attributable
to
bringing
the
asset
into
operation,
the
initial
estimate
of
the
decommissioning
obligation,
and
for
qualifying
assets
(where
applicable),
borrowing
costs.
The
purchase
price
or
construction
cost
is
the
aggregate
amount
paid
and
the
fair
value
of
The
initial
cost
ofdate
an asset
asset
comprises
its the
purchase
price
or construction
construction
cost,
any costs
costs
directly
attributable
toamount.
bringing
the
asset
into
operation,
the
initial
estimate
of
the
decommissioning
obligation,
and
for
qualifying
assets
(where
any
other
consideration
given
to
acquire
asset.
at
each
reporting
to
confirm
that
there
is
no
indication
that
the
carrying
amount
exceeds
the
recoverable
any
other
consideration
given
to
acquire
the
asset.
the
asset
into
operation,
the
initial
estimate
of
the
decommissioning
obligation,
and
for
qualifying
assets
(where
applicable),
borrowing
costs.
The
purchase
price
or
construction
cost
is
the
aggregate
amount
paid
and
the
fair
value
of
any
other
consideration
given
to
acquire
the
asset.
the
asset
into
operation,
the
initial
estimate
of
the
decommissioning
obligation,
and
for
qualifying
assets
(where
applicable),
borrowing
costs.
The
purchase
price
or
construction
cost
is
the
aggregate
amount
paid
and
the
fair
value
of
any
other
consideration
given
to
acquire
the
asset.
the
asset
into
operation,
the
initial
estimate
of
the
decommissioning
obligation,
and
for
qualifying
assets
(where
applicable),
borrowing
costs.
The
purchase
price
or
construction
cost
is
the
aggregate
amount
paid
and
the
fair
value
of
Decommissioning
costs
and
provisions
applicable),
borrowing
costs.
The
purchase
price
or
construction
cost
is
the
aggregate
amount
paid
and
the
fair
value
any
other
consideration
given
to
acquire
the
asset.
applicable),
borrowing costs.
The
purchase
price
or construction cost is the aggregate amount paid and the fair value of
of
any
other
consideration
given
to
acquire
the
asset.
The
decommissioning
provision
is
calculated
based
on
the
net
present
value
of
the
Group's
share
of
the
estimated
any
other
consideration
given
to
acquire
the
asset.
When
a
development
project
moves
into
the
production
stage,
the
capitalisation
of
certain
construction/development
applicable),
borrowing
costs.
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purchase
price
or
construction
cost
is
the
aggregate
amount
paid
and
the
fair
value
of
This
review
includes
confirming
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drilling
is
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way
or
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or
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it
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been
When
aa development
project
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into
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stage,
the
capitalisation
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construction/development
any
other
consideration
given
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acquire
the
asset.
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project
moves
into
the
production
stage,
the
capitalisation
of
certain
construction/development
any
other
consideration
given
to
acquire
the
asset.
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development
project
moves
into
the
production
stage,
the
capitalisation
of
certain
construction/development
any
other
consideration
given
to
acquire
the
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future
cost
of
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and
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restoration
required
for
facilities
in
place.
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is
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the
latest
costs
ceases
and
costs
are
either
regarded
as
part
of
the
cost
of
inventory
or
expensed,
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qualify
determined,
or
work
is
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way
to
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that
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discovery
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economically
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on
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range
of
technical
costs
ceases
and
costs
are
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of
the
cost
of
inventory
or
expensed,
except
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costs
which
qualify
When
aa development
project
moves
into
the
production
stage,
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capitalisation
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construction/development
costs
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and
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the
cost
of
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or
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qualify
When
moves
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capitalisation
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and
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of
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the
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estimates
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theplans
field and
operators.
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aa development
development
project
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for
capitalisation
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gas
property
asset
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improvements
or
new
developments.
and
commercial
considerations
sufficient
progress
is cost
being
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on establishing
development
timing.
for
capitalisation
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to
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and
gas
property
asset
additions,
improvements
or
new
developments.
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development
project
moves
into
the
production
stage,
the
capitalisation
of
certain
construction/development
costs
ceases
and
costs
are
either
regarded
as
part
of
the
cost
of
inventory
or
expensed,
except
for
costs
which
qualify
for
capitalisation
relating
to
oil
and
gas
property
asset
additions,
improvements
or
new
developments.
When
a
development
project
moves
into
the
production
stage,
the
capitalisation
of
certain
construction/development
costs
ceases
and
costs
are
either
regarded
as
part
of
the
cost
of
inventory
or
expensed,
except
for
costs
which
qualify
for
capitalisation
relating
to
oil
and
gas
property
asset
additions,
improvements
or
new
developments.
When
a
development
project
moves
into
the
production
stage,
the
capitalisation
of
certain
construction/development
associated
decommissioning
asset
is
recognized,
which
is
amortised
for
each
field
on
a
unit-of-production
basis
in
costs
ceases
and
costs
are
either
regarded
as
part
of
the
cost
of
inventory
or
expensed,
except
for
costs
which
qualify
costs
ceases and
and costs
costs
areto
either
regarded
as part
partasset
of the
the
cost of
of inventory
inventory
or expensed,
expensed,
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for costs
costs which
which qualify
qualify
for
capitalisation
relating
oil
and
gas
property
additions,
improvements
or
new
developments.
costs
ceases
are
either
regarded
as
of
cost
or
except
for
capitalisation
relating
to
oil
and
gas
property
additions,
improvements
or
new
costs
ceases with
and costs
are
either
regarded
as value
partasset
ofofthe
cost
of inventory
or expensed,
except
costs
which
qualify
accordance
the
Group's
policy
for
depreciation,
depletion
and property
amortisation
of developments.
oil
and for
gas
properties.
Period
for
capitalisation
relating
to
oil
and
gas
property
asset
additions,
improvements
or
new
developments.
Decommissioning
costs
and
provisions
If
no
future
activity
is
planned,
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carrying
the
licence
and
acquisition
costs
is
written
off
through
Decommissioning
costs
and
provisions
for
capitalisation
relating
to
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and
gas
property
asset
additions,
improvements
or
new
developments.
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costs
and
provisions
for
capitalisation
relating
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and
gas
property
asset
additions,
improvements
or
new
developments.
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costs
and
provisions
for
capitalisation
relating
to oil
oil
and
gas
property
asset
additions,
improvements
or
new
developments.
charges
for changes
instatement.
the
net
present
value of
theofon
decommissioning
provision
arising
fromshare
the
of the
The
decommissioning
provision
is
calculated
based
the
net
present
value
of
the
Group's
of
the
estimated
consolidated
income
Upon
recognition
proved
reserves
and
internal
approval
for unwinding
development,
The
decommissioning
provision
is
calculated
based
on
the
net
present
value
of
the
Group's
share
of
the
estimated
Decommissioning
costs
and
provisions
The
decommissioning
provision
is
calculated
based
on
the
net
present
value
of
the
Group's
share
of
the
estimated
Decommissioning
costs
and
provisions
The
decommissioning
provision
is
calculated
based
on
the
net
present
value
of
the
Group's
share
of
the
estimated
discount
are
included
in
finance
costs.
Decommissioning
costs
and
provisions
future
cost
of
decommissioning
and
site
restoration
required
for
facilities
in
place.
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is
calculated
using
the
latest
relevant
expenditure
is
transferred
to
oil
and
gas
properties.
future
cost
of
decommissioning
and
site
restoration
required
for
facilities
in
place.
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is
calculated
using
the
latest
The
decommissioning
provision
is
calculated
based
on
the
net
present
value
of
the
Group's
share
of
the
estimated
Decommissioning
costs
and
provisions
future
cost
of
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and
site
restoration
required
for
facilities
in
place.
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is
calculated
using
the
latest
Decommissioning
costsprovision
and provisions
The
decommissioning
is
calculated
based
on
the
net
present
value
of
the
Group's
share
of
the
estimated
future
cost
of
decommissioning
and
site
restoration
required
for
facilities
in
place.
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is
calculated
using
the
latest
The
decommissioning
provision
is
calculated
based
on
the
net
present
value
of
the
Group's
share
of
the
estimated
estimates
provided
by
the
Group's
technical
staff,
which
is
based
upon
estimates
provided
by
the
field
operators.
An
Decommissioning
costs
and
provisions
estimates
provided
by
the
Group's
technical
staff,
which
is
based
upon
estimates
provided
by
the
field
operators.
An
The
decommissioning
provision
is
calculated
based
on
the
net
present
value
of
the
Group's
share
of
the
estimated
future
cost
of
decommissioning
and
site
restoration
required
for
facilities
in
place.
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is
calculated
using
the
latest
estimates
provided
by
the
Group's
technical
staff,
which
is
based
upon
estimates
provided
by
the
field
operators.
An
The
decommissioning
provision
is
calculated
based
on
the
net
present
value
of
the
Group's
share
of
the
estimated
future
cost
of
decommissioning
and
site
restoration
required
for
facilities
in
place.
This
is
calculated
using
the
latest
estimates
provided
by
the
Group's
technical
staff,
which
based
upon
estimates
provided
by
the
field
operators.
An
future
cost
of
decommissioning
and
site
restoration
required
for
facilities
in
place.
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is
calculated
using
the
latest
The
Group
recognises
a
decommissioning
provision
when
it
has
a
present
legal
or
constructive
obligation
as
a
result
of
associated
decommissioning
asset
is
recognized,
which
is
amortised
for
each
field
on
a
unit-of-production
basis
in
decommissioning
provision
is
calculated
based
on
the
net
present
value
of
the
Group's
share
of
the
estimated
Exploration
and
evaluation
costs
associated
decommissioning
asset
is
recognized,
which
is
amortised
for
each
field
on
a
unit-of-production
basis
in
future
cost
of
decommissioning
and
site
restoration
required
for
facilities
in
place.
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is
calculated
using
the
latest
estimates
provided
by
the
Group's
technical
staff,
which
based
upon
estimates
provided
by
the
field
operators.
An
associated
decommissioning
asset
is
recognized,
which
is
amortised
for
each
field
on
a
unit-of-production
basis
in
future
cost
of
decommissioning
and
site
restoration
required
for
facilities
in
place.
This
is
calculated
using
the
latest
estimates
provided
by
the
Group's
technical
staff,
which
based
upon
estimates
provided
by
the
field
operators.
An
associated
decommissioning
asset
is
recognized,
which
is
amortised
for
each
field
on
a
unit-of-production
basis
in
estimates
provided
by
the
Group's
technical
staff,
which
based
upon
estimates
provided
by
the
field
operators.
An
past
events,
and
it
is
probable
that
an
outflow
of
resources
will
be
required
to
settle
the
obligation,
and
a
reliable
accordance
with
the
Group's
policy
for
depreciation,
depletion
and
amortisation
of
oil
and
gas
properties.
Period
future
cost
of
decommissioning
and
site
restoration
required
for
facilities
in
place.
This
is
calculated
using
the
latest
Exploration
and
evaluation
activity
involves
the
search
for
mineral
resources,
the
determination
of
technical
feasibility
accordance
with
the
Group's
policy
for
depreciation,
depletion
and
amortisation
of
oil
and
gas
properties.
Period
estimates
provided
by
the
Group's
technical
staff,
which
based
upon
estimates
provided
by
the
field
operators.
An
associated
decommissioning
asset
is
recognized,
which
is
amortised
for
each
field
on
a
unit-of-production
basis
in
accordance
with
the
Group's
policy
for
depreciation,
depletion
and
amortisation
of
oil
and
gas
properties.
Period
estimates
provided
by
the
Group's
technical
staff,
which
based
upon
estimates
provided
by
the
field
operators.
An
associated
decommissioning
asset
is
recognized,
which
is
amortised
for
each
field
on
a
unit-of-production
basis
in
accordance
with
the
Group's
policy
for
depreciation,
depletion
and
amortisation
of
oil
and
gas
properties.
Period
estimates
provided
by
the
Group's
technical
staff,
which
based
upon
estimates
provided
by
the
field
operators.
An
associated
decommissioning
asset
is
recognized,
which
is
amortised
for
each
field
on
a
unit-of-production
basis
in
estimate
of
the
amount
of
obligation
can
be
made.
charges
for
changes
in
the
net
present
value
of
the
decommissioning
provision
arising
from
the
unwinding
of
the
and
assessment
of
commercial
viability
of
an
identified
resource.
charges
for
changes
in
the
net
present
value
of
the
decommissioning
provision
arising
from
the
unwinding
of
the
associated
decommissioning
asset
is
recognized,
which
is
amortised
for
each
field
on
a
unit-of-production
basis
in
accordance
with
the
Group's
policy
for
depreciation,
depletion
and
amortisation
of
oil
and
gas
properties.
Period
charges
for
changes
in
the
net
present
value
of
the
decommissioning
provision
arising
from
the
unwinding
of
the
associated
decommissioning
asset
is for
recognized,
which
is amortised
for
each field
onoila from
unit-of-production
basis
in
accordance
with
the
Group's
policy
depreciation,
depletion
and
amortisation
of
and
gas
properties.
Period
charges
for
changes
in
the
net
present
value
of
the
decommissioning
provision
arising
the
unwinding
of
the
accordance
with
the
Group's
policy
for
depreciation,
depletion
and
amortisation
of
oil
and
gas
properties.
Period
discount
are
included
in
finance
costs.
associated
decommissioning
asset
is
recognized,
which
is
amortised
for
each
field
on
a
unit-of-production
basis
in
discount
are
included
in
finance
costs.
accordance
with
the
Group's
policy
for
depreciation,
depletion
and
amortisation
of
oil
and
gas
properties.
Period
charges
for
changes
in
the
net
present
value
of
the
decommissioning
provision
arising
from
the
unwinding
of
the
discount
are
included
in
finance
costs.
accordance
with
the
Group's
policy
for
depreciation,
depletion
and
amortisation
of
oil
and
gas
properties.
Period
charges
for
changes
in
the
net
present
value
of
the
decommissioning
provision
arising
from
the
unwinding
of
the
discount
are
included
in
finance
costs.
accordance
with
the
Group's
policy
for
depreciation,
depletion
and
amortisation
of
oil
and
gas
properties.
Period
The obligation
generally
arises
when
thevalue
asset is
or the associated
ground/environment
is disturbed
at unwinding
the
location.
charges
for
changes
in
the
nethas
present
value
of installed
the
decommissioning
provision
arising
from well
the
unwinding
of the
the
Once
thefor
legal
right
toin
explore
been
acquired,
costs
directly
with anarising
exploration
are field
capitalised
as
charges
changes
the
net
present
of
the
decommissioning
provision
from
the
of
discount
are
included
in
finance
costs.
charges
for
changes
in
the
net
present
value
of
the
decommissioning
provision
arising
from
the
unwinding
of
the
discount
are
included
in
finance
costs.
charges
for
changes
the
net
present assets
value
of
thewhen
decommissioning
provision
arising
from
the results
unwinding
ofbeen
the
When
the
liability
isin
initially
recognised,
theuntil
present
value
ofaaof
the
estimated
costs
is capitalised
by
increasing
discount
are
included
in
finance
costs.
The
Group
recognises
aa decommissioning
provision
it
has
present
legal
constructive
as
aa result
of
exploration
and
evaluation
intangible
the
drilling
the
well
isor
complete
and obligation
the
have
The
Group
recognises
decommissioning
provision
when
it
has
present
legal
or
constructive
obligation
as
result
of
discount
are
included
in
finance
costs.
The
Group
recognises
a
decommissioning
provision
when
it
has
a
present
legal
or
constructive
obligation
as
a
result
of
discount
are
included
in
finance
costs.
The
Group
recognises
a
decommissioning
provision
when
it
has
a
present
legal
or
constructive
obligation
as
a
result
discount
are
included
in
finance
costs.
carrying
amount
of
the
related
oil
and
gas
assets
to
the
extent
that
it
was
incurred
by
the
development/construction
of
past
events,
and
it
is
probable
that
an
outflow
of
resources
will
be
required
to
settle
the
obligation,
and
aa result
reliable
evaluated.
past
events,
and
it
is
probable
that
an
outflow
of
resources
will
be
required
to
settle
the
obligation,
and
reliable
The
Group
recognises
a
decommissioning
provision
when
it
has
a
present
legal
or
constructive
obligation
as
a
of
past
events,
and
it
is
probable
that
an
outflow
of
resources
will
be
required
to
settle
the
obligation,
and
a
reliable
The
Group
recognises
a
decommissioning
provision
when
it
has
a
present
legal
or
constructive
obligation
as
a
result
of
past
events,
and
it
is
probable
that
an
outflow
of
resources
will
be
required
to
settle
the
reliable
the field.
Any
decommissioning
obligations
that arise
through
the
of or
inventory
areobligation,
expensed
asand
incurred.
The
Group
recognises
aaof
decommissioning
provision
when
it
has
aa production
present
legal
constructive
obligation
as
aaaa result
of
estimate
of
the
amount
obligation
can
be
made.
estimate
of
the
amount
of
obligation
can
be
made.
The
Group
recognises
decommissioning
provision
when
it
has
present
legal
or
constructive
obligation
as
result
of
past
events,
and
it
is
probable
that
an
outflow
of
resources
will
be
required
to
settle
the
obligation,
and
reliable
estimate
of
the
amount
of
obligation
can
be
made.
The
Group
recognises
a
decommissioning
provision
when
it
has
a
present
legal
or
constructive
obligation
as
a
result
of
past
events,
and
it
is
probable
that
an
outflow
of
resources
will
be
required
to
settle
the
obligation,
and
a
reliable
estimate
of
the
amount
of
obligation
can
be
made.
past
events,
and
it
is
probable
that
an
outflow
of
resources
will
be
required
to
settle
the
obligation,
and
a
reliable
The
Group
recognises
a
decommissioning
provision
when
it
has
a
present
legal
or
constructive
obligation
as
a
result
of
If
no
potentially
commercial
hydrocarbons
are
discovered,
the
exploration
asset
is
written
off
as
a
dry
hole.
If
past
events,
and
it
is
probable
that
an
outflow
of
resources
will
be
required
to
settle
the
obligation,
and
a
reliable
estimate
of
the
amount
of
obligation
can
be
made.
past
events,
and
it is probable
that can
an outflow
of resources will be required to settle the obligation, and a reliable
estimate
of
the
amount
of
obligation
be
made.
estimate
of
the
amount
of
obligation
can
be
made.
Changes
in
the
estimated
timing
of
decommissioning
or
decommissioning
cost
estimates
are
dealt
with
prospectively
The
obligation
generally
arises
when
the
asset
is
installed
or
the
ground/environment
is
disturbed
at
the
field
location.
past
events,
and
it
is
probable
that
an
outflow
of
resources
will
be
required
to
settle
the
obligation,
and
a
reliable
extractable
hydrocarbons
are
found
and,
subject
to
further
appraisal
activity
(e.g.,
the
drilling
of
additional
wells),
are
The
obligation
generally
arises
when
the
asset
is
installed
or
the
ground/environment
is
disturbed
at
the
field
location.
estimate
of
the
amount
of
obligation
can
be
made.
The
obligation
generally
when
the
asset
is
installed or
the
ground/environment is
disturbed
at
the
field
location.
estimate
of the amount
ofarises
obligation
can
be
made.
The
obligation
generally
arises
when
the
asset
is
or
the
disturbed
at
the
field
location.
by recording
anamount
adjustment
to the
provision,
and
ainstalled
corresponding
adjustment
to be
oil
andis
properties.
When
the
is
recognised,
the
present
value
of
the
estimated
costs
is
capitalised
by
increasing
the
estimate
the
of
obligation
can
be
made.
likely
to
beliability
capable
being
commercially
developed,
the
costs
continue
to
carried
as
an intangible
asset
while
When
theof
liability
isofinitially
initially
recognised,
the
present
value
of ground/environment
the
estimated
costs
isgas
capitalised
by
increasing
the
The
obligation
generally
arises
when
the
asset
is
installed
or
the
ground/environment
is
disturbed
at
the
field
location.
When
the
liability
is
initially
recognised,
the
present
value
of
the
estimated
costs
is
capitalised
by
increasing
the
The
obligation
generally
arises
when
the
asset
is
installed
or
the
ground/environment
is
disturbed
at
the
field
location.
When
the
liability
is
initially
recognised,
the
present
value
of
the
estimated
costs
is
capitalised
by
increasing
the
The
obligation
generally
arises
when
the
asset
is
installed
or
the
ground/environment
is
disturbed
at
the
field
location.
carrying
amount
of
the
related
oil
and
gas
assets
to
extent
that
it
was
incurred
by
the
development/construction
of
sufficient/continued
progress
is
made
in
assessing
the
commerciality
of
the
hydrocarbons.
Costs
directly
associated
carrying
amount
of
the
related
oil
and
gas
assets
to
extent
that
it
was
incurred
by
the
development/construction
of
The
obligation
generally
arises
when
the
asset
is
installed
or
the
ground/environment
is
disturbed
at
the
field
location.
When
the
liability
is
initially
recognised,
the
present
value
of
the
estimated
costs
is
capitalised
by
increasing
the
carrying
amount
of
the
related
oil
and
gas
assets
to
the
extent
that
it
was
incurred
by
the
development/construction
of
The
obligation
generally
arises
when
the
asset
is
installed
or
the
ground/environment
is
disturbed
at
the
field
location.
When
the
liability
is
initially
recognised,
the
present
value
of
the
estimated
costs
is
capitalised
by
increasing
the
carrying
amount
of
the
related
oil
and
gas
assets
to
the
extent
that
it
was
incurred
by
the
development/construction
of
The
obligation
generally
arises
when
the
asset
is
installed
or
the
ground/environment
is
disturbed
at
the
field
location.
When
the
liability
is
initially
recognised,
the
present
value
of
the
estimated
costs
is
capitalised
by
increasing
the
Anyfield.
reduction
in
the
decommissioning
liability
and,
therefore,
any
deduction
from
the
asset
to which
it
relates,
may
the
Any
decommissioning
obligations
that
arise
through
the
production
of
inventory
are
expensed
as
incurred.
with
appraisal
activity
undertaken
to
determine
the
size,
characteristics
and
commercial
potential
of
a
reservoir
the
field.
Any
decommissioning
obligations
that
arise
through
the
production
of
inventory
are
expensed
as
incurred.
When
the
liability
is
initially
recognised,
the
present
value
of
the
estimated
costs
is
capitalised
by
increasing
the
carrying
amount
of
the
related
oil
and
gas
assets
to
the
extent
that
it
was
incurred
by
the
development/construction
of
the
field.
Any
decommissioning
obligations
that
arise
through
the
production
of
inventory
are
expensed
as
incurred.
When
the
liability
is
initially
recognised,
the
present
value
of
the
estimated
costs
is
capitalised
by
increasing
the
carrying
amount
of
the
related
oil
and
gas
assets
to
the
extent
that
it
was
incurred
by
the
development/construction
of
the
field.
Any
decommissioning
obligations
that
arise
through
the
production
of
inventory
are
expensed
as
incurred.
When
the
liability
is
initially
recognised,
the
present
value
of
the
estimated
costs
is
capitalised
by
increasing
the
carrying
amount
of the
the
related
oil
and
gas
assets
to
the
extent
that
it was
was
incurred
by the
thevalue
development/construction
of
not field.
exceed
thedecommissioning
carrying
amountoil
ofhydrocarbons,
thatgas
asset.
Ifarise
it does,
any
excess
over
theofcarrying
ishydrocarbons
taken immediately
to
following
the
initial
discovery
of
including
the
costs
of
appraisal
wells
where
were
not
carrying
amount
of
related
and
assets
to
the
extent
that
it
incurred
by
development/construction
of
the
Any
obligations
that
through
the
production
inventory
are
expensed
as
incurred.
carrying
amount
of
the
related
oil
and
gas
assets
to
the
extent
that
it
was
incurred
by
the
development/construction
of
the
field.
Any
decommissioning
obligations
that
arise
through
the
production
of
inventory
are
expensed
as
incurred.
carrying
amount
ofcapitalised
the
related
oil
and
gas assets
to the
extent
that
it was asset.
incurred
by the development/construction
of
the
field.
Any
decommissioning
obligations
that
arise
through
the
production
of
inventory
are
expensed
as
incurred.
consolidated
income
statement.
Changes
in
the
estimated
timing
of
decommissioning
or
decommissioning
cost
estimates
are
dealt
with
prospectively
found,
are
initially
as
an
exploration
and
evaluation
intangible
Changes
in
the
estimated
timing
of
decommissioning
or
decommissioning
cost
estimates
are
dealt
with
prospectively
the
field.
Any
decommissioning
obligations
that
arise
through
the
production
of
inventory
are
expensed
as
incurred.
Changes
the
estimated
timing
of
decommissioning
or
decommissioning
estimates
are
dealt
with
the
field.
Any
decommissioning
obligations
that
arise
through
the
production
of
inventory
are
expensed
as
incurred.
Changes
in
the
estimated
timing
of
decommissioning
or
decommissioning
cost
estimates
are
dealt
with
prospectively
the
field. in
Any
decommissioning
obligations
that
arise
through
the adjustment
productioncost
of oil
inventory
are
expensed
asprospectively
incurred.
by
recording
an
adjustment
to
the
provision,
and
aa corresponding
to
and
gas
properties.
by
recording
an
adjustment
to
the
provision,
and
corresponding
adjustment
to
oil
and
gas
properties.
Changes
in
the
estimated
timing
of
decommissioning
or
decommissioning
cost
estimates
are
dealt
with
prospectively
by
recording
an
adjustment
to
the
provision,
and
a
corresponding
adjustment
to
oil
and
gas
properties.
Changes
in
the
estimated
timing
of
decommissioning
or
decommissioning
cost
estimates
are
dealt
with
prospectively
by
recording
an
adjustment
to
the
provision,
and
a
corresponding
adjustment
to
oil
and
gas
properties.
If
the
change
in
estimate
results
in
an
increase
in
the
decommissioning
liability
and,
therefore,
an
addition
to the
Changes
in
the
estimated
timing
of
decommissioning
or
decommissioning
cost
estimates
are
dealt
with
prospectively
All
such capitalised
costs are
subject
to technical,
andadjustment
management
review
as well
as review
indicators
Changes
in
estimated
timing
of
decommissioning
or
cost
estimates
are
dealt
with
prospectively
by
recording
an
adjustment
to
the
provision,
and
aa commercial
corresponding
to
oil
and
gas
properties.
Changes
in the
the
estimated
timing
of
decommissioning
or decommissioning
decommissioning
cost
estimates
are
dealt
with for
prospectively
by
recording
an
adjustment
to
the
provision,
and
corresponding
adjustment
to
oil
and
gas
properties.
carrying
value
of
the
asset,
the
Group
considers
whether
this
is
an
indication
of
impairment
of
the
asset
as
a
whole,
and
by
recording
an
adjustment
to
the
provision,
and
a
corresponding
adjustment
to
oil
and
gas
properties.
Any
reduction
in
the
decommissioning
liability
and,
therefore,
any
deduction
from
the
asset
to
which
it
relates,
may
Changes
in
the
estimated
timing
of
decommissioning
or
decommissioning
cost
estimates
are
dealt
with
prospectively
of
impairment
least
once to
a year.
Thisliability
is toand
confirm
the continued
intent toto
or
otherwise
extract
value from
Any
reduction
in
the
decommissioning
and,
therefore,
any
deduction
from
asset
to
which
it
relates,
may
by
recording
an
adjustment
the
aa corresponding
adjustment
oil
gas
properties.
Any
reduction
in
the
decommissioning
liability
and,
therefore,
any
deduction
from
the
asset
to
which
it
relates,
may
by
recording
anat
adjustment
to
the provision,
provision,
and
corresponding
adjustment
todevelop
oil and
andthe
gas
properties.
Any
reduction
in
the
decommissioning
liability
and,
therefore,
any
deduction
from
the
asset
to
which
it
relates,
may
if
so,
tests
for
impairment
in
accordance
with
IAS
36.
If,
for
mature
fields,
the
revised
oil
and
gas
assets,
net
of
not
exceed
the
carrying
amount
of
that
asset.
If
it
does,
any
excess
over
the
carrying
value
is
taken
immediately
to
by
recording
an
adjustment
to
the
provision,
and
a
corresponding
adjustment
to
oil
and
gas
properties.
the
discovery.
When
this
is
no
longer
the
case,
the
costs
are
written
off
to
consolidated
income
statement.
not
exceed
the in
carrying
amount of
of that
that liability
asset. If
Ifand,
it does,
does,
any excess
excess
over the
the carrying
carrying
value
is
taken
immediately
to
Any
reduction
the
decommissioning
therefore,
any
deduction
from
the
asset
to
which
it
relates,
may
not
exceed
the
carrying
amount
asset.
it
any
over
value
is
taken
immediately
to
Any
reduction
in
the
decommissioning
liability
and,
therefore,
any
deduction
from
the
asset
to
which
it
relates,
may
not
exceed
the
carrying
amount
of
that
asset.
If
it
does,
any
excess
over
the
carrying
value
is
taken
immediately
to
decommissioning
provisions
exceed
the
recoverable
value,
that
portion
of
the
increase
is
charged
directly
Any
reduction
in
the
decommissioning
liability
and,
therefore,
any
deduction
from
the
asset
to
which
it
relates,
may
consolidated
income
statement.
consolidated
income
statement.
Any
reduction
in
thestatement.
decommissioning
liability
and,
therefore,
any deduction
deduction
from the
the value
asset is
to taken
whichimmediately
it relates,
relates, may
may
not
exceed
the
carrying
amount
of
that liability
asset.
If
it
does,
any
excess
over
the carrying
to
consolidated
income
Any
reduction
in
the
decommissioning
and,
therefore,
any
from
asset
to
which
it
not
the
carrying
amount
of
asset.
If
it
any
excess
over
carrying
is
to
consolidated
income
Any
reduction
in
thestatement.
decommissioning
and,
therefore,
any deduction
from the value
asset
to taken
whichimmediately
it relates,
may
not exceed
exceed
the
carrying
amount
of that
that liability
asset.
Ifidentified
it does,
does,
any
excess
over the
the
carrying
value
is
taken
immediately
to
When
proved
reserves
ofamount
oil and natural
gas
areIf
and excess
development
is sanctioned
by management,
the relevant
consolidated
income
statement.
not
exceed
the
carrying
of
that
asset.
it
does,
any
over
the
carrying
value
is
taken
immediately
to
not
exceed
the
carrying
amount
of
that
asset.
If
it
does,
any
excess
over
the
carrying
value
is
taken
immediately
to
consolidated
income
statement.
not
exceed
the
carrying
amount
of
that
asset.
If
it
does,
any
excess
over
the
carrying
value
is
taken
immediately
to
consolidated
income
statement.
If
the
change
in
estimate
results
in
an
increase
in
the
decommissioning
liability
and,
therefore,
an
addition
to
the
If
the
change
in
estimate
results
in
an
increase
in
the
decommissioning
liability
and,
therefore,
an
addition
to
consolidated
income
statement.
capitalised
expenditure
is
first
assessed
for
impairment
and
(if
required)
any
impairment
loss
is
recognised,
then
the
If
the
change
in
estimate
results
in
an
increase
in
the
decommissioning
liability
and,
therefore,
an
addition
to
the
consolidated
income
statement.
If
the
change
in
estimate
results
in
an
increase
in
the
decommissioning
liability
and,
therefore,
an
addition
to
the
consolidated
income
statement.
Over
time,
the
discounted
liability
is
increased
for
the
change
in
present
value
based
on
the
discount
rate
that
reflects
carrying
value
of
the
the
Group
considers
this
is
an
indication
of
impairment
of
the asset
as
aa whole,
and
carrying
value
of
the
asset,
the
Group
considers
whether
this
is
an
indication
of
impairment
of
asset
as
and
remaining
balance
isasset,
transferred
to
and gaswhether
properties.
No
amortisation
is charged
during
the
exploration
If
the
change
in
estimate
results
in oil
an
increase
in
the
decommissioning
liability
and,
therefore,
an
addition
to
the
carrying
value
of
the
asset,
the
Group
considers
whether
this
is
an
indication
of
impairment
of the
the
asset
as
a whole,
whole,
and
If
the
change
in
estimate
results
an
increase
in
the
decommissioning
liability
and,
therefore,
an
addition
to
the
carrying
value
of
the
asset,
the
Group
considers
whether
this
is
an
indication
of
impairment
the
asset
as
and
If
the
change
in
estimate
results
in
an
increase
in
the
decommissioning
liability
and,
therefore,
an
addition
to
the
current
market
assessments
and
thein
risks
specific
to
the
liability.
The
periodic
unwinding
ofof
the
discount
isaa whole,
recognised
if
so,
tests
for
impairment
in
accordance
with
IAS
36.
If,
for
mature
fields,
the
revised
oil
and
gas
assets,
net
of
if
so,
tests
for
impairment
in
accordance
with
IAS
36.
If,
for
mature
fields,
the
revised
oil
and
gas
assets,
net
of
If
the
change
in
estimate
results
in
an
increase
in
the
decommissioning
liability
and,
therefore,
an
addition
to
the
evaluation
phase.
carrying
value
of
the
asset,
the
Group
considers
whether
this
is
an
indication
of
impairment
of
the
asset
as
whole,
and
if
so,
tests
for
impairment
in
accordance
with
IAS
36.
If,
for
mature
fields,
the
revised
oil
and
gas
assets,
net
of
If
the
change
in
estimate
results
in
an
increase
in
the
decommissioning
liability
and,
therefore,
an
addition
to
the
carrying
value
of
the
asset,
the
Group
considers
whether
this
is
an
indication
of
impairment
of
the
asset
as
a
whole,
and
if
so,
tests
for
impairment
in
accordance
with
IAS
36.
If,
for
mature
fields,
the
revised
oil
and
gas
assets,
net
of
carrying
value
of
the
asset,
the
Group
considers
whether
this
is
an
indication
of
impairment
of
the
asset
as
a
whole,
and
in
consolidated
income
statement.
decommissioning
provisions
exceed
the
recoverable
value,
that
portion
of
the
increase
is
charged
directly
to
If
the
change
in
estimate
results
in
an
increase
in
the
decommissioning
liability
and,
therefore,
an
addition
to
the
decommissioning
provisions
exceed
the
recoverable
value,
that
portion
of
the
increase
is
charged
directly
to
carrying
value
of
the
asset,
the
Group
considers
whether
this
is
an
indication
of
impairment
of
the
asset
as
a
whole,
and
if
so,
tests
for
impairment
in
accordance
with
IAS
36.
If,
for
mature
fields,
the
revised
oil
and
gas
assets,
net
of
decommissioning
provisions
exceed
the
recoverable
value,
that
portion
of
the
increase
is
charged
directly
to
carrying
value
of
the
asset,
the
Group
considers
whether
this
is
an
indication
of
impairment
of
the
asset
as
a
whole,
and
if
so,
tests
for
impairment
in
accordance
with
IAS
36.
If,
for
mature
fields,
the
revised
oil
and
gas
assets,
net
of
decommissioning
provisions
exceed
the
recoverable
value,
that
portion
of
the
increase
is
charged
directly
to
carrying
value
of
the
asset,
the
Group
considers
whether
this
is
an
indication
of
impairment
of
the
asset
as
a
whole,
and
if
so,
tests
for
impairment
in
accordance
with
IAS
36.
If,
for
mature
fields,
the
revised
oil
and
gas
assets,
net
of
consolidated
income
statement.
consolidated
income
statement.
if
so,
tests
for
impairment
in
accordance
with
IAS
36.
If,
for
mature
fields,
the
revised
oil
and
gas
assets,
net
of
decommissioning
provisions
exceed
the
recoverable
value,
that
portion
of
the
increase
is
charged
directly
to
consolidated
income
statement.
if
so,
tests
for
impairment
in
accordance
with
IAS
36.
If,
for
mature
fields,
the
revised
oil
and
gas
assets,
net
of
decommissioning
provisions
exceed
the
recoverable
value,
that
portion
of
the
increase
is
charged
directly
to
consolidated
income
statement.
decommissioning
provisions
exceed
the
recoverable
value,
that
portion
of
the
increase
is
charged
directly
to
if
so,
tests
for
impairment
in
accordance
with
IAS
36.
If,
for
mature
fields,
the
revised
oil
and
gas
assets,
net
of
decommissioning
provisions
exceed
the
recoverable
value,
that
portion
of
the
increase
is
charged
directly
to
consolidated
income
statement.
decommissioning
provisions
exceed
the
recoverable
value,
that
portion
of
the
increase
is
charged
directly
to
consolidated
income
statement.
decommissioning
provisions
exceed
the
recoverable
value,
that
portion
of
the
increase
is
charged
directly
to
consolidated
income
statement.
Over
time,
the
discounted
liability
is
increased
for
the
change
in
present
value
based
on
the
discount
rate
that
reflects
17
Over
time,
the
discounted
liability
is
increased
for
the
change
in
present
value
based
on
the
discount
rate
that
reflects
consolidated
income
statement.
16
Over
time,
the
discounted
liability
is
increased
for
the
change
in
present
value
based
on
the
discount
rate
that
reflects
consolidated
income
statement.
Over
time,
the
discounted
liability
is
increased
for
the
change
in
present
value
based
on
the
discount
rate
that
reflects
consolidated
income
statement.
current
market
assessments
and
the
risks
specific
to
the
liability.
The
periodic
unwinding
of
the
discount
is
recognised
current
market
assessments
and
the
risks
specific
to
the
liability.
The
periodic
unwinding
of
the
discount
is
recognised
Over
time,
the
discounted
liability
is
increased
for
the
change
in
present
value
based
on
the
discount
rate
that
reflects
current
market
assessments
and
the
risks
specific
to
the
liability.
The
periodic
unwinding
of
the
discount
is
recognised
Over
time,
the
discounted
liability
is
increased
for
the
change
in
present
value
based
on
the
discount
rate
that
reflects
current
market
assessments
and
the
risks
specific
to
the
liability.
The
periodic
unwinding
of
the
discount
is
recognised
Over
time,
the
liability
increased
for
in
present
value
based
discount
rate
reflects
in
consolidated
income
in
consolidated
income statement.
statement.
Over
time,
the discounted
discounted
liability
isrisks
increased
fortothe
the
change
in The
present
valueunwinding
based on
on the
the
discount
rateisthat
that
reflects
current
market
assessments
and theis
specific
thechange
liability.
periodic
of the
discount
recognised
Changes in the estimated timing of decommissioning or decommissioning cost estimates are dealt with prospectively
by recording an adjustment to the provision, and a corresponding adjustment to oil and gas properties.
Any reduction in the decommissioning liability and, therefore, any deduction from the asset to which it relates, may
not exceed the carrying amount of that asset. If it does, any excess over the carrying value is taken immediately to
Kuwait
Foreign
Petroleum Exploration
Company K.S.C. (Closed) and Subsidiaries
consolidated
income
statement.
NOTES TO THE
CONSOLIDATED
FINANCIAL STATEMENTS
NOTES
TO THE
At 31 December
2013 CONSOLIDATED FINANCIAL STATEMENTS
If the
change in estimate
At
31 December
2013 results in an increase in the decommissioning liability and, therefore, an addition to the
carrying value
of the asset,
the Group Exploration
considers whetherCompany
this is an indication
of impairment
the asset
as a whole, and
Kuwait
Foreign
Petroleum
K.S.C.
(Closed)ofand
Subsidiaries
if
so,
tests
for
impairment
in
accordance
with
IAS
36.
If,
for
mature
fields,
the
revised
oil
and
gas
assets, net of
NOTES
TO THE CONSOLIDATED
FINANCIAL
STATEMENTS
2
SIGNIFICANT
ACCOUNTING POLICIES
(continued)
decommissioning provisions exceed the recoverable value, that portion of the increase is charged directly to
At 31 December 2013
consolidated
income statement.
Oil
and gas properties
and other fixed assets (continued)
2Over time,
SIGNIFICANT
ACCOUNTING
POLICIES
(continued)
thedepletion
discounted
liability
is increased
for the change
in present value based on the discount rate that reflects
Depreciation,
and
amortization
current
market
assessments
and
the
risks
specific
to
the
liability.
unwinding ofbasis
the discount
recognised
Oil
and gas
gas properties
properties are
depleted
and amortised The
on aperiodic
unit-of-production
over the istotal
proved
Oil
and
anddepreciated,
other fixed assets
(continued)
in
consolidated
income
statement.
developed and undeveloped reserves of the field concerned. The unit-of-production rate calculation for the
depreciation,
Depreciation,depletion
depletionand
andamortisation
amortizationof field development costs takes into account expenditures incurred to date,
together
withproperties
sanctioned
development
Oilonand
gas reserves, both
proved
developed
and
Oil and gas
are future
depreciated,
depletedexpenditure.
and amortised
a unit-of-production
basis
over the
total proved
17
undeveloped
reserves,
are calculated
using
estimates
provided
the Group's technical
which areforbased
developed and
undeveloped
reserves
ofthe
thelatest
field
concerned.
The byunit-of-production
ratestaff,
calculation
the
on
estimates provided
theamortisation
field operator.
depreciation,
depletionbyand
of field development costs takes into account expenditures incurred to date,
together with sanctioned future development expenditure. Oil and gas reserves, both proved developed and
Other
fixed assets
are generally
depreciated
on latest
a straight-line
over by
their
useful lives
which
is are
generally
undeveloped
reserves,
are calculated
using the
estimatesbasis
provided
theestimated
Group's technical
staff,
which
based
5onyears.
estimates provided by the field operator.
An
item
of oil
andare
gasgenerally
propertiesdepreciated
and other fixed
assets initially
recognised
derecognised
upon
disposal
when no
Other
fixed
assets
on a straight-line
basis
over theirisestimated
useful
lives
which or
is generally
future
5 years.economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset
(calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in
income
the asset isand
derecognised.
An itemstatement
of oil andwhen
gas properties
other fixed assets initially recognised is derecognised upon disposal or when no
future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset
The
asset’s residual
values, useful
livesthe
and
depreciation,
depletion
andamount
amortisation
reviewed
at each
(calculated
as the difference
between
netmethods
disposalofproceeds
and the
carrying
of the are
asset)
is included
in
reporting
period,
and
adjusted
prospectively
if
appropriate.
income statement when the asset is derecognised.
Major
maintenance,
inspection
and
repairs
The asset’s
residual values,
useful
lives
and methods of depreciation, depletion and amortisation are reviewed at each
Expenditure
on major
maintenance
refits, inspections
or repairs comprises the cost of replacement assets or parts of
reporting period,
and adjusted
prospectively
if appropriate.
assets, inspection costs and overhaul costs. Where an asset or part of an asset, that was separately depreciated and is
now
written
off, is replaced
and and
it is repairs
probable that future economic benefits associated with the item will flow to the
Major
maintenance,
inspection
Group,
the
expenditure
is
capitalised.
Where
part of theorasset
replaced
was not
consideredassets
as a component
Expenditure on major maintenance refits,
inspections
repairs
comprises
the separately
cost of replacement
or parts of
and
therefore
not
depreciated
separately,
the
replacement
value
is
used
to
estimate
the
carrying
amount
of the replaced
assets, inspection costs and overhaul costs. Where an asset or part of an asset, that was separately depreciated
and is
asset(s)
which
off. Inspection
associated
with
major maintenance
now written
off,isisimmediately
replaced andwritten
it is probable
that futurecosts
economic
benefits
associated
with the itemprogrammes
will flow to are
the
capitalised
amortisedisover
the period
to thepart
next
All otherwas
day-to-day
repairsconsidered
and maintenance
costs are
Group, the and
expenditure
capitalised.
Where
ofinspection.
the asset replaced
not separately
as a component
expensed
as incurred.
and therefore
not depreciated separately, the replacement value is used to estimate the carrying amount of the replaced
asset(s) which is immediately written off. Inspection costs associated with major maintenance programmes are
Impairment
of oil
and gasover
properties
andtoother
fixedinspection.
assets
capitalised and
amortised
the period
the next
All other day-to-day repairs and maintenance costs are
The
Groupas assesses
expensed
incurred.at each reporting date whether there is an indication that an asset or a cash-generating unit
(“CGU”) may be impaired. The Group classifies fields either in production or under development as CGUs. If any
indication
exists,
when
impairment
testing
an asset is required, the Group estimates the asset’s or CGU’s
Impairment
of oilorand
gasannual
properties
and other
fixedfor
assets
recoverable
amount.
Recoverable
amount
is
the
higher
of
an is
asset’s
or CGU’sthat
fair an
value
lessorcosts
to sell and valueunit
in
The Group assesses at each reporting date whether there
an indication
asset
a cash-generating
use
and
is
determined
for
an
individual
asset,
unless
the
asset
does
not
generate
cash
inflows
that
are
largely
(“CGU”) may be impaired. The Group classifies fields either in production or under development as CGUs. If any
independent
of those
from annual
other assets
or groups
of assets,
which
case, thethe
asset
is tested
as parttheofasset’s
a largerorCGU
to
indication exists,
or when
impairment
testing
for an in
asset
is required,
Group
estimates
CGU’s
itrecoverable
belongs. amount. Recoverable amount is the higher of an asset’s or CGU’s fair value less costs to sell and value in
use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely
Where
the carrying
of a CGU
itsofrecoverable
amount,
thethe
CGU
is is
considered
and is CGU
written
independent
of thoseamount
from other
assetsexceeds
or groups
assets, in which
case,
asset
tested as impaired
part of a larger
to
down
to its recoverable amount. In calculating value in use, the estimated future cash flows are discounted to their
it belongs.
present value using a discount rate that reflects current market assessments of the time value of money and the risks
specific
to the
CGU.amount
In determining
value its
lessrecoverable
costs to sell,
recentthe
market
areimpaired
taken into
if
Where the
carrying
of a CGUfair
exceeds
amount,
CGUtransactions
is considered
andaccount,
is written
available.
If
no
such
transactions
can
be
identified,
an
appropriate
valuation
model
is
used.
These
calculations
are
down to its recoverable amount. In calculating value in use, the estimated future cash flows are discounted to their
corroborated
valuation
multiples,
quoted
share
pricesmarket
for publicly
traded of
subsidiaries
or other
available
present valueby
using
a discount
rate that
reflects
current
assessments
the time value
of money
andfair
thevalue
risks
indicators.
specific to the CGU. In determining fair value less costs to sell, recent market transactions are taken into account, if
available. If no such transactions can be identified, an appropriate valuation model is used. These calculations are
The
recoverability
of the amounts
which share
CGUsprices
eitherforinpublicly
production
or under
development
recorded
the
corroborated
by valuation
multiples,atquoted
traded
subsidiaries
or otherand
available
fair invalue
accounts
indicators.is assessed on a CGU-by-CGU basis against the likely discounted future net revenues to be derived from the
estimated remaining commercial reserves. Future net revenues are computed using prices and costs according to
management's
forecast
at the
year end.
provision
made where
the comparison
impairment
in the carrying
The recoverability
of the
amounts
at A
which
CGUsis either
in production
or underindicates
development
and recorded
in the
value
of
the
interests.
accounts is assessed on a CGU-by-CGU basis against the likely discounted future net revenues to be derived from the
estimated remaining commercial reserves. Future net revenues are computed using prices and costs according to
management's forecast at the year end. A provision is made where the comparison indicates impairment in the carrying
value of the interests.
18
44
Kuwait Foreign Petroleum Exploration Company K.S.C. (Closed) And Subsidiaries
Kuwait
Foreign Petroleum Exploration Company K.S.C. (Closed) and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES
TO THE
At 31 December
2013 CONSOLIDATED FINANCIAL STATEMENTS
At 31 December 2013
2
SIGNIFICANT ACCOUNTING POLICIES (continued)
Oil and gas properties and other fixed assets (continued)
Impairment of oil and gas properties and other fixed assets (continued)
For CGUs excluding goodwill, an assessment is made at each reporting date as to whether there is any indication that
previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the
Group estimates the asset’s or CGU’s recoverable amount. A previously recognized impairment loss is reversed only if
there has been a change in the assumptions used to determine the CGU’s recoverable amount since the last impairment
loss was recognised. The reversal is limited so that the carrying amount of the CGU does not exceed its recoverable
amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss
been recognised for the CGU in prior years. Such a reversal is recognised in consolidated income statement unless the
asset is carried at a revalued amount, in which case, the reversal is treated as a revaluation increase and is recognised
through consolidated statement of comprehensive income.
Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it
is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a
reliable estimate can be made of the amount of the obligation. The expense relating to any provision is presented in
consolidated income statement net of any reimbursement.
Employees’ end of service benefits
Provision is made for amounts payable to employees under the Kuwaiti Labor Law, the Kuwait Social Security Law
and the Group’s terms of employment. The provision, which is unfunded, is determined as the liability that would arise
as a result of the involuntary termination of staff at the consolidated statement of financial position date, on the basis
that this computation is a reliable approximation of the present value of this obligation.
Foreign currencies
The individual financial statements of the Group entity are presented in the currency of the primary economic
environment in which the entity operates (its functional currency). For the purpose of the consolidated financial
statements, the results and financial position of each entity are expressed in United States Dollars (“USD”), which is
the functional currency of the Parent Company. The presentation currency for these consolidated financial statements
is the Kuwaiti Dinar (“KD”).
In preparing the consolidated financial statements of the individual entities, transactions in currencies other than the
entity's functional currency (foreign currencies) are recorded at the rates of exchange prevailing at the dates of the
transactions. At each consolidated statement of financial position date, monetary items denominated in foreign
currencies are retranslated at the rates prevailing at the consolidated statement of financial position date. Nonmonetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at
the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a
foreign currency are not retranslated.
Exchange differences are recognised in the consolidated income statement in the period in which they arise except for
exchange differences on monetary items receivable from or payable to a foreign operation for which settlement is
neither planned nor likely to occur, which form part of the net investment in a foreign operation, and which are
recognised in the foreign currency translation reserve and recognised in consolidated income statement on disposal of
the net investment.
For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group's foreign
operations are expressed in KD using exchange rates prevailing at the consolidated statement of financial position
date. Income and expense items are translated at the average exchange rates for the period, unless exchange rates
fluctuated significantly during that period, in which case the exchange rates at the dates of the transactions are used.
Exchange differences arising, if any, are classified as equity and transferred to the Group's foreign currency translation
reserve. Such exchange differences are recognised in the consolidated income statement in the period in which the
foreign operation is disposed of.
45
19
Kuwait
Foreign
Petroleum Exploration
Company K.S.C. (Closed) and Subsidiaries
NOTES TO
THE CONSOLIDATED
FINANCIAL STATEMENTS
NOTES
TO THE
At 31 December
2013 CONSOLIDATED FINANCIAL STATEMENTS
At 31 December 2013
2
SIGNIFICANT ACCOUNTING POLICIES (continued)
Revenue recognition
Revenue is recognised to the extent it is probable that the economic benefits will flow to the Group and the revenue
can be reliably measured. Revenue is measured at the fair value of the consideration received, excluding discounts,
sales taxes, excise duties and similar levies.
Revenue from the sale of oil and petroleum products is recognised when the significant risks and rewards of ownership
have been transferred, which is considered to occur when title passes to the customer. This generally occurs when the
product is physically transferred into a vessel, pipe or other delivery mechanism.
Revenue from the production of oil, in which the Group has an interest with other producers, is recognised based on
the Group’s working interest and the terms of the relevant production sharing contracts. Where forward sale and
purchase contracts for oil or natural gas have been determined to be for trading purposes, the associated sales and
purchases are reported net.
Under adjusting revenue method, the excess of product sold during the period over the participant’s ownership share
of production from the property is recognised by the overlift party as a liability (deferred revenue) and not as revenue.
The following criteria are also applicable to other specific revenue transactions:
Take or pay contracts
Under these contracts, the Group makes a long-term supply commitment in return for a commitment from the buyer to
pay for minimum quantities, whether or not the customer takes delivery. These commitments contain protective (force
majeure) and adjustment provisions. If a buyer has a right to get a “make up” delivery at a later date, revenue
recognition is deferred and only recognised when the product is delivered, or the make-up product can no longer be
taken. If no such option exists within the contractual terms, revenue is recognised when the take or pay penalty is
triggered.
Royalties
Royalties are accounted for in the consolidated income statement in the same period as the income to which they relate
and are included within operating expenses. Royalty arrangements that are based on production, sales and other
measures are recognised by reference to the underlying arrangement.
Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a
substantial period of time to get ready for its intended use or sale (a qualifying asset) are capitalised as part of the cost
of the respective assets. Borrowing costs consist of interest and other costs that an entity incurs in connection with the
borrowing of funds. Where funds are borrowed specifically to finance a project, the amount capitalised represents the
actual borrowing costs incurred. Where surplus funds are available for a short term out of money borrowed
specifically to finance a project, the income generated from the temporary investment of amounts is also capitalised
and deducted from the total capitalised borrowing cost. Where the funds used to finance a project form part of general
borrowings, the amount capitalised is calculated using a weighted average of rates applicable to relevant general
borrowings of the Group during the period.
All other borrowing costs are recognised in consolidated income statement in the period in which they are incurred.
Even though exploration and evaluation assets can be qualifying assets, they generally do not meet the “probable
economic benefits” test and also are rarely debt funded. Any related borrowing costs are therefore generally recognised
in profit or loss in the period they are incurred.
Taxation
Certain of the Parent Company's subsidiaries are subject to taxes on income in various foreign jurisdictions. Income
tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the
consolidated income statement because it excludes items of income or expense that are taxable or deductible in other
years and it further excludes items that are never taxable or deductible. The subsidiaries’ liability for current tax is
calculated using tax rates that have been enacted or substantively enacted by the consolidated statement of financial
position date.
20
46
Kuwait Foreign Petroleum Exploration Company K.S.C. (Closed) And Subsidiaries
Kuwait Foreign Petroleum Exploration Company K.S.C. (Closed) and Subsidiaries
NOTES TO
THE
CONSOLIDATED
FINANCIAL
STATEMENTS
NOTES
TO
THE
CONSOLIDATED
FINANCIAL
STATEMENTS
At 31 December 2013
At 31 December 2013
2
SIGNIFICANT ACCOUNTING POLICIES (continued)
Taxation (continued)
Deferred tax
Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the consolidated
financial statements and the corresponding tax bases used in the computation of taxable profit, and are accounted for
using the consolidated statement of financial position liability method. Deferred tax liabilities are generally recognised
for all taxable temporary differences, and deferred tax assets are generally recognised for all deductible temporary
differences to the extent that it is probable that taxable profits will be available against which those deductible
temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises
from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a
transaction that affects neither the taxable profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each consolidated statement of financial position date and
reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of
the asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the
liability is settled or the asset realized, based on tax rates (and tax laws) that have been enacted or substantively
enacted by the consolidated statement of financial position date. The measurement of deferred tax liabilities and assets
reflects the tax consequences that would follow from the manner in which the Group expects, at the consolidated
statement of financial position date, to recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against
current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends
to settle its current tax assets and liabilities on a net basis.
Current and deferred tax for the period
Current and deferred tax are recognised as an expense or income in the consolidated income statement, except when
they relate to items recognized in equity, or where they arise from the initial accounting for a business combination. In
the case of a business combination, the tax effect is taken into account in calculating goodwill or in determining the
excess of the acquirer's interest in the net fair value of the acquiree's identifiable assets, liabilities, and contingent
liabilities over cost.
Accounting of leases
Where the Group is the lessee
Operating leases
Leases of assets under which all the risks and benefits of ownership are effectively retained by the lessor are classified
as operating leases. Payments made under operating leases are charged to the consolidated income statement on a
straight-line basis over the period of the lease.
Significant accounting judgements, estimates and assumptions
The preparation of the Group’s consolidated financial statements in conformity with IFRS requires management to
make judgements, estimates and assumptions that affect the reported amounts of assets and liabilities and the
disclosure of contingent liabilities at the date of the consolidated financial statements, and the reported amounts of
revenues and expenses during the reporting period. Estimates and assumptions are continuously evaluated and are
based on management’s experience and other factors, including expectations of future events that are believed to be
reasonable under the circumstances. However, actual outcomes can differ from these estimates if different assumptions
were used and different conditions existed.
In particular, the Group has identified the following areas where significant judgements, estimates and assumptions are
required, and where if actual results were to differ, may materially affect the financial position or financial results
reported in future periods. Further information on each of these and how they impact the various accounting policies
are described in the relevant notes to the consolidated financial statements.
47
21
Kuwait
Foreign Petroleum Exploration Company K.S.C. (Closed) and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES
TO THE
At 31 December
2013 CONSOLIDATED FINANCIAL STATEMENTS
At 31 December 2013
2
SIGNIFICANT ACCOUNTING POLICIES (continued)
Significant accounting judgements, estimates and assumptions (continued)
Reserve and resource estimates
Oil and gas production properties are depreciated on a units of production basis at a rate calculated by reference to
total proved developed and undeveloped reserves determined using the latest estimates provided by the Group’s
technical staff, which are based on estimates provided by the field operator. Commercial reserves are determined using
estimates of oil in place, recovery factors and future oil prices, the latter having an impact on the total amount of
recoverable reserves and the proportion of the gross reserves which are attributable to the host government under the
terms of the Production-Sharing Agreements. Future development costs are estimated using assumptions as to the
number of wells required to produce the commercial reserves, the cost of such wells and associated production
facilities, and other capital costs.
As the economic assumptions used may change and as additional geological information is produced during the
operation of a field, estimates of recoverable reserves may change. Such changes may impact the Group’s reported
financial position and results which include:

The carrying value of exploration and evaluation assets, oil and gas properties, property, other fixed assets
and goodwill may be affected due to changes in estimated future cash flows

Depreciation, depletion and amortisation charges in consolidated income statement may change where such
charges are determined using the units of production method, or where the useful life of the related assets
change

Provisions for decommissioning may change - where changes to the reserve estimates affect expectations
about when such activities will occur and the associated cost of these activities

The recognition and carrying value of deferred income tax assets may change due to changes in the
judgements regarding the existence of such assets and in estimates of the likely recovery of such assets
Exploration and evaluation expenditures
The application of the Group’s accounting policy for exploration and evaluation expenditure requires judgement in
determining whether it is likely that future economic benefits are likely either from future exploitation or sale or where
activities have not reached a stage which permits a reasonable assessment of the existence of reserves. The
determination of reserves and resources is itself an estimation process that requires varying degrees of uncertainty
depending on sub-classification and these estimates directly impact the point of deferral of exploration and evaluation
expenditure. The deferral policy requires management to make certain estimates and assumptions as to future events
and circumstances, in particular whether an economically viable extraction operation can be established. Any such
estimates and assumptions may change as new information becomes available. If, after expenditure is capitalised,
information becomes available suggesting that the recovery of the expenditure is unlikely, the relevant capitalised
amount is written off in consolidated income statement in the period when the new information becomes available.
Units of production depreciation of oil and gas properties
Oil and gas properties are depreciated using the units of production (UOP) method over total proved developed and
undeveloped resource reserves. This results in a depreciation, depletion and amortisation charge proportional to the
depletion of the anticipated remaining production from the field.
Each items’ life, which is assessed annually, has regard to both its physical life limitations and to present assessments
of economically recoverable reserves of the field at which the asset is located. These calculations require the use of
estimates and assumptions, including the amount of recoverable reserves and estimates of future capital expenditure.
The calculation of the UOP rate of depreciation could be impacted to the extent that actual production in the future is
different from current forecast production based on total proved reserves, or future capital expenditure estimates
changes. Changes to proved reserves could arise due to changes in the factors or assumptions used in estimating
reserves, including:
The effect on proved reserves of differences between actual commodity prices and commodity price
assumptions, or
 Unforeseen operational issues
Changes are accounted for prospectively.

22
48
Kuwait Foreign Petroleum Exploration Company K.S.C. (Closed) And Subsidiaries
Kuwait
Foreign
Petroleum Exploration
Company K.S.C. (Closed) and Subsidiaries
NOTES TO
THE CONSOLIDATED
FINANCIAL STATEMENTS
NOTES
TO THE
At 31 December
2013 CONSOLIDATED FINANCIAL STATEMENTS
At 31 December 2013
2
SIGNIFICANT ACCOUNTING POLICIES (continued)
Significant accounting judgements, estimates and assumptions (continued)
Recoverability of oil and gas properties
The Group assesses each asset or cash generating unit (CGU) (excluding goodwill, which is assessed annually
regardless of indicators) every reporting period to determine whether any indication of impairment exists.
Where an indicator of impairment exists, a formal estimate of the recoverable amount is made, which is considered to
be the higher of the fair value less costs to sell and value in use. These assessments require the use of estimates and
assumptions such as long-term oil prices (considering current and historical prices, price trends and related factors),
discount rates, operating costs, future capital requirements, decommissioning costs, exploration potential, reserves
estimates and operating performance (which includes production and sales volumes). These estimates and assumptions
are subject to risk and uncertainty. Therefore, there is a possibility that changes in circumstances will impact these
projections, which may impact the recoverable amount of assets and/or CGUs
Fair value is determined as the amount that would be obtained from the sale of the asset in an arm’s length transaction
between knowledgeable and willing parties. Fair value for oil and gas assets is generally determined as the present
value of estimated future cash flows arising from the continued use of the assets, which includes estimates such as the
cost of future expansion plans and eventual disposal, using assumptions that an independent market participant may
take into account. Cash flows are discounted to their present value using a discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset. Management has assessed its CGUs as being
an individual field, which is the lowest level for which cash inflows are largely independent of those of other assets.
Decommissioning costs
Decommissioning costs will be incurred by the Group at the end of the operating life of some of the Group’s facilities
and properties. The Group assesses its decommissioning provision at each reporting date. The ultimate
decommissioning costs are uncertain and cost estimates can vary in response to many factors, including changes to
relevant legal requirements, the emergence of new restoration techniques or experience at other production sites. The
expected timing, extent and amount of expenditure can also change, for example in response to changes in reserves or
changes in laws and regulations or their interpretation. Therefore, significant estimates and assumptions are made in
determining the provision for decommissioning. As a result, there could be significant adjustments to the provisions
established which would affect future financial results. The provision at reporting date represents management’s best
estimate of the present value of the future decommissioning costs required.
Recovery of deferred income tax assets
Judgement is required to determine which types of arrangements are considered to be a tax on income in contrast to an
operating cost. Judgement is also required in determining whether deferred income tax assets are recognised in the
statement of financial position. Deferred income tax assets, including those arising from un-utilised tax losses, require
management to assess the likelihood that the Group will generate sufficient taxable earnings in future periods, in order
to utilise recognised deferred income tax assets. Assumptions about the generation of future taxable profits depend on
management’s estimates of future cash flows. These estimates of future taxable income are based on forecast cash
flows from operations (which are impacted by production and sales volumes, oil and natural gas prices, reserves,
operating costs, decommissioning costs, capital expenditure, dividends and other capital management transactions) and
judgement about the application of existing tax laws in each jurisdiction. To the extent that future cash flows and
taxable income differ significantly from estimates, the ability of the Group to realise the net deferred income tax assets
recorded at the reporting date could be impacted.
In addition, future changes in tax laws in the jurisdictions in which the Group operates could limit the ability of the
Group to obtain tax deductions in future periods.
Contingencies
By their nature, contingencies will only be resolved when one or more uncertain future events occur or fail to occur.
The assessment of the existence, and potential quantum, of contingencies inherently involves the exercise of
significant judgement and the use of estimates regarding the outcome of future events.
49
23
Kuwait
Foreign
Petroleum Exploration
Company K.S.C. (Closed) and Subsidiaries
NOTES TO
THE CONSOLIDATED
FINANCIAL STATEMENTS
NOTES
TO THE
At 31 December
2013 CONSOLIDATED FINANCIAL STATEMENTS
At 31 December 2013
2
SIGNIFICANT ACCOUNTING POLICIES (continued)
Significant accounting judgements, estimates and assumptions (continued)
Joint arrangements
Judgment is required to determine when the Group has joint control over an arrangement, which requires an
assessment of the relevant activities and when the decisions in relation to those activities require unanimous consent.
The Group has determined that the relevant activities for its joint arrangements are those relating to the operating and
capital decisions of the arrangement, such as approval of the capital expenditure program for each year and appointing,
remunerating and terminating the key management personnel or service providers of the joint arrangement. The
considerations made in determining joint control are similar to those necessary to determine control over subsidiaries.
Judgment is also required to classify a joint arrangement. Classifying the arrangement requires the Group to assess
their rights and obligations arising from the arrangement. Specifically, the Group considers:

The structure of the joint arrangement – whether it is structured through a separate vehicle

When the arrangement is structured through a separate vehicle, the Group also considers the rights and
obligations arising from:
o
o
o
The legal form of the separate vehicle
The terms of the contractual arrangement
Other facts and circumstances (when relevant).
Kuwait
Foreign
Petroleum
Exploration
Company
K.S.C. on
(Closed)
and
This assessment
often requires
significant
judgment, and
a different conclusion
joint control
andSubsidiaries
also whether the
arrangement
is aTHE
joint operation
or a joint venture,FINANCIAL
may materially impact
the accounting.
NOTES
TO
CONSOLIDATED
STATEMENTS
At 31 December 2013
3
BUSINESS COMBINATIONS
The group acquired 100% of the share capital of Risco Energy Pte. Ltd. (“Risco”) and Norske AEDC AS
(“Norske”) on 4 March 2013 and 16 June 2013 for cash and deferred consideration of KD 67,876 thousand and
KD 28,319 thousand respectively.
The acquisition has been accounted for in accordance with IFRS 3: Business combinations (“IFRS 3”). The
consideration paid and the fair values of assets acquired and liabilities assumed are summarized as follows:
Assets
Intangible assets
Oil and gas properties
Investment in associate
Deferred tax assets
Inventories
Other current assets
Cash and cash equivalents
Liabilities
Trade and other payable
Deferred tax liabilities
Decommissioning provision
Net assets acquired
Consideration paid by cash
24
Risco
KD 000's
Norske
KD 000's
Total
KD 000's
11,240
47,582
7,777
2,054
6,550
3,274
──────
78,477
──────
13,131
18,837
39
11,844
667
──────
44,518
──────
11,240
60,713
7,777
18,837
2,093
18,394
3,941
──────
122,995
──────
(5,391)
(13,028)
(1,261)
──────
58,797
──────
67,876
(805)
(10,233)
(24,632)
──────
8,848
──────
6,347
(6,196)
(23,261)
(25,893)
──────
67,645
──────
74,223
50
Intangible assets
11,240
11,240
Oil and gas properties
47,582
13,131
60,713
Investment in associate
7,777
7,777
Kuwait Foreign Petroleum Exploration
Company K.S.C. (Closed)
And Subsidiaries
Deferred tax assets
18,837
18,837
Inventories
2,054 (Closed) and
39 Subsidiaries
2,093
Kuwait
Foreign
Petroleum Exploration
Company K.S.C.
NOTES
TO
THE CONSOLIDATED
FINANCIAL STATEMENTS
Other
current
assets
6,550
11,844
18,394
NOTES
TO
THE
CONSOLIDATED
FINANCIAL
STATEMENTS
At 31 December 2013
Cash
cash equivalents
3,274
667
3,941
At
31and
December
2013
──────
──────
──────
78,477
44,518
122,995
3
BUSINESS COMBINATIONS (continued)
──────
──────
──────
As
a result of Risco and Norske becoming subsidiaries, the consolidated income statement of the Group includes the
Liabilities
following
and expenses from the date of exercise of control: (5,391)
Trade and income
other payable
(805)
(6,196)
Deferred tax liabilities
(13,028)
(10,233)
(23,261)
Decommissioning provision
(1,261)
(24,632)
(25,893)
──────
──────
──────
Risco
Norske
Total
58,797
8,848
67,645
Net assets acquired
KD
000's
KD
000's
KD
000's
──────
──────
──────
Consideration paid by cash
67,876
6,347
74,223
Revenue
21,660
810
22,470
Deferred consideration liability (a)
21,972
21,972
Cost of operations
(13,323)
(952)
(14,275)
──────
──────
──────
──────
──────
──────
Goodwill on acquisition (Note 11)
9,079
19,471
28,550
8,337
(142)
8,195
GROSS PROFIT/(LOSS)
══════
══════
══════
──────
──────
──────
Exploration expenditure written off
(633)
(1,040)
(1,673)
Net
impairment
losses
(2,141)
(2,141)
Consideration paid by cash (b)
67,876
6,347
74,223
General
administrative
expenses
(102)
(611)
(713)
Cash andand
cash
equivalents in
subsidiaries acquired
(3,274)
(667)
(3,941)
Kuwait Foreign Petroleum Exploration Company
K.S.C.
(Closed)
and
Subsidiaries
──────
──────
──────
──────
──────
──────
5,461
(1,793)
3,668
PROFIT/(LOSS)
FROM
OPERATIONS
NOTES
TOonTHE
CONSOLIDATED
FINANCIAL STATEMENTS
Cash outflow
acquisition
64,602
5,680
70,282
At 31 December 2013
══════
══════
══════
Income tax (expense) credit
(3,409)
12,918
9,509
Total consideration (a+b)
67,876
28,319
96,195
──────
──────
──────
3
BUSINESS COMBINATIONS (continued)
══════
══════
══════
PROFIT/(LOSS) FOR THE PERIOD
2,052
11,125
13,177
As a result of Risco and Norske becoming subsidiaries, the consolidated
income statement
of the Group
includes the
══════
══════
══════
following income and expenses from the date of exercise of control:
Acquisition-related costs are charged to consolidated income statement of the Group.
Had the business combinations taken place at the beginning of the year, revenue of the Group would have been higher
Norske
Total
by KD 7,509 thousand and profit would have been lower by KD 2,160Risco
thousand.
KD 000's
KD 000's
KD 000's
Valuation methodology and assumptions
All
fair values calculated for the purpose of IFRS 3 are classified as Level
with IFRS 1322,470
Fair Value
Revenue
21,6603 in accordance810
Measurement.
The
following
table
summarises
the
techniques
used
to
arrive
at
fair
value
and
certain
key
assumptions.
Cost of operations
(13,323)
(952)
(14,275)
──────
──────
──────
Valuation
8,337technique
(142)
8,195
GROSS PROFIT/(LOSS)
25
──────
──────
──────
Exploration and evaluation assets
Discounted cash flow
Exploration expenditure written off
(633)
(1,040)
(1,673)
Oil and gas properties
Discounted cash flow
Net impairment losses
(2,141)
(2,141)
Investment in associate
Cost of Share Acquisitions to the seller less share of
General and administrative expenses
(102)
(611)
(713)
accumulated losses
──────
──────
──────
Inventories
Actuals at the date of completion
5,461
(1,793)
3,668
PROFIT/(LOSS)
Other
current assetsFROM OPERATIONS
Actuals at
the date of completion
Provisions
Income tax Consideration
(expense) credit
Contingent
Actuals at the date of completion
(3,409)
12,918
9,509
Discounted
cash flow
──────
──────
──────
All other items
Actuals at the date of completion
PROFIT/(LOSS) FOR THE PERIOD
2,052
11,125
13,177
══════
══════
══════
The Norske acquisition has been accounted for based on the provisional fair values of the net assets acquired. There
were no other acquisitions involving business combinations during 2013.
Acquisition-related costs are charged to consolidated income statement of the Group.
Had the business combinations taken place at the beginning of the year, revenue of the Group would have been higher
by KD 7,509 thousand and profit would have been lower by KD 2,160 thousand.
Valuation methodology and assumptions
All fair values calculated for the purpose of IFRS 3 are classified as Level 3 in accordance with IFRS 13 Fair Value
Measurement. The following table summarises the techniques used to arrive at fair value and certain key assumptions.
51
Exploration and evaluation assets
26
Valuation technique
Discounted cash flow
PROFIT/(LOSS) FOR THE PERIOD
2,052
══════
11,125
══════
13,177
══════
Acquisition-related costs are charged to consolidated income statement of the Group.
Kuwait
Foreign
Petroleum
Company
K.S.C.
and
Subsidiaries
Had the business
taken Exploration
place
at the beginning
of the year,
revenue(Closed)
of the Group
would
have been higher
NOTES
TO
THEcombinations
CONSOLIDATED
FINANCIAL
STATEMENTS
by
7,509
thousand
profit would have been
lower by KD 2,160
thousand.
NOTES
TO
THE
CONSOLIDATED
FINANCIAL
STATEMENTS
At KD
31 December
2013 and
At 31 December 2013
Valuation methodology and assumptions
All
values calculated
for the purpose(continued)
of IFRS 3 are classified as Level 3 in accordance with IFRS 13 Fair Value
3 fairBUSINESS
COMBINATIONS
Measurement. The following table summarises the techniques used to arrive at fair value and certain key assumptions.
As a result of Risco and Norske becoming subsidiaries, the consolidated income statement of the Group includes the
Valuation technique
following income and expenses from the date of exercise of control:
Exploration and evaluation assets
Oil and gas properties
Investment in associate
Inventories
Other
current assets
Revenue
Provisions
Cost of operations
Contingent Consideration
All
other PROFIT/(LOSS)
items
GROSS
Discounted cash flow
Discounted cash flow
Cost ofRisco
Share Acquisitions
to the seller lessTotal
share of
Norske
accumulated
losses
KD 000's
KD 000's
KD 000's
Actuals at the date of completion
Actuals21,660
at the date of completion
810
22,470
Actuals(13,323)
at the date of completion
(952)
(14,275)
Discounted
cash flow ──────
──────
──────
Actuals at
the
8,337date of completion
(142)
8,195
Kuwait Foreign Petroleum Exploration Company
K.S.C. (Closed)
and Subsidiaries
──────
──────
──────
The
NorskeTO
acquisition
has
beenoff
accounted for based
on the provisional
fair
values of the(1,040)
net assets acquired.
There
Exploration
expenditure
written
(633)
(1,673)
NOTES
THE CONSOLIDATED
FINANCIAL
STATEMENTS
were no other acquisitions involving business combinations during 2013.
(2,141)
(2,141)
General and administrative expenses
(102)
(611)
(713)
──────
──────
──────
4
DISCONTINUED OPERATIONS
5,461
(1,793)
3,668
PROFIT/(LOSS) FROM OPERATIONS
On 21 June 2013, the Group sold 100% interest in KUFPEC Indonesia (Pangkah) BV (“Pangkah”) for a cash
consideration
of KD 66,183
no longer exercises
control over Pangkah.
Income tax (expense)
credit thousand. As a result of this sale, the Group
(3,409)
12,918
9,509
Net31
impairment
At
Decemberlosses
2013
The loss on disposal is calculated as follows:
PROFIT/(LOSS) FOR THE PERIOD
──────
2,052
══════
──────
11,125
══════
26
Acquisition-related costs are charged to consolidated income statement of the Group.
──────
13,177
══════
2013
KD 000's
Had the
combinations taken place at the beginning of the year, revenue of the Group would have
been higher
Total
salebusiness
consideration
66,183
by KD 7,509 thousand and profit would have been lower by KD 2,160 thousand.
Net assets of subsidiary at date of disposal
(87,159)
───────
Valuation methodology and assumptions
Loss
on values
disposalcalculated for the purpose of IFRS 3 are classified as Level 3 in accordance with IFRS(20,976)
All fair
13 Fair Value
Measurement. The following table summarises the techniques used to arrive at fair value and certain═══════
key assumptions.
In accordance with IFRS 5, the disposal of Pangkah is classified
as a discontinued
Valuation
technique operation. The results of the
subsidiary until the date of disposal are presented below:
Exploration and evaluation assets
Discounted cash flow
Oil and gas properties
Discounted cash flow
2013
Investment in associate
Cost of Share Acquisitions
to the seller less2012
share of
KD
000's
KD 000's
accumulated losses
Inventories
Actuals at the date of completion
Other current assets
Actuals at the date of completion
Revenue
29,085
10,771
Provisions
Actuals at the date of completion
Cost
of
sales
(25,332)
(10,544)
Contingent Consideration
Discounted cash flow
All other items
Actuals at the date───────
of completion ───────
3,753
GROSS PROFIT
227
The Norske acquisition has been accounted for based on the provisional fair values of the net assets acquired. There
Exploration
expenditure
written
off business combinations during 2013.
(180)
(106)
were no other
acquisitions
involving
Net impairment losses
(35,763)
General and administrative expenses
(43)
(18)
───────
───────
(32,233)
PROFIT (LOSS) FROM DISCONTINUED OPERATIONS
103
───────
───────
Other income
151
Foreign exchange gain (loss)
(69)
70
───────
───────
PROFIT (LOSS) BEFORE TAX FROM A DISCONTINUED
26
(32,151)
OPERATION
173
Income tax expense
-
52
GROSS PROFIT
227
3,753
Exploration expenditure written off
(180)
(106)
Kuwait Foreign Petroleum Exploration Company K.S.C.
Subsidiaries
Net impairment losses
- (Closed) And(35,763)
General and administrative expenses
(43)
(18)
Kuwait
Foreign
Petroleum Exploration
Company K.S.C. (Closed)
and Subsidiaries
NOTES TO
THE CONSOLIDATED
FINANCIAL STATEMENTS
───────
───────
NOTES
TO THE
CONSOLIDATED
FINANCIAL STATEMENTS 103
At
31 December
2013
(32,233)
PROFIT
(LOSS)
FROM
DISCONTINUED OPERATIONS
At 31 December 2013
───────
70
───────
Other income
4ForeignDISCONTINUED
OPERATIONS (continued)
exchange gain (loss)
The net assets of Pangkah at the date of disposal were as follows:
PROFIT (LOSS) BEFORE TAX FROM A DISCONTINUED
OPERATION
Kuwait
Foreign Petroleum Exploration Company
Income tax expense
───────
151
(69)
───────
(32,151)
173and Subsidiaries
K.S.C. (Closed)
2013
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
───────
At 31 December 2013
PROFIT plant
(LOSS)
THE PERIOD /YEAR FROM A
Property,
andFOR
equipment
DISCONTINUED OPERATION
Cash and
bank balances OPERATIONS (continued)
4
DISCONTINUED
Trade and other receivables
The
net assets of Pangkah at the date of disposal were as follows:
Inventories
Trade and other payables
Decommissioning provision
KD 000's
───────
91,333
(32,151)
6
═══════
4,581
1,980
(6,998)
2013
(3,743)
KD
000's
───────
Net assets
87,159
Property, plant and equipment
91,333
═══════
Cash and bank balances
6
Trade
and other
As Pangkah
wasreceivables
sold prior to 31 December 2013, related assets and liabilities are not included in the 4,581
consolidated
Inventories
1,980
statement of financial position as at 31 December 2013.
Trade and other payables
(6,998)
Decommissioning
provision
(3,743)
Net cash flow from disposal of the discontinued operation:
2013
───────
27
KD 000’s
Net assets
87,159
Consideration received
66,183
═══════
Less: net cash disposed off with the discontinued operation
(6)
────────
As Pangkah was sold prior to 31 December 2013, related assets and liabilities are not included in the consolidated
66,177
statement of financial position as at 31 December 2013.
173
═══════
════════
Net
flowflows
fromincurred
disposalbyofthe
thediscontinued
discontinued
operation:
The cash
net cash
operation
are as follows:
Consideration received
Less:
net cash disposed off with the discontinued operation
Operating
Investing
Net cash inflow
The net cash flows incurred by the discontinued operation are as follows:
5
CASH AND CASH EQUIVALENTS
Operating
Investing
2012
KD 000’s
────────
════════
────────
Less: restricted bank balance
Cash and cash equivalents
Cash on hand
Cash at bank
Less: restricted bank balance
Cash and cash equivalents
2013
KD 000’s
4,411
(5,377)
4,411
2013
(5,377)
KD 000's
Net cash inflow
Cash on hand
Cash at bank
5
CASH AND CASH EQUIVALENTS
53
(966)
2013
KD2012
000’s
KD 000’s
66,183
(6)
4,929
────────
4,731
66,177
────────
════════
9,660
2013
KD 000’s
28
(966)
1,717
════════
39,002
───────
40,719
(11)
2013
───────
KD
000's
40,708
═══════
1,717
39,002
───────
40,719
(11)
───────
40,708
═══════
════════
4,929
2012
4,731
KD
000's
────────
9,660
1,115
61,580
───────
62,695
(34,779)
2012
───────
KD27,916
000's
═══════
1,115
61,580
───────
62,695
(34,779)
───────
27,916
═══════
════════
The net cash flows incurred by the discontinued operation are as follows:
Operating
Investing
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
At 31 December 2013
Net cash inflow
5
2013
KD 000’s
2012
KD 000’s
4,411
(5,377)
4,929
4,731
────────
────────
════════
════════
(966)
CASH AND CASH EQUIVALENTS
2013
KD 000's
Cash on hand
Cash at bank
1,717
39,002
───────
40,719
Less: restricted bank balance
(11)
Kuwait Foreign Petroleum Exploration Company K.S.C. (Closed)
and
───────
Kuwait Foreign Petroleum Exploration Company K.S.C. (Closed) and
NOTES
TOequivalents
THE CONSOLIDATED FINANCIAL STATEMENTS
Cash
and cash
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS 40,708
At 31 December 2013
═══════
At 31 December 2013
6
6
9,660
2012
KD 000's
1,115
61,580
───────
62,695
(34,779)
Subsidiaries
───────
Subsidiaries
27,916
═══════
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS
Related parties comprise the Ultimate Parent Company and subsidiaries, directors and executive officers of the Group,
Related
partiesand
comprise
the Ultimate
Company
and subsidiaries,
directors
andtransactions
executive officers
of the Group,
their families
companies
of which Parent
they are
the principal
owners. All related
party
are conducted
on an
their
families
and
companies
of
which
they
are
the
principal
owners.
All
related
party
transactions
are
conducted
on an
arm’s length basis and are approved by the board of directors. The Group enters into transactions with related parties.
arm’s
length
basis
and
are
approved
by
the
board
of
directors.
The
Group
enters
into
transactions
with
related
parties.
Pricing policies and terms are approved by the Group's
28 management. Balances and transactions between the Parent
Pricing policies
terms arewhich
approved
by the parties,
Group'shave
management.
Balances
and transactions
the Parent
Company
and itsand
subsidiaries,
are related
been eliminated
on consolidation
and between
are not disclosed
in
Company
and
its
subsidiaries,
which
are
related
parties,
have
been
eliminated
on
consolidation
and
are
not
disclosed
in
this note. Amounts due from related parties are interest free (except for Funds held by Ultimate Parent Company),
this
note.
Amounts
due
from
related
parties
are
interest
free
(except
for
Funds
held
by
Ultimate
Parent
Company),
have no fixed maturity and are neither past due nor impaired. Amounts due to related parties are interest free and have
have
no fixed
maturity and are neither past due nor impaired. Amounts due to related parties are interest free and have
no fixed
maturity.
no fixed maturity.
The related party balances included in these consolidated financial statements are as follows:
The related party balances included in these consolidated financial statements are as follows:
a)
a)
Compensation of key management personnel
Compensation of key management personnel
Salaries and other short-term benefits
Salaries and other short-term benefits
Post-employment benefits
Post-employment benefits
b)
b)
Funds held by Ultimate Parent Company
Funds held by Ultimate Parent Company
Funds held by Ultimate Parent Company
Funds held by Ultimate Parent Company
2013
KD2013
000's
KD 000's
2012
KD2012
000's
KD 000's
1,737
1,737
1,871
1,871
──────
──────
3,608
3,608
══════
══════
1,633
1,633
208
208
──────
──────
1,841
1,841
══════
══════
2013
KD2013
000's
KD 000's
2012
KD2012
000's
KD 000's
160,769
160,769
══════
══════
16,875
16,875
══════
══════
Funds held by Ultimate Parent Company represent surplus funds generated from operations and advanced to the
Funds
held
by Ultimate
Parent
represent surplus
from operations
and isadvanced
to the
Ultimate
Parent
Company.
ThereCompany
are no restrictions
on thesefunds
fundsgenerated
and the average
interest rate
approximately
Ultimate
Parent
Company.
There
are
no
restrictions
on
these
funds
and
the
average
interest
rate
is
approximately
0.23% per annum (2012: 0.36% per annum). Interest earned during the year amounted to KD 195 thousand (2012:
0.23%
annum (2012: 0.36% per annum). Interest earned during the year amounted to KD 195 thousand (2012:
KD 222per
thousand).
KD 222 thousand).
c)
c)
Due to Ultimate Parent Company and affiliates
Due to Ultimate Parent Company and affiliates
Ultimate Parent Company
Ultimate
Others Parent Company
Others
2013
2013
KD
000's
KD 000's
17,833
17,833
23
23
──────
──────
17,856
17,856
══════
══════
2012
KD2012
000's
KD 000's
186,807
186,807
17
17
──────
──────
186,824
186,824
══════
══════
54
Kuwait Foreign Petroleum Exploration Company K.S.C. (Closed) And Subsidiaries
Kuwait Foreign Petroleum Exploration Company K.S.C. (Closed) and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES
TO THE
At 31 December
2013 CONSOLIDATED FINANCIAL STATEMENTS
At 31 December 2013
7
TRADE AND OTHER RECEIVABLES
2013
KD 000's
2012
KD 000's
Trade receivables
Less: allowance for impairment of trade receivables
57,556
(1,154)
──────
56,402
81,571
(1,347)
──────
80,224
Due from joint venture participants
Decommissioning funds with operators
Prepayments
Advance corporate tax
Other receivables
12,146
6,314
18,612
59,039
32,066
──────
184,579
══════
1,543
1,198
2,355
40,062
17,923
──────
143,305
══════
Trade receivables are non-interest bearing and generally on 60 days term.
At 31 December 2013, trade receivables with a nominal value of KD 1,154 thousand (2012: KD 1,347 thousand) were
impaired and fully provided for. Movements in the allowances for impairment of receivables were as follows:
2013
KD 000’s
At 1 January
Unused amounts reversed
1,347
(193)
At 31 December
2012
KD 000’s
1,660
(313)
──────────
──────────
══════════
══════════
1,154
1,347
The Group has provided for trade receivables based on estimated irrecoverable amounts, determined by reference to
past default experience. The Group does not hold any collateral over these balances.
At 31 December 2013, the analysis of trade receivables that were past due, but not impaired, is as follows:
Past due but not impaired
2013
2012
Neither
past due
nor
impaired
 60 days
60 to 90
days
90 to 120
days
KD 000’s
KD 000’s
KD 000’s
51,777
48,573
4,495
8,691
1,553
 120 days
Total
KD 000’s
KD 000’s
KD 000’s
130
1,628
19,779
56,402
80,224
In determining the recoverability of a trade or other receivable, the Group performs a risk analysis considering the type
and age of the outstanding receivable and the credit worthiness of the counterparties.
55
30
Kuwait
Foreign
Petroleum Exploration
Company K.S.C. (Closed) and Subsidiaries
NOTES TO
THE CONSOLIDATED
FINANCIAL STATEMENTS
At 31 December
2013 CONSOLIDATED FINANCIAL STATEMENTS
NOTES
TO THE
At 31 December 2013
8
INVENTORIES
2013
KD 000's
2012
KD 000's
22,016
540
25,709
──────
48,265
Less: Allowance for slow moving and obsolete items
(2,069)
──────
46,196
══════
Spare parts, materials and supplies are used in operations and are not held for re-sale.
11,628
23,287
──────
34,915
(1,793)
──────
33,122
══════
Crude oil
Condensate
Spare parts, materials and supplies
Movement in the allowance for obsolete and slow moving items:
2012
2013
KD 000's
KD 000's
At 1 January
1,637
1,793
Charge for the year
123
387
Exchange adjustments
33
(111)
Kuwait
KuwaitForeign
ForeignPetroleum
PetroleumExploration
ExplorationCompany
CompanyK.S.C.
K.S.C.(Closed)
(Closed)
and
andSubsidiaries
Subsidiaries
──────
──────
At 31 December
1,793
NOTES
NOTES
TO
TOTHE
THECONSOLIDATED
CONSOLIDATEDFINANCIAL
FINANCIALSTATEMENTS
STATEMENTS 2,069
══════
══════
AtAt3131December
December2013
2013
99
PROPERTY,
PROPERTY,PLANT
PLANTAND
ANDEQUIPMENT
EQUIPMENT
Cost
Cost
AtAt3131December
December2012
2012
Additions
Additions
Acquisitions
Acquisitions(Note
(Note3)3)
Change
Changeofofestimate
estimate(Note
(Note13)
13)
Disposals
Disposals
Exchange
Exchangeadjustments
adjustments
AtAt3131December
December2013
2013
Depreciation,
Depreciation,depletion,
depletion,amortization
amortization
and
andimpairment
impairmentlosses
losses
AtAt3131December
December2012
2012
Charge
Chargeforforthe
theyear
year
Disposals
Disposals
Net
Netimpairment
impairmentlosses
losses(Note
(Note18)
18)
Exchange
Exchangeadjustments
adjustments
AtAt3131December
December2013
2013
Net
Netcarrying
carryingamount
amount
AtAt3131December
December2013
2013
31
Oil
Oiland
andgas
gas Other
Otherfixed
fixed
properties
properties
assets
assets
KD
KD000's
000's
KD
KD000's
000's
Total
Total
KD
KD000's
000's
1,591,810
1,591,810
415,384
415,384
60,713
60,713
27,645
27,645
(186,147)
(186,147)
(76,620)
(76,620)
──────
──────
1,832,785
1,832,785
──────
──────
11,797
11,797
921
921
--(94)
(94)
3333
──────
──────
12,657
12,657
──────
──────
1,603,607
1,603,607
416,305
416,305
60,713
60,713
27,645
27,645
(186,241)
(186,241)
(76,587)
(76,587)
──────
──────
1,845,442
1,845,442
──────
──────
856,709
856,709
124,026
124,026
(94,814)
(94,814)
27,503
27,503
(33,981)
(33,981)
──────
──────
879,443
879,443
──────
──────
6,574
6,574
837
837
(23)
(23)
-1515
──────
──────
7,403
7,403
──────
──────
863,283
863,283
124,863
124,863
(94,837)
(94,837)
27,503
27,503
(33,966)
(33,966)
──────
──────
886,846
886,846
──────
──────
953,342
953,342
══════
══════
5,254
5,254
══════
══════
958,596
958,596
══════
══════
56
Kuwait Foreign Petroleum Exploration Company K.S.C. (Closed) And Subsidiaries
Kuwait
Petroleum Exploration
Company K.S.C. (Closed)
NOTES
TOForeign
THE CONSOLIDATED
FINANCIAL STATEMENTS
NOTES
TO THE
At
31 December
2013 CONSOLIDATED FINANCIAL STATEMENTS
and Subsidiaries
At 31 December 2013
9
PROPERTY, PLANT AND EQUIPMENT (continued)
Cost
At 31 December 2011
Additions
Change of estimate (Note 13)
Disposals
Exchange adjustments
At 31 December 2012
Depreciation, depletion, amortization
and impairment losses
At 31 December 2011
Charge for the year
Disposals
Net impairment losses (Note 18)
Exchange adjustments
Oil and gas
properties
KD 000's
Other
fixed assets
KD 000's
1,253,989
303,959
21,934
11,928
──────
1,591,810
──────
11,063
676
722,112
93,163
34,153
7,281
──────
856,709
──────
At 31 December 2012
Total
KD 000's
(48)
106
──────
11,797
──────
1,265,052
304,635
21,934
(48)
12,034
──────
1,603,607
──────
5,657
886
(27)
58
──────
6,574
──────
727,769
94,049
(27)
34,153
7,339
──────
863,283
──────
Net carrying
amount Petroleum Exploration Company K.S.C. (Closed) and Subsidiaries
Kuwait
Foreign
At 31 December
2012 CONSOLIDATED FINANCIAL STATEMENTS
735,101
NOTES
TO THE
At 31 December 2013
10
══════
740,324
══════
INTANGIBLE ASSETS
Other intangible
assets
KD 000's
Cost
At 31 December 2012
Additions
Acquisitions (Note 3)
Expensed to dry hole
Exchange adjustments
At 31 December 2013
Net carrying amount
At 31 December 2012
At 31 December 2013
11
5,223
══════
Exploration and
evaluation assets
KD 000's
Total
KD 000's
7,274
──────
7,274
──────
52,244
62,370
3,966
(27,460)
(2,492)
──────
88,628
──────
52,244
62,370
11,240
(27,460)
(2,492)
──────
95,902
──────
══════
7,274
══════
52,244
══════
88,628
══════
52,244
══════
95,902
══════
GOODWILL
Goodwill
KD 000's
Cost
57 At 31 December 2012
33
883
At 31 December 2013
7,274
Net carrying amount
──────
At 31 December 2012
Net carrying amount
══════
At 31 December 2012
At 31 December 2013
7,274
══════
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
══════
At
2013
7,274
At 31
31 December
December 2013
══════
11
GOODWILL
11
88,628
──────
52,244
══════
52,244
88,628
══════
══════
88,628
══════
95,902
──────
52,244
══════
52,244
95,902
══════
══════
95,902
══════
GOODWILL
Goodwill
KD 000's
Goodwill
Cost
KD 000's
At 31 December 2012
883
Cost
Additions (note 3)
28,550
At 31 December 2012
883
──────
Additions (note 3)
28,550
At 31 December 2013
29,433
──────
──────
At 31 December 2013
29,433
Accumulated impairment losses
──────
At 31 December 2012
Accumulated impairment losses
Impairment charge (Note 18)
2,326
At 31 December 2012
──────
Impairment charge (Note 18)
2,326
At 31 December 2013
2,326
──────
Kuwait
Kuwait Foreign
Foreign Petroleum
Petroleum Exploration
Exploration Company
Company K.S.C.
K.S.C. (Closed)
(Closed) and
and Subsidiaries
Subsidiaries
──────
At
31 December
2013 CONSOLIDATED
2,326
Kuwait
Foreign
PetroleumExploration
Exploration
Company
K.S.C.(Closed)
(Closed)and
andSubsidiaries
Subsidiaries
NOTES
TO
THE
FINANCIAL
STATEMENTS
Kuwait
Foreign
Company
K.S.C.
NOTES
TOamount
THE Petroleum
CONSOLIDATED
FINANCIAL
STATEMENTS
Net carrying
At
31 December
2013CONSOLIDATED
──────
NOTES
TOTHE
THE
FINANCIALSTATEMENTS
STATEMENTS
NOTES
TO
At
31
December
2013 CONSOLIDATEDFINANCIAL
AtKuwait
31 December
2013
27,107
Kuwait
Foreign
Foreign
Petroleum
Petroleum
Exploration
Exploration
Company
Company
K.S.C.
K.S.C.
(Closed)
(Closed)
and
and
Subsidiaries
Subsidiaries
Net
carrying
amount
At
31
December
2013
At 31 December 2013
──────
NOTES
TO
CONSOLIDATED
TOTHE
THE
CONSOLIDATED
FINANCIALSTATEMENTS
STATEMENTS
12NOTES
TRADE
AND
OTHER
PAYABLES FINANCIAL
At
31 December
2013
27,107
12 31 December
TRADE AND
OTHER PAYABLES
At
2012
883
2012
2013
At
At
31
31
December
December
2013
2013
──────
12
TRADE
AND
OTHER
PAYABLES
12
TRADE AND OTHER PAYABLES
2012
2013
══════
KD2012
000's
KD2013
000's
At 31 December 2012
883
KD 2012
000's
KD 2013
000's
KD
000's
KD000's
000's
KD 000's
KD
1212 TRADE
TRADE
AND
AND
OTHER
OTHER
PAYABLES
PAYABLES
══════
Joint venture payables and accruals
73,258
92,862
2012
2012
2013
2013
Joint venture payables and accruals
73,258
92,862
Others
15,648
25,961
Jointventure
venturepayables
payablesand
andaccruals
accruals
73,258
92,862
Joint
73,258
KD
KD
000's
000's
92,862
KD
KD
000's
000's
Others
15,648
25,961
──────
──────
Others
15,648
25,961
Others
15,648
25,961
──────
──────
88,906
118,823
──────
──────
──────
──────
Joint
Joint
venture
venture
payables
payables
and
and
accruals
accruals
73,258
73,258
92,862
92,862
88,906
118,823
══════
══════
88,906
118,823
88,906
118,823
Others
Others
15,648
15,648
25,961
25,961
══════
══════
──────
──────
══════
══════
──────
──────
══════
══════
13
DECOMMISSIONING PROVISION
88,906
88,906
118,823
118,823
13
DECOMMISSIONING PROVISION
13 DECOMMISSIONING
DECOMMISSIONINGPROVISION
PROVISION
13
══════
══════
══════
══════
2012
2013
2012
2013
KD
000's
KD
000's
2012
2013
2012
2013
1313 DECOMMISSIONING
DECOMMISSIONING
PROVISION
PROVISION
KD
000's
KD 000's
KD000's
000's
KD000's
000's
KD
KD
34
At 1 January
54,386
86,025
2012
2012
2013
2013
At 1 January
54,386
86,025
34
Unwinding
of discount
2,745
4,494
At11January
January
54,386
86,025
At
54,386
KD
KD
000's
000's
86,025
KD
KD
000's
000's
Unwinding
of discount
2,745
4,494
Changes
in estimates
(Note 9)
21,934
27,645
Unwinding
of
discount
2,745
4,494
Unwinding
of
discount
2,745
4,494
Changes in estimates (Note 9)
21,934
27,645
Acquisitions
(Note 3)(Note
6,437
25,893
At
1 January
54,386
86,025
Changes
estimates
21,934
27,645
Changes
ininestimates
21,934
At
1 January
54,386
27,645
86,025
Acquisitions
(Note 3) (Note9)9)
6,437
25,893
Disposals
(Note
4)
(3,743)
Unwinding
of
discount
2,745
4,494
Acquisitions
(Note
3)
6,437
25,893
Acquisitions
(Note
3)
6,437
Unwinding
of
discount
2,745
25,893
4,494
Disposals (Note 4)
(3,743)
Exchange
adjustments
523
(4,053)
Disposals
(Note
(3,743)
Disposals
4)4) (Note
-Changes
Changes
in(Note
in
estimates
estimates
(Note
9)9)
21,934
21,934
(3,743)
27,645
27,645
Exchange
adjustments
523
(4,053)
──────
──────
Exchange
adjustments
523
(4,053)
Acquisitions
Acquisitions
(Note
(Note
3)3)
6,437
6,437
Exchange
adjustments
523
25,893
25,893
(4,053)
──────
──────
At
31 December
86,025
136,261
──────
──────
Disposals
Disposals
(Note
(Note
4)
4)
──────
──────
(3,743)
(3,743)
At 31 December
86,025136,261
══════
══════
(4,053)
31December
December
86,025
136,261
AtAt
31
86,025
Exchange
Exchange
adjustments
adjustments
523
523
136,261
(4,053)
══════
══════
──────
──────
══════
══════
══════
──────
──────
══════
The
makes full provision for the future cost of decommissioning oil production
facilities and pipelines
on a
AtAt
31Group
31
December
December
86,025
86,025
136,261
136,261
The
Group
makes full provision for the future cost of decommissioning oil production
facilities and pipelines
on a
discounted
basis
on
the
installation
of
those
facilities.
The
decommissioning
provision
represents
the
present
value
TheGroup
Groupbasis
makes
fullprovision
provisionfor
for
thefuture
future
costofof
decommissioning
oilprovision
production
facilitiesthe
and
pipelines
The
makes
cost
decommissioning
oil
production
facilities
and
pipelines
ononof
══════
══════
══════
══════
discounted
onfull
the
installation
ofthe
those
facilities.
The
decommissioning
represents
present
value
ofa a
decommissioning
costs
relating
to
oil
and
gas
properties,
which
are
expected
to
be
incurred
when
the
producing
oil
and
discounted
basis
on
the
installation
of
those
facilities.
The
decommissioning
provision
represents
the
present
value
discounted
basis on
therelating
installation
those
The
decommissioning
represents
theproducing
present value
ofof
decommissioning
costs
to oilofand
gasfacilities.
properties,
which
are expected toprovision
be incurred
when the
oil and
gas
properties are costs
expected
to cease
operations.
These provisions
have
beentoto
estimated
based
onthe
the
Group’s
internal
decommissioning
costs
relating
to
oil
and
gas
properties,
which
are
expected
be
incurred
when
the
producing
oil
and
decommissioning
relating
to
oil
and
gas
properties,
which
are
expected
be
incurred
when
producing
oil
and
gas
properties
are expected
to cease
operations.
These
provisions
have been
estimated
based
on the
Group’s
internal
The
The
Group
Group
makes
makes
full
fullprovision
provision
forfor
thethefuture
futurecost
costofAssumptions
of
decommissioning
decommissioning
oil
production
production
facilities
facilities
and
and
pipelines
pipelines
onona a
estimates
using
operators
estimates
where
applicable.
based
onoil
the
currentbased
economic
environment
have
gas
properties
are
expected
cease
operations.
These
provisions
have
been
estimated
based
the
Group’s
internal
gas
properties
are
expected
totocease
operations.
These
provisions
have
been
estimated
ononthe
Group’s
internal
estimates
using
operators
estimates
where
applicable.
Assumptions
based
on provision
the
current
economic
environment
have
discounted
discounted
basis
basis
on
on
the
the
installation
installation
of
of
those
those
facilities.
facilities.
The
The
decommissioning
decommissioning
provision
represents
represents
the
the
present
present
value
value
ofof
been
made,
which
management
believes
are
a reasonable
basis upon
which
to current
estimate
the future
liability. These
estimates
using
operators
estimates
where
applicable.
Assumptions
based
the
current
economic
environment
have
estimates
using
operators
estimates
where
applicable.
Assumptions
based
onon
the
economic
environment
have
been
made,
which
management
believes
are
a
reasonable
basis
upon
which
to
estimate
the
future
liability.
These
decommissioning
decommissioning
costs
costs
relating
relating
to
to
oil
oil
and
and
gas
gas
properties,
properties,
which
which
are
are
expected
expected
to
to
be
be
incurred
incurred
when
when
the
the
producing
producing
oil
oil
and
and
estimates
arewhich
reviewed
regularlybelieves
to take are
into
anybasis
material
changes
totoestimate
the
assumptions.
However,
actual
been
made,
management
believes
area aaccount
reasonable
basisupon
upon
which
estimate
the
future
liability.
These
been
made,
management
reasonable
which
to
the
liability.
These
gas
properties
areareexpected
totocease
These
provisions
have
been
estimated
based
onfuture
thethe
Group’s
internal
estimates
are which
reviewed
regularly
to operations.
take
into
account
any
material
changes
to the
assumptions.
However,
actual
gas
properties
expected
cease
operations.
These
provisions
have
been
estimated
based
on
Group’s
internal
decommissioning
costs will
ultimately
depend
upon
future
prices
for the
necessary
decommissioning
works
estimates
are
reviewed
regularly
take
into
account
anymarket
material
changes
to
theassumptions.
assumptions.
However,actual
actual
estimates
are
reviewed
regularly
toto
take
into
account
any
material
changes
to
the
However,
using
operators
estimates
where
applicable.
Assumptions
based
on
the
current
economic
environment
have
decommissioning
costs will
ultimately
depend
upon
future
market
prices
for
the
necessary
decommissioning
works
estimates
estimates
using
operators
estimates
where
applicable.
Assumptions
based
onthe
the
current
economic
environment
have
required
that
will
reflect
market
conditions
at
the
relevant
time.
Furthermore,
timing
of
decommissioning
is
likely
decommissioning
costs
will
ultimately
depend
upon
future
market
prices
for
the
necessary
decommissioning
works
decommissioning
costs
will
ultimately
depend
upon
future
market
prices
for
the
necessary
decommissioning
works
been
made,
which
management
believes
are
a
reasonable
basis
upon
which
to
estimate
the
future
liability.
These
required
that
will
reflect
market
conditions
at
the
relevant
time.
Furthermore,
the
timing
of
decommissioning
is
likely
been
made,
which
management
believes
are
a
reasonable
basis
upon
which
to
estimate
the
future
liability.
These
to
dependthat
on will
when
the fields
cease
to produce
at
economically
viable
rates. This,
in
turn,ofof
will
depend upon future
oil
required
will
reflect
market
conditions
the
relevant
time.
Furthermore,
the
timing
decommissioning
likely
required
reflect
market
conditions
atat
the
relevant
time.
Furthermore,
the
decommissioning
isisactual
likely
to
depend that
onare
when
the fields
cease
produce
at
economically
viable
rates.
This,
turn,
will
dependHowever,
upon
future
oil
estimates
estimates
are
reviewed
reviewed
regularly
regularly
toto
totake
takeinto
into
account
account
any
any
material
material
changes
changes
totiming
toin
the
the
assumptions.
assumptions.
However,
actual
and
gas
prices,
which
are
inherently
uncertain.
to
depend
on
when
the
fields
cease
to
produce
at
economically
viable
rates.
This,
in
turn,
will
depend
upon
future
oil
todecommissioning
depend
on when
the
fields
cease
to
produce
atupon
economically
viable
rates.for
This,
in
turn, willdecommissioning
depend
upon future
oil
and
gas prices,
which
are
inherently
uncertain.
decommissioning
costs
costs
will
willultimately
ultimately
depend
depend
upon
future
futuremarket
market
prices
prices
forthethe
necessary
necessary
decommissioning
works
works
and
gas
prices,
which
are
inherently
uncertain.
and
gas
prices,
which
are
inherently
uncertain.
required
required
that
thatwill
will
reflect
reflect
market
conditions
conditions
at atthe
the
relevant
relevant
Furthermore,
thethe
timing
timingof7%
ofdecommissioning
decommissioning
is islikely
likely
The
discount
rate
used
in market
the
calculation
of the
provision
astime.
attime.
31Furthermore,
December
2013
equaled
(2012: 7%).
The
discount
rate
used
infields
the
calculation
of the provision
as at 31viable
December
2013
equaled
7%
(2012:
7%).
totodepend
dependonon
when
when
thethe
fields
cease
ceasetotoproduce
produce
at ateconomically
economically
viablerates.
rates.
This,
This,
ininturn,
turn,
will
will
depend
depend
upon
uponfuture
futureoiloil
The
discount
rate
used
inthe
the
calculation
theprovision
provisionasasatat31
31December
December2013
2013equaled
equaled7%
7%(2012:
(2012:7%).
7%).
The
discount
rate
used
inare
calculation
ofofthe
and
gas
prices,
which
are
inherently
uncertain.
and
gas
prices,
which
inherently
uncertain.
14 discount
EMPLOYEES'
OF SERVICE
BENEFITS
The
rate
used
inEND
thethe
calculation
ofof
thethe
provision
asas
at at
3131
December
equaled
7%
(2012:
7%).
rate
used
in
calculation
provision
December2013
2013
equaled
7%
(2012:
7%).
14The discount
EMPLOYEES'
END
OF
SERVICE
BENEFITS
58
estimates
estimatesareare
reviewed
reviewedregularly
regularly
to totake
takeinto
intoaccount
accountany
any
material
materialchanges
changesto tothetheassumptions.
assumptions.However,
However,actual
actual
decommissioning
decommissioning
costs
costs
will
will
ultimately
ultimately
depend
depend
upon
upon
future
future
market
market
prices
prices
forfor
thethe
necessary
necessary
decommissioning
decommissioning
works
works
required
required
that
that
will
will
reflect
reflect
market
market
conditions
conditions
at at
thethe
relevant
relevant
time.
time.
Furthermore,
Furthermore,
thethe
timing
timing
of of
decommissioning
decommissioning
is is
likely
likely
Kuwait Foreign Petroleum Exploration Company K.S.C. (Closed) And Subsidiaries
to to
depend
depend
onon
when
when
thethe
fields
fields
cease
cease
to to
produce
produce
at at
economically
economically
viable
viable
rates.
rates.
This,
This,
in in
turn,
turn,
will
will
depend
depend
upon
upon
future
future
oiloil
and
and
gasgas
prices,
prices,
which
which
areare
inherently
inherently
uncertain.
uncertain.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
At
31
December
2013
The
The
discount
discount
rate
rate
used
used
in in
thethe
calculation
calculation
of of
thethe
provision
provision
as as
at at
3131
December
December
2013
2013
equaled
equaled
7%7%
(2012:
(2012:
7%).
7%).
1414 EMPLOYEES'
EMPLOYEES'
END
END
OFOF
SERVICE
SERVICE
BENEFITS
BENEFITS
2013
2013
KDKD
000's
000's
2012
2012
KDKD
000's
000's
AtAt
1 January
1 January
Charge
Charge
forfor
thethe
year
year
Payments
Payments
during
during
thethe
year
year
4,335
4,335
5,208
5,208
1,068
1,068
2,892
2,892
(195)
(195)
(1,279)
(1,279)
──────
──────
──────
──────
Kuwait Foreign Petroleum Exploration Company K.S.C. (Closed)
and Subsidiaries
AtKuwait
At
3131
December
December
5,208
5,208
6,821
6,821
Kuwait
Foreign
Foreign
PetroleumExploration
Exploration
Company
Company
K.S.C.
K.S.C.(Closed)
(Closed)
and
andSubsidiaries
Subsidiaries
NOTES
TO
THE Petroleum
CONSOLIDATED
FINANCIAL
STATEMENTS
══════
══════
══════
══════
At 31 December 2013
NOTES
NOTES
TO
TO
THE
THE
CONSOLIDATED
CONSOLIDATED
FINANCIAL
FINANCIAL
STATEMENTS
STATEMENTS
AtAt
3131
December
December
2013
2013
15
SHARE CAPITAL, STATUTORY RESERVE AND VOLUNTARY RESERVE
15
15
SHARE
SHARE
CAPITAL,
CAPITAL,
STATUTORY
STATUTORY
RESERVE
RESERVE
AND
AND
VOLUNTARY
VOLUNTARY
RESERVE
RESERVE
a)
Share
capital
a) a) Share
Share
capital
capital
Amount
Number of Shares
2012
2013 Amount
2013
Amount 2012
Number
Number
of of
Shares
Shares
3535
KD
000's
000's
KD
000's
000's
2012
2012
2012
2012
2013
2013
2013
2013
KDKD
000's
000's
000's
000's
KDKD
000's
000's
000's
000's
Shares authorised, issued and paid-up of
200,000
200,000
200,000
200,000
KD
1 authorised,
each
at beginning
of
year
Shares
Shares
authorised,
issued
issued
andand
paid-up
paid-up
of of
200,000
200,000
200,000
200,000
200,000
200,000
200,000
200,000
Increase
share
capital authorised,
KDKD
1 each
1ofeach
at beginning
at beginning
of of
year
year
issued
and
paid-up
338,893
338,893
Increase
Increase
of of
share
share
capital
capital
authorised,
authorised,
──────
──────
──────
──────
issued
issued
andand
paid-up
paid-up
- - 338,893
338,893
338,893
338,893
At 31 December
200,000
200,000
538,893
538,893
──────
──────
──────
──────
──────
──────
──────
──────
══════
══════
══════
══════
AtAt
3131
December
December
200,000
200,000
200,000
200,000
538,893
538,893
538,893
538,893
══════
══════
══════
══════
══════
══════
══════
══════
The Extraordinary General Assembly of the Parent Company’s shareholders was held on 27 March 2013 and the
shareholders
approved
the increase
of the
authorised
share
capitalshareholders
of
the Parent
Company
from
KD
200,000,000
tothe
The
The
Extraordinary
Extraordinary
General
General
Assembly
Assembly
of of
the
the
Parent
Parent
Company’s
Company’s
shareholders
was
was
held
held
onon
2727
March
March
2013
2013
andand
the
KD
1,200,000,000.
shareholders
shareholders
approved
approved
thethe
increase
increase
of of
thethe
authorised
authorised
share
share
capital
capital
of of
thethe
Parent
Parent
Company
Company
from
from
KDKD
200,000,000
200,000,000
to to
KDKD
1,200,000,000.
1,200,000,000.
b)
Statutory reserve
b) b) Statutory
Statutory
reserve
reserve
In accordance with the Companies Law and the Parent Company’s Articles of Association, 10% of the profit for the
year
after
boardwith
of
directors’
remuneration
has
transferred
to the
statutory
reserve.
The 10%
Company
resolve
tothe
In
In
accordance
accordance
with
thethe
Companies
Companies
Law
Law
andand
thebeen
the
Parent
Parent
Company’s
Company’s
Articles
Articles
of of
Association,
Association,
10%
of of
themay
the
profit
profit
forfor
the
discontinue
such
transfers,
after the
reserves
have exceeded
50%
of reserve.
share
capital,
by
a resolution
of the
year
year
after
after
board
board
ofannual
of
directors’
directors’
remuneration
remuneration
hashas
been
been
transferred
transferred
to to
thethe
statutory
statutory
reserve.
The
The
Company
Company
may
may
resolve
resolve
to to
shareholders’
Annual
General
Assembly.
The
statutory
reserve
is not
available
forcapital,
distribution
in certain
discontinue
discontinue
such
such
annual
annual
transfers,
transfers,
after
after
the
the
reserves
reserves
have
have
exceeded
exceeded
50%
50%
of of
share
share
capital,
byby
a except
resolution
a resolution
of of
thethe
circumstances
stipulated
by
Law.Assembly.
shareholders’
shareholders’
Annual
Annual
General
General
Assembly.The
The
statutory
statutory
reserve
reserve
is is
notnot
available
available
forfordistribution
distribution
except
except
in incertain
certain
circumstances
circumstances
stipulated
stipulated
byby
Law.
Law.
c)
Voluntary reserve
c) c) Voluntary
Voluntary
reserve
reserve
In accordance with the Parent Company’s Articles of Association, 10% of profit for the year after contribution to
taxation
and board
ofthe
directors’
remuneration
has
been
to the
voluntary
reserve.
Such
annual
transfers
may
In
In
accordance
accordance
with
with
the
Parent
Parent
Company’s
Company’s
Articles
Articles
of transferred
of
Association,
Association,
10%
10%
of of
profit
profit
forfor
thethe
year
year
after
after
contribution
contribution
to to
be taxation
discontinued
by of
a resolution
of remuneration
the shareholders’
Annual
General
Assembly
upon
a recommendation
bytransfers
the board
taxation
andand
board
board
of
directors’
directors’
remuneration
hashas
been
been
transferred
transferred
to to
the
the
voluntary
voluntary
reserve.
reserve.
Such
Such
annual
annual
transfers
may
may
of
directors.
There
restriction
on
distribution
of this
reserve.
be be
discontinued
discontinued
byis
by
a no
resolution
a resolution
of of
thethe
shareholders’
shareholders’
Annual
Annual
General
General
Assembly
Assembly
upon
upon
a recommendation
a recommendation
byby
thethe
board
board
of of
directors.
directors.
There
There
is no
is no
restriction
restriction
on on
distribution
distribution
of of
thisthis
reserve.
reserve.
16
REVENUE
1616 REVENUE
REVENUE
2012
2013
Oil sales
Gas
sales
Oil
Oil
sales
sales
Pipeline
tariff
Gas
Gas
sales
sales
Pipeline
Pipeline
tariff
tariff
59
17
COST OF OPERATIONS
1717 COST
COST
OFOF
OPERATIONS
OPERATIONS
KD
000's
2013
2013
KDKD
000's
000's
204,651
187,681
204,651
204,651
13,539
187,681
187,681
──────
13,539
13,539
405,871
──────
──────
══════
405,871
405,871
══════
══════
KD
000's
2012
2012
KDKD
000's
000's
134,826
197,757
134,826
134,826
2,286
197,757
197,757
──────
2,286
2,286
334,869
──────
──────
══════
334,869
334,869
══════
══════
2013
KD
000's
2013
2013
2012
KD
000's
2012
2012
Oil sales
Oil sales
Oil sales
salessales
Gas
Gas
GasPipeline
sales
Pipeline
tarifftariff
Pipeline tariff
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
At 31 December 2013
17 17COST
COST
OF OPERATIONS
OF OPERATIONS
17
COST OF OPERATIONS
KD 000's
204,651
204,651
204,651
187,681
187,681
187,681
13,539
13,539
13,539
──────
──────
──────
405,871
405,871
405,871
══════
══════
══════
20132013
KD2013
000's
KD 000's
KD 000's
KD 000's
134,826
134,826
134,826
197,757
197,757
197,757
2,2862,286
2,286
──────
──────
──────
334,869
334,869
334,869
══════
══════
══════
20122012
KD2012
000's
KD 000's
KD 000's
Operating
Operating
costscosts
58,413
58,413
83,995
83,995
Operating
costs
58,413
83,995
Depletion
Depletion
ofForeign
oilof
and
oilgas
and
properties
gas
propertiesExploration
72,824
72,824
124,026
124,026
Kuwait
Kuwait
Foreign
Petroleum
Petroleum
Exploration
Company
Company
K.S.C.
K.S.C.
(Closed)
(Closed)
and
and
Subsidiaries
Subsidiaries
Kuwait
Exploration Company K.S.C. (Closed)
and Subsidiaries
Depletion
ofForeign
oil and gasPetroleum
properties
72,824
124,026
Royalties
Royalties
14,194
14,194
14,406
14,406
NOTES
NOTES
TO
THE
THE
CONSOLIDATED
CONSOLIDATED
FINANCIAL
FINANCIAL
STATEMENTS
STATEMENTS
Kuwait
Foreign
Petroleum
Exploration
Company
K.S.C.
(Closed)
and Subsidiaries
NOTES
TOTO
THE
CONSOLIDATED
FINANCIAL
STATEMENTS
Royalties
14,194
14,406
──────
────── ──────
──────
At
At
31
December
2013
2013
NOTES
TO THE
CONSOLIDATED FINANCIAL STATEMENTS
──────
──────
At31
31December
December
2013
145,431
145,431
222,427
222,427
At 31 December 2013
145,431
222,427
══════
══════ ══════
══════
18
NET
IMPAIRMENT
IMPAIRMENT
LOSSES
LOSSES
(REVERSALS)
(REVERSALS)
══════
══════
18 18 NET
NET
IMPAIRMENT
LOSSES
(REVERSALS)
18
NET IMPAIRMENT LOSSES (REVERSALS)
2012
2012
2013
2013
2012
2013
KD
000's
000's
KD
000's
000's
36 36
2012
2013
KDKD
000's
KDKD
000's
36
Impairment
Impairment
losses
losses
KD
000's
KD 000's
Impairment losses
Oil
Oil
and
and
gas
gas
properties
properties
847
32,591
32,591
Impairment
losses
Oil and gas properties
847847
32,591
Goodwill
Goodwill
513
2,326
2,326
Oil
and gas properties
847
32,591
Goodwill
513513
2,326
Impairment
Impairment
reversals
reversals
Goodwill
513
2,326
Impairment
reversals
Oil
Oil
and
and
gas
gas
properties
properties
(2,457)
(2,457)
(5,088)
(5,088)
Impairment
reversals
Oil and gas properties
(2,457)
(5,088)
──────
──────
──────
──────
Oil and gas properties
(2,457)
(5,088)
──────
──────
(1,097)
(1,097)
Net
impairment
impairment
losses
losses
(reversals)
(reversals)
29,829
29,829
(1,097)
NetNet
impairment
losses
(reversals)
29,829
──────
──────
══════
══════
══════
══════
(1,097)
Net impairment losses (reversals)
29,829
══════
══════
══════
InIn assessing
In
assessing
whether
whether
an
an
impairment
isis required,
is required,
the
carrying
carrying
value
value
ofof the
of
asset
asset
oror══════
cash-generating
or
cash-generating
unit
(CGU)
(CGU)
isis is
assessing
whether
an impairment
impairment
required,
thethe
carrying
value
thethe
asset
cash-generating
unitunit
(CGU)
compared
compared
with
with
its
recoverable
its
recoverable
amount.
amount.
The
The
recoverable
recoverable
amount
amount
is
the
is
higher
the
higher
of
the
of
the
asset’s/CGU’s
asset’s/CGU’s
fair
fair
value
value
less
less
costs
costs
In
assessing
whether
an impairment
required,
the carrying
of the of
asset
or cash-generating
unit (CGU)
is
compared
with
its recoverable
amount.isThe
recoverable
amount value
is the higher
the asset’s/CGU’s
fair value
less costs
tocompared
sell
to
sell
and
and
value
value
in
use.
in
use.
Given
Given
the
nature
the
nature
of
the
of
the
Group’s
Group’s
activities,
activities,
information
information
on
the
on
the
fair
fair
value
value
of
an
of
asset
an
asset
is
usually
is
usually
The
is the
higher of the
asset’s/CGU’s
less
costs
to sell andwith
valueitsinrecoverable
use. Given amount.
the nature
ofrecoverable
the Group’samount
activities,
information
on the
fair value offair
an value
asset is
usually
difficult
difficult
totovalue
obtain
to
obtain
unless
negotiations
negotiations
with
potential
potential
purchasers
purchasers
are
taking
taking
place.
Consequently,
unless
unless
indicated
indicated
to
sell
and
inunless
use.
Given
the nature
ofwith
the
Group’s
activities,
information
onplace.
theConsequently,
fair
value of an
asset
isindicated
usually
difficult
obtain
unless
negotiations
with
potential
purchasers
areare
taking
place.
Consequently,
unless
otherwise,
otherwise,
the
the
recoverable
recoverable
amount
amount
used
used
in
assessing
in
assessing
the
the
impairment
impairment
charges
charges
described
described
below
below
is
value
is
value
in
use.
in
The
difficult
obtain
unless negotiations
potential the
purchasers
are charges
taking place.
Consequently,
unless
otherwise,to the
recoverable
amount usedwith
in assessing
impairment
described
below is value
in indicated
use.use.
TheThe
Group
Group
generally
generally
estimates
estimates
value
value
in
use
in
use
using
using
a
discounted
a
discounted
cash
cash
flow
flow
model.
model.
otherwise,
the recoverable
amount
used
in assessing
the cash
impairment
charges described below is value in use. The
Group generally
estimates value
in use
using
a discounted
flow model.
Group
generally
estimates
value
in use
using
a discounted cash flow model.
Key
Key
assumptions
assumptions
used
used
in
value-in-use
in
value-in-use
calculations
calculations
Key assumptions used in value-in-use calculations
KeyThe
assumptions
used
in
value-in-use
calculations
The
calculation
ofof
value
of
value
inin use
in
for
the
oil
exploration
exploration
and
production
production
CGU
CGU
isis most
is
most
sensitive
sensitive
toto the
to
following
following
The calculation
calculation
value
useuse
forfor
thethe
oil oil
exploration
andand
production
CGU
most
sensitive
thethe
following
assumptions:
assumptions:
The
calculation of value in use for the oil exploration and production CGU is most sensitive to the following
assumptions:
 Production
 Production
volumes
volumes
assumptions:
Production
volumes
 Discount

Discount
rates
rates
Production
volumes
Discount rates
 Crude

Crude
oil
prices
oil
prices
Discount
rates
Crude oil prices
 Crude oil prices
Estimated
Estimated
production
production
volumes
volumes
are
based
based
on
on
detailed
data
data
for
for
the
fields
and
take
take
into
account
account
development
development
plans
plans
for
for
Estimated
production
volumes
areare
based
ondetailed
detailed
data
forthe
thefields
fields
andand
take
intointo
account
development
plans
forthe
thethe
fields
fields
agreed
agreed
by
management
by
management
as
part
as
part
of
the
of
long-term
the
long-term
planning
planning
process.
process.
Estimated
production
volumesasare
based
onlong-term
detailed data
for theprocess.
fields and take into account development plans for the
fields agreed
by management
part
of the
planning
fields agreed by management as part of the long-term planning process.
The
Group
Group
generally
generally
estimates
estimates
value
value
ininuse
in use
for
for
oil
oil
exploration
and
production
production
CGU’s
CGU’s
using
using
discounted
discounted
cash
cash
flow
flow
TheThe
Group
generally
estimates
value
use
forthe
thethe
oilexploration
exploration
andand
production
CGU’s
using
discounted
cash
flow
models.
models.
The
The
future
future
cash
cash
flows
flows
are
are
discounted
discounted
to
their
to
their
present
present
value
value
using
using
a
discount
a
discount
rate
rate
range
range
of
8.5%
of
8.5%
to
10%
to
10%
(2012:
(2012:
The
Group
estimates
value
in use for
exploration
production
usingofdiscounted
cash(2012:
flow
models.
Thegenerally
future cash
flows are
discounted
to the
theiroilpresent
value and
using
a discountCGU’s
rate range
8.5% to 10%
10%)
10%)
depending
depending
on
on
the
specific
risk
risk
characteristics
characteristics
ofofthe
of respective
the
respective
projects.
models.
The
future
cash
flows
are
to their
present
value projects.
using
a discount rate range of 8.5% to 10% (2012:
10%)
depending
onthe
thespecific
specific
riskdiscounted
characteristics
the
respective
projects.
10%) depending on the specific risk characteristics of the respective projects.
19
INCOME
TAX
TAX
EXPENSE
EXPENSE
19 19 INCOME
INCOME
TAX
EXPENSE
19 major
INCOME
TAXofEXPENSE
The
major
components
components
of income
tax
tax
expense
for
for
the
years
ended
ended
31
31
December
2013
2013
and
2012
2012
are
are
as follows:
TheThe
major
components
ofincome
income
taxexpense
expense
forthe
theyears
years
ended
31December
December
2013
andand
2012
areas
asfollows:
follows:
The major components of income tax expense for the years ended 31 December 2013 and2013
2012
are as follows:
2012
2012
2013
2012
2013
KD
KD
000's
000's
Foreign
Foreign
tax
tax
KD
KD
000's
000's
2012
2013
KD
000's
Foreign tax
KD
000's
Current:
Current:
KD 000's
Foreign
KD 000's
Current: tax
Tax
Tax
expense
expense
on
profit
on
profit
63,598
63,598
58,212
58,212
Current:
Tax expense on profit
63,598
58,212
Deferred:
Deferred:
Tax expense on profit
63,598
58,212
Deferred:
(Credit)
(Credit)
charge
charge
for
for
the
year
--income
- income
taxes
taxes
(5,615)
(5,615)
(17,868)
(17,868)
Deferred:
(Credit)
charge
forthe
theyear
year
income
taxes
(5,615)
(17,868)
(Credit)
(Credit)
charge
charge
for
the
for
year
the
year
Petroleum
Petroleum
Resource
Resource
Rent
Rent
Tax
Tax
("PRRT")
("PRRT")
8,573
8,573
(4,810)
(4,810)
(Credit)
taxes
(5,615)
(17,868)
(Credit) charge
charge for
for the
the year
year -- income
Petroleum
Resource Rent Tax ("PRRT")
8,573
(4,810)
──────
──────
──────
──────
(Credit) charge for the year - Petroleum Resource Rent Tax ("PRRT")
8,573
(4,810)
──────
──────
66,556
66,556
Total
Total
tax
tax
expense
expense
reported
reported
in
consolidated
in
consolidated
income
income
statement
statement
35,534
35,534
──────
──────
66,556
Total tax expense reported in consolidated income statement
35,534
══════
══════
══════
══════
66,556
Total tax expense reported in consolidated income statement
35,534
══════
══════
══════
══════
60
Kuwait Foreign Petroleum Exploration Company K.S.C. (Closed) And Subsidiaries
Kuwait
Foreign
Petroleum Exploration
Company K.S.C. (Closed) and Subsidiaries
NOTES TO
THE CONSOLIDATED
FINANCIAL STATEMENTS
NOTES
TO THE
At 31 December
2013 CONSOLIDATED FINANCIAL STATEMENTS
At 31 December 2013
20
DEFERRED TAXATION
At 1 January
Deferred tax (credit) charge for the year – income taxes
Deferred tax (credit) charge for the year – PRRT
Acquisitions
Currency translation effect
At 31 December
Deferred tax includes the following:
Deferred tax assets
Deferred tax liabilities
2013
KD 000's
2012
KD 000's
29,288
(17,868)
(4,810)
4,424
5,751
──────
16,785
══════
27,041
(5,615)
8,573
(711)
──────
29,288
══════
2013
KD 000's
2012
KD 000's
147,785
(164,570)
──────
(16,785)
══════
7,278
(36,566)
──────
(29,288)
══════
The rates of taxation applicable to profits arising in foreign operations vary between 25% to 78%.
Deferred tax arises primarily on temporary differences in depreciation on fixed assets, including decommissioning
assets between the consolidated financial statements and the tax returns of the various foreign operations. The effective
average rate of tax borne by the Group is 47% for 2013 (2012: 54%).
21
LONG-TERM BORROWING
Long-term borrowing
Current
2013
KD 000’s
-
2012
KD 000’s
12,857
Non-current
2012
2013
KD 000’s
KD 000’s
211,538
-
During 2013, the Parent Company has obtained an additional borrowing of US Dollars 750 million equivalent to
KD 211 million denominated in US Dollars from a consortium of local and international banks bearing interest at the
rate of 1 month LIBOR plus 1.4% per annum. During 2013 the average interest rate on the loan was 1.57% (2012:
0.7%) per annum. The loan is unsecured and is repayable in 7 installments from 2015.
61
38
Kuwait
Foreign
Petroleum
Exploration
Company
K.S.C.
(Closed)
andand
Subsidiaries
Kuwait
Kuwait
Foreign
Foreign
Petroleum
Petroleum
Exploration
Exploration
Company
Company
K.S.C.
K.S.C.
(Closed)
(Closed)
and
Subsidiaries
Subsidiaries
NOTES TO
THE
CONSOLIDATED
FINANCIAL
STATEMENTS
NOTES
TO
THE
CONSOLIDATED
FINANCIAL
STATEMENTS
NOTES
TO
TO
THE
THE
CONSOLIDATED
CONSOLIDATED
FINANCIAL
FINANCIAL
STATEMENTS
STATEMENTS
NOTES
At 31 December 2013
At 31 December 2013
At 31
AtDecember
31 December
20132013
22
GENERAL AND ADMINISTRATIVE EXPENSES
22 22GENERAL
GENERAL
ANDAND
ADMINISTRATIVE
ADMINISTRATIVE
EXPENSES
EXPENSES
Staff salaries and related costs
salaries
salaries
and related
and related
costscosts
StaffStaff
Office rental costs and utilities
Office
Office
rentalrental
costscosts
and utilities
and utilities
Repairs and maintenance
Repairs
Repairs
and maintenance
and maintenance
Professional fees
Professional
Professional
fees fees
Travelling expenses
Travelling
Travelling
expenses
expenses
Training
Training
Training
Depreciation
Depreciation
Depreciation
Public relations
Public
Public
relations
relations
Others
Others
Others
Less: costs re-allocated to projects
costscosts
re-allocated
re-allocated
to projects
to projects
Less:Less:
2013
20132013
KD 000’s
KD 000’s
KD 000’s
2012
20122012
KD 000’s
KD 000’s
KD 000’s
15,101
17,336
15,101
15,101
17,336
17,336
289
382
289
289
382 382
120
113
120 120
113 113
2,199
4,329
2,1992,199
4,3294,329
549
866
549 549
866 866
741
714
741 741
714 714
886
868
886 886
868 868
368
511
368 368
511 511
1,962
7,159
1,9621,962
7,1597,159
──────
──────
──────
──────
────── ──────
22,215
32,278
22,215
22,215
32,278
32,278
(15,632)
(16,477)
(15,632)
(15,632)
(16,477)
(16,477)
──────
──────
──────
──────
────── ──────
6,583
15,801
6,5836,583
15,801
15,801
══════
══════
══════
══════
══════ ══════
23
FINANCIAL RISK MANAGEMENT
23 23FINANCIAL
FINANCIAL
RISK
RISK
MANAGEMENT
MANAGEMENT
The Group’s principal financial liabilities comprise trade and other payables, tax liabilities, due to Ultimate Parent
The
Group’s
Group’s
principal
principal
financial
financial
liabilities
liabilities
comprise
comprise
tradetrade
and and
otherother
payables,
payables,
tax liabilities,
tax liabilities,
due to
dueUltimate
to Ultimate
Parent
Parent
The
Company and affiliates, dividends payable and long-term borrowings. The main purpose of these financial instruments
Company
Company
and affiliates,
and affiliates,
dividends
dividends
payable
payable
and long-term
and long-term
borrowings.
borrowings.
The main
The main
purpose
purpose
of these
of these
financial
financial
instruments
instruments
is to manage short-term cash flow and raise finance for the Group’s capital expenditure programme. The Group has
is to ismanage
to manage
short-term
short-term
cash cash
flow flow
and raise
and raise
finance
finance
for the
for Group’s
the Group’s
capital
capital
expenditure
expenditure
programme.
programme.
The The
Group
Group
has has
various financial assets such as trade and other receivables, funds held by Ultimate Parent Company and cash and bank
various
various
financial
financial
assetsassets
suchsuch
as trade
as trade
and other
and other
receivables,
receivables,
fundsfunds
held held
by Ultimate
by Ultimate
Parent
Parent
Company
Company
and cash
and cash
and bank
and bank
balances, that arise directly from its operations.
balances,
balances,
that arise
that arise
directly
directly
fromfrom
its operations.
its operations.
Risk exposures and responses
RiskRisk
exposures
exposures
and and
responses
responses
The Group manages its exposure to key financial risks in accordance with its financial risk management policy. The
The The
Group
Group
manages
manages
its exposure
its exposure
to key
to financial
key financial
risksrisks
in accordance
in accordance
with with
its financial
its financial
risk risk
management
management
policy.
policy.
The The
objective of the policy is to support the delivery of the Group’s financial targets while protecting future financial
objective
objective
of the
of policy
the policy
is toissupport
to support
the delivery
the delivery
of the
of Group’s
the Group’s
financial
financial
targets
targets
whilewhile
protecting
protecting
future
future
financial
financial
security. The main risks that could adversely affect the Group’s financial assets, liabilities or future cash flows are:
security.
security.
The The
mainmain
risksrisks
that that
couldcould
adversely
adversely
affectaffect
the Group’s
the Group’s
financial
financial
assets,
assets,
liabilities
liabilities
or future
or future
cash cash
flowsflows
are: are:
market risks, comprising commodity price risk, cash flow interest rate risk and foreign currency risk; and liquidity risk
market
market
risks,risks,
comprising
comprising
commodity
commodity
priceprice
risk, risk,
cash cash
flowflow
interest
interest
rate risk
rate and
risk foreign
and foreign
currency
currency
risk;risk;
and liquidity
and liquidity
risk risk
and credit risk. Management reviews and agrees policies for managing each of these risks that are summarised below.
and credit
and credit
risk. risk.
Management
Management
reviews
reviews
and agrees
and agrees
policies
policies
for managing
for managing
each each
of these
of these
risksrisks
that are
thatsummarised
are summarised
below.
below.
The Group’s senior management oversees the management of financial risks. The Group’s senior management is
The
Group’s
Group’s
senior
senior
management
management
oversees
oversees
the management
the management
of financial
of financial
risks.risks.
The The
Group’s
Group’s
senior
senior
management
management
is is
The
supported by a Financial Risk Committee that advises on financial risks and the appropriate financial risk governance
supported
supported
by a by
Financial
a Financial
RiskRisk
Committee
Committee
that advises
that advises
on financial
on financial
risksrisks
and the
andappropriate
the appropriate
financial
financial
risk governance
risk governance
framework for the Group. The Financial Risk Committee provides assurance to the Group’s senior management that
framework
framework
for the
for Group.
the Group.
The The
Financial
Financial
RiskRisk
Committee
Committee
provides
provides
assurance
assurance
to thetoGroup’s
the Group’s
senior
senior
management
management
that that
the Group’s financial risk-taking activities are governed by appropriate policies and procedures and that financial risks
the Group’s
the Group’s
financial
financial
risk-taking
risk-taking
activities
activities
are governed
are governed
by appropriate
by appropriate
policies
policies
and procedures
and procedures
and that
and financial
that financial
risksrisks
are identified, measured and managed in accordance with Group policies and risk objectives.
are identified,
are identified,
measured
measured
and managed
and managed
in accordance
in accordance
with with
Group
Group
policies
policies
and risk
and objectives.
risk objectives.
The Board of Directors reviews and agrees policies for managing these risks which are summarised below.
The Board
of Directors
of Directors
reviews
reviews
and agrees
and agrees
policies
policies
for managing
for managing
thesethese
risksrisks
which
which
are summarised
are summarised
below.
below.
The Board
Market risk
Market
risk risk
Market
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
Market
Market
risk risk
is theis risk
the risk
that that
the fair
the value
fair value
or future
or future
cash cash
flowsflows
of a of
financial
a financial
instrument
instrument
will will
fluctuate
fluctuate
because
because
of of
changes in market prices. Market risk comprises of three types of risks: equity price risk, foreign currency risk and
changes
changes
in market
in market
prices.
prices.
Market
Market
risk risk
comprises
comprises
of three
of three
typestypes
of risks:
of risks:
equity
equity
priceprice
risk, risk,
foreign
foreign
currency
currency
risk risk
and and
interest rateForeign
risk. The Group
is not exposed
to equity price
risk.
Kuwait
Petroleum
Company
interest
interest
rate risk.
rate risk.
The Group
The
Group
is notisexposed
notExploration
exposed
to equity
to equity
price
price
risk. risk. K.S.C. (Closed) and Subsidiaries
NOTES
TO
THE
Commodity
price
riskCONSOLIDATED FINANCIAL STATEMENTS
Commodity
Commodity
priceprice
risk risk
At
31
December
2013
The Group is exposed to the risk of fluctuations in prevailing market commodity prices on the mix of oil and gas
The The
Group
Group
is exposed
is exposed
to the
to risk
the risk
of fluctuations
of fluctuations
in prevailing
in prevailing
market
market
commodity
commodity
prices
prices
on the
on mix
the mix
of oilofand
oil gas
and gas
products it produces. The Group’s policy is to manage these risks through the use of contract based prices with
products
products
it produces.
it produces.
The The
Group’s
Group’s
policy
policy
is toismanage
to manage
thesethese
risksrisks
through
through
the use
the of
usecontract
of contract
basedbased
prices
prices
with with
customers
and derivative
commodity
contracts and
to keep between 20% and 40% of its production on fixed price.
23
FINANCIAL
RISK
MANAGEMENT
(continued)
customers
customers
and derivative
and derivative
commodity
commodity
contracts
contracts
and to
and
keep
to keep
between
between
20%20%
and 40%
and 40%
of itsofproduction
its production
on fixed
on fixed
price.price.
Foreign currency risk
Foreign currency risk is the risk that the fair values or future cash flows of a financial instrument will fluctuate due to
changes in foreign exchange rates. The Group is exposed to foreign exchange risk arising from various currency
exposures, primarily with respect to the Australian Dollar and Kuwaiti Dinar. Foreign exchange risk arises from future
commercial transactions and recognised monetary assets and liabilities. The Group manages foreign currency risk by
maintaining exposures to currencies that do not significantly fluctuate against the US Dollar.
39 a result of foreign exchange gains/losses on translation of
The Group is primarily exposed to foreign currency risk
39 as39
foreign currency denominated assets and liabilities such as bank balances, trade and other receivables, due from
Ultimate Parent Company and affiliates and trade and other payables.
62
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
At 31 December 2013
23
Kuwait Foreign
Petroleum Exploration Company K.S.C. (Closed) And Subsidiaries
FINANCIAL RISK MANAGEMENT
(continued)
Kuwait
Foreign
Company K.S.C. (Closed) and Subsidiaries
Foreign TO
currency
riskPetroleum Exploration
NOTES
THE CONSOLIDATED
FINANCIAL STATEMENTS
Foreign
currency
risk
is
the
risk
that
the
fair
values
or
future
cash flows
of a financial instrument will fluctuate due to
NOTES
TO
THE
CONSOLIDATED
FINANCIAL
STATEMENTS
At 31 December 2013
changes
in
foreign
exchange
rates.
The
Group
is
exposed
to
foreign
exchange
risk arising from various currency
At 31 December 2013
exposures, primarily with respect to the Australian Dollar and Kuwaiti Dinar. Foreign exchange risk arises from future
commercial transactions and recognised monetary assets and liabilities. The Group manages foreign currency risk by
23
FINANCIAL RISK MANAGEMENT (continued)
maintaining exposures to currencies that do not significantly fluctuate against the US Dollar.
Foreign currency risk
The Group is primarily exposed to foreign currency risk as a result of foreign exchange gains/losses on translation of
Foreign currency risk is the risk that the fair values or future cash flows of a financial instrument will fluctuate due to
foreign currency denominated assets and liabilities such as bank balances, trade and other receivables, due from
changes in foreign exchange rates. The Group is exposed to foreign exchange risk arising from various currency
Ultimate Parent Company and affiliates and trade and other payables.
exposures, primarily with respect to the Australian Dollar and Kuwaiti Dinar. Foreign exchange risk arises from future
commercial transactions and recognised monetary assets and liabilities. The Group manages foreign currency risk by
The analysis below shows the effect of a 10% strengthening in the foreign currency rates against the US Dollar, with
maintaining exposures to currencies that do not significantly fluctuate against the US Dollar.
all other variables held constant on the profit for the year. A positive amount in the table reflects a net potential
increase in the profit for the year, while a negative amount reflects a net potential decrease. There have been no
The Group is primarily exposed to foreign currency risk as a result of foreign exchange gains/losses on translation of
changes in the method and the assumptions used in the preparation of the sensitivity analysis as compared to the prior
foreign currency denominated assets and liabilities such as bank balances, trade and other receivables, due from
year.
Ultimate Parent Company and affiliates and trade and other payables.
2012
2013
KD
KD
000’s
The analysis below shows the effect of a 10% strengthening in the foreign currency rates against the US Dollar,000’s
with
Impact
consolidated
income statement
all otheronvariables
held constant
on the profit for the year. A positive amount in the table reflects a net potential
Australian
376no
(1,371)
increase inDollars
the profit for the year, while a negative amount reflects a net potential decrease.
There have been
changes Dinar
in the method and the assumptions used in the preparation of the sensitivity analysis (224)
as compared to the(334)
prior
Kuwaiti
year.
Other
(421)
1,041
2012
2013
KD of
000’s
A 10% weakening of the above currencies against the KD would have had an equal, KD
but 000’s
opposite, effect
the
amounts
shown
above, with
all other
variables held constant.
Impact on
consolidated
income
statement
Australian Dollars
376
(1,371)
Interest
rate risk
Kuwaiti Dinar
(334)
(224)
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
Other
(421)
1,041
changes in market interest rates.
A 10% weakening of the above currencies against the KD would have had an equal, but opposite, effect of the
The Group’s interest rate risk arises from long-term borrowing and surplus funds with the Parent Company. The
amounts shown above, with all other variables held constant.
Group manages interest rate risk by monitoring interest rate movements and by borrowing at market linked interest
rates and placing time deposits at the best available rates.
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
At 31 December 2013, if interest rates at that date had been 50 basis points higher/lower with all other variables held
changes in market interest rates.
constant, consolidated profit for the year would have been higher/lower by KD 1,058 thousand (2012: consolidated
profit for the year would have been lower/higher by KD 64 thousand).
The Group’s interest rate risk arises from long-term borrowing and surplus funds with the Parent Company. The
Group manages interest rate risk by monitoring interest rate movements and by borrowing at market linked interest
Credit risk management
rates and placing time deposits at the best available rates.
Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation causing the other party
to incur a financial loss. Financial assets, which potentially subject the Group to credit risk, consist principally of bank
At 31 December 2013, if interest rates at that date had been 50 basis points higher/lower with all other variables held
balances, Funds held by Parent Company, trade and other receivables and due from Ultimate Parent Company and
constant, consolidated profit for the year would have been higher/lower by KD 1,058 thousand (2012: consolidated
affiliates. The Group manages this risk by placing its bank balances with high credit rated institutions and by dealing
profit for the year would have been lower/higher by KD 64 thousand).
with only reputed multinational customers or government companies. The Group considers the credit quality of
amounts that are neither past due nor impaired to be good. For more information refer to Note 7.
Credit risk management
Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation causing the other party
Liquidity risk management
to incur a financial loss. Financial assets, which potentially subject the Group to credit risk, consist principally of bank
Liquidity risk is the risk that the Group may not be able to meet its funding requirements. The Group manages this risk
balances, Funds held by Parent Company, trade and other receivables and due from Ultimate Parent Company and
by maintaining sufficient cash and bank balances and availability of funding from committed credit facilities and
affiliates. The Group manages this risk by placing its bank balances with high credit rated institutions and by dealing
borrowings. The Company’s Board of Directors increases capital or borrowings based on ongoing review of funding
with only reputed multinational customers or government companies. The Group considers the credit quality of
requirements. As at 31 December 2013, the Groups’ current liabilities exceed its current assets by KD 48,187
amounts that are neither past due nor impaired to be good. For more information refer to Note 7.
thousand (31 December 2012: KD 310,813 thousand). The Group believes that this will not have any impact on its
operations because of the significant surplus operating cash flows, its ability to borrow from banks and the ongoing
Liquidity risk management
financial support from the Ultimate Parent Company.
Liquidity risk is the risk that the Group may not be able to meet its funding requirements. The Group manages this risk
by maintaining sufficient cash and bank balances and availability of funding from committed credit facilities and
borrowings. The Company’s Board of Directors increases capital or borrowings based on ongoing review of funding
requirements. As at 31 December 2013, the Groups’ current liabilities exceed its current assets by KD 48,187
thousand (31 December 2012: KD 310,813 thousand). The Group believes that this will not have any impact on its
operations because of the significant surplus operating40cash flows, its ability to borrow from banks and the ongoing
financial support from the Ultimate Parent Company.
63
40
Kuwait
Kuwait
Foreign
Foreign
Petroleum
Petroleum
Exploration
Exploration
Company
Company
K.S.C.
K.S.C.
(Closed)
(Closed)
andand
Subsidiaries
Subsidiaries
Kuwait
Foreign
Petroleum
Exploration
Company
K.S.C.
(Closed)
and
Subsidiaries
Kuwait
Foreign
Petroleum
Exploration
Company
K.S.C.
(Closed)
and
Subsidiaries
NOTES
NOTES
TOTOTO
THE
THE
CONSOLIDATED
CONSOLIDATED
FINANCIAL
FINANCIAL
STATEMENTS
STATEMENTS
NOTES
THE
CONSOLIDATED
FINANCIAL
STATEMENTS
NOTES
TO
THE
CONSOLIDATED FINANCIAL
FINANCIAL STATEMENTS
STATEMENTS
At 31NOTES
At
31
December
2013
2013CONSOLIDATED
TO
THE
AtDecember
31 December
2013
At
31
December
2013
At 31
31 December
December 2013
2013
At
23 23FINANCIAL
FINANCIAL
RISKRISK
MANAGEMENT
MANAGEMENT
(continued)
(continued)
23
FINANCIAL
RISK
MANAGEMENT
(continued)
23
FINANCIAL
RISK
MANAGEMENT
(continued)
23
FINANCIAL RISK MANAGEMENT (continued)
Liquidity
Liquidity
risk management
risk management
(continued)
(continued)
Liquidity
risk
management
The table
The
table
below
below
analyses
analyses
the(continued)
Group’s
financial
financial
liabilities
liabilities
into relevant
into relevant
maturity
maturity
groupings
groupings
basedbased
on the
on remaining
the remaining
Liquidity
risk
management
(continued)
Foreign
currency
riskthe Group’s
The
table
below
analyses
the
Group’s
financial
liabilities
into
relevant
maturity
groupings
on
the
remaining
period
period
at the
atcurrency
consolidated
the
consolidated
ofthat
financial
of
position
to
date
the
tocontractual
the
contractual
maturity
date.
date.
Thebased
amounts
Thewill
amounts
disclosed
disclosed
The
table
below
analyses
the
financial
liabilities
into
relevant
groupings
based
onfluctuate
the
remaining
Foreign
risk statement
is thestatement
riskGroup’s
thefinancial
fairposition
values
ordate
future
cash
flows
ofmaturity
amaturity
financial
instrument
due to
period
at
the
consolidated
statement
of
financial
position
date
to
the
contractual
maturity
date.
The
amounts
disclosed
in thechanges
in
table
the table
are
the
are
contractual
the contractual
undiscounted
undiscounted
cash
cash
flows.
flows.
period
atin
the
consolidated
statement
of
financial
position
datetotoforeign
the contractual
date. from
The amounts
foreign
exchange
rates.
The
Group
is
exposed
exchangematurity
risk arising
various disclosed
currency
in
are
undiscounted
cash
in the
the table
tableprimarily
are the
the contractual
contractual
undiscounted
cash flows.
flows.
exposures,
with respect
to the Australian
Dollar and Kuwaiti Dinar. Foreign exchange risk arises from future
Fair commercial
Fair
valuevalue
of financial
oftransactions
financial
instruments
instruments
and recognised monetary assets and liabilities. The Group manages foreign currency risk by
Fair
value
of
financial
At the
At
the
consolidated
statement
statement
of financial
of that
financial
date, date,
thefluctuate
fair
the fair
value
value
of the
the
of US
Group’s
theDollar.
Group’s
financial
financial
instruments
instruments
Fairconsolidated
value
ofexposures
financial
instruments
maintaining
toinstruments
currencies
doposition
not position
significantly
against
At
consolidated
statement
of
approximate
approximate
their
respective
respective
carrying
carrying
values.
values. position
At the
the their
consolidated
statement
of financial
financial
position date,
date, the
the fair
fair value
value of
of the
the Group’s
Group’s financial
financial instruments
instruments
approximate
their
respective
carrying
values.
approximate
their
respective
carrying
values.
The Group is primarily exposed to foreign currency risk as a result of foreign exchange gains/losses on translation of
At 31foreign
AtDecember
31 December
20132013
currency
denominated assets and liabilities such as bank balances, trade and other receivables, due from
At
31
December
2013
Weighted
Weighted
At
31
December
2013 and affiliates and trade and other payables.
Ultimate Parent Company
Weighted
Between
Between
average
average
Weighted
Between
average
Less
than than in 1the
and
15and 5currency
MoreMore
than
than
Total
effective
effective
Between
average
The analysis below shows the effect of a 10%Less
strengthening
foreign
rates
against Total
the US
Dollar,
with
Less
than
1
and
5
More
than
Total
effective
1 Less
year
1 year
years
years
5 More
years
years
interest
interest
rate
rate
Financial
Financial
liabilities
liabilitiesheld constant on the profit for
than
1 and
5
than
effective
all
other
variables
the
year. A positive
amount
in 5the
table reflects Total
a net
potential
year
years
years
interest
Financial
1000’s
year KD
years
5 000’s
years
interest
rate
Financialinliabilities
liabilities
KD 000’s
KD1
000’s
KD 000’s
000’s
KD5
KD There
000’s
KD 000’s
% rate
%
increase
the profit for the year, while a negative
amount
reflects
a net KD
potential
decrease.
have been
no
000’s
KD
000’s
KD
KD
000’s
KD
000’s
KDanalysis
000’s as compared
KD 000’s
000’sto the prior %
%
changes in the method and the assumptions used inKD
the000’s
preparationKD
of the
sensitivity
Tradeyear.
Trade
and other
and other
payables
payables
118,823
118,823
118,823
118,823
Trade
and
118,823
118,823
2013
Trade
and other
other payables
payables
118,823
118,823 2012
Tax liability
Tax
liability
103,816
103,816
--103,816
103,816
-Tax
liability
103,816
--- KD 000’s
103,816
-Tax
liability
103,816
103,816
Due to
Due
Parent
to Parent
Company
Company
and affiliates
and affiliates
17,856
17,856
17,856
17,856 KD 000’s
Due
to
Parent
Company
and
affiliates
17,856
17,856
-Impact
on
consolidated
income
statement
Due
to
Parent
Company
and
affiliates
17,856
17,856
Dividends
Dividends
payable
payable
239,955
239,955
239,955
239,955
Dividends
payable
239,955
239,955
-Australian
Dollars
376 1.56%
(1,371)
Dividends
payable
239,955
Long-term
Long-term
borrowing
borrowing
-239,955
211,538
211,538
211,538
211,538
1.56%
Long-term
borrowing
211,538
211,538
1.56%
Kuwaiti
Dinar
(334)1.56%
Long-term
borrowing
211,538
(224)211,538
Deferred
Deferred
consideration
consideration
payable
payable
for anfor an
Deferred
acquisition
acquisition
7,3247,324
14,648
14,648 1,041
21,972
21,972
Other
(421)
Deferred consideration
consideration payable
payable for
for an
an
acquisition
-- ───────
7,324
14,648
21,972
-acquisition
7,324
14,648
21,972
───────
───────
───────
───────
───────
───────
───────
───────
───────
───────
───────
A 10% weakening of the above currencies 480,450
against
the KD 218,862
would
have had───────
an equal,
opposite,
effect of the
───────
───────
───────
480,450
218,862
14,648
14,648but713,960
713,960
218,862
14,648
713,960
amounts shown above, with all other variables
held480,450
constant.
480,450
218,862═══════
14,648═══════
713,960
═══════
═══════
═══════
═══════
═══════
═══════
═══════
═══════ ═══════
═══════ ═══════
═══════ ═══════
═══════
Commitments
Commitments
Interest
rate risk
Commitments
Commitments
Capital
Capital
commitments
commitments
for future
for future
exploration
exploration
Interest commitments
rate risk is the risk
that the fair value or future cash flows of a financial instrument will fluctuate because of
and Capital
development
and development
508,978 187,238
187,238
Capital
commitments for
for future
future exploration
exploration 508,978
changes
in market interest rates.
and
508,978
187,238
and development
development
508,978
187,238
═══════
═══════
═══════
═══════
═══════
═══════
═══════ ═══════
interest
At 31The
AtDecember
31Group’s
December
2012
2012 rate risk arises from long-term borrowing and surplus funds with the Parent Company. The
At
31
December
2012
Group
manages interest
interest
At 31 December
2012 rate risk by monitoring interest rate movements and by borrowing at market linkedWeighted
Weighted
Weighted
rates and placing time deposits at the best available rates.
Between
Between
average
average
Weighted
Between
average
Less Less
than than 1 and
15and 5 MoreMore
than than
TotalTotal effective
effective
Between
average
than
1
and
5
More
than
Total
effective
At
31liabilities
December
2013, if interest rates at that date
had
been
50
basis
points
higher/lower
with
all
other
variables
held
Financial
Financial
liabilities
1 Less
year
1
year
years
years
5
years
5
years
interest
interest
rate
rate
Less than
1 and 5
More than
Total
effective
Financial
liabilities
1
year
years
5
years
interest
constant,
profit for the year would
have
been
higher/lower
by
KD
1,058
thousand
(2012:
consolidated
Financial consolidated
liabilities
1
year
years
5
years
interest
rate
KD 000’s
KD 000’s KD 000’s
KD 000’s KD 000’s
KD 000’s KD 000’s
KD 000’s
% rate
%
000’s
KD
000’s
KD
000’s
KD
000’s
%
profit for the year would have been lower/higher byKD
KD
64
thousand).
KD 000’s
KD 000’s
KD 000’s
KD 000’s
%
TradeTrade
and other
and other
payables
payables
88,906
88,906
88,906
88,906
Credit
riskother
management
Trade
and
payables
88,906
88,906
Trade
and
other
payables
88,906
88,906
Tax liability
Tax
liability
84,242
84,242
--84,242
84,242
-Credit
risk is the risk that one party to a financial instrument
will fail to -discharge an obligation
causing
the other partyTax
liability
84,242
84,242
Tax
liability
84,242
84,242
Due to
Due
Parent
to Parent
Company
Company
and affiliates
and affiliates
186,824
186,824
186,824
186,824
to
incurParent
a financial
loss. Financial
assets, which potentially
subject the Group
to credit risk,
principally
of bankDue
Company
186,824
- consist
186,824
Due to
topayable
Parent
Company and
and affiliates
affiliates
186,824
186,824
Dividends
Dividends
payable
193,981
193,981
193,981
193,981
balances,
Funds
held by Parent Company, trade and
other receivables- and due from Ultimate
Parent
Company and-Dividends
payable
193,981
193,981
Dividends
payable
193,981
193,981
Long-term
Long-term
borrowing
borrowing
12,857
12,857
12,857
12,857
0.7%0.7%
affiliates. The Group manages this risk by placing its bank balances with high credit rated institutions and by dealing
Long-term
borrowing
12,857
12,857
0.7%
Long-term
borrowing
12,857
12,857
0.7%
───────
───────
───────
───────
───────
───────
───────
with only reputed multinational customers
or───────
government
companies.
The
Group
considers
the credit quality of
───────
───────
───────
───────
───────
───────
───────
───────
- information
- to-Note 7.566,810
566,810
amounts that are neither past due nor impaired 566,810
to
be566,810
good. For more
refer
566,810
-- ═══════
-- ═══════
566,810
566,810
566,810
═══════
═══════
═══════
═══════
═══════
═══════
═══════
═══════
═══════
═══════
Liquidity
risk management
═══════ ═══════ ═══════ ═══════
Commitments
Commitments
Commitments
Liquidity
risk is the
the exploration
Group may not be able to meet its funding requirements. The Group manages this risk
Commitments
Capital
Capital
commitments
commitments
for risk
future
forthat
future
exploration
Capital
commitments
for
maintaining
sufficient
cash exploration
and bank balances
and availability
of funding from committed credit facilities and
and by
development
and
development
504,700
504,700
82,558
82,558
Capital
commitments
for future
future
exploration
and
504,700
borrowings.
The Company’s Board of Directors
increases
capital
or82,558
borrowings based on ongoing review of funding
and development
development
504,700
82,558
═══════
═══════
═══════
═══════
requirements. As at 31 December 2013, the ═══════
Groups’
current
liabilities
═══════
═══════ ═══════ exceed its current assets by KD 48,187
thousand (31 December 2012: KD 310,813 thousand). The Group believes that this will not have any impact on its
operations because of the significant surplus operating cash flows, its ability to borrow from banks and the ongoing
financial support from the Ultimate Parent Company.
41 41
41
41
40
64
Kuwait Foreign Petroleum Exploration Company K.S.C. (Closed) And Subsidiaries
Kuwait
Foreign
Petroleum Exploration
Company K.S.C. (Closed) and Subsidiaries
NOTES TO
THE CONSOLIDATED
FINANCIAL STATEMENTS
NOTES
TO THE
At 31 December
2013 CONSOLIDATED FINANCIAL STATEMENTS
At 31 December 2013
24
CAPITAL RISK MANAGEMENT
The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going concern,
provide return on investment to the Parent Company and to maintain an optimal capital structure to reduce the cost of
capital.
The Group manages its capital to ensure that it will be able to continue as a going concern while maximising the return
to the shareholder through the optimisation of the debt and equity balance. The Group's overall strategy remains
unchanged from previous year.
Consistent with others in the industry, the Group monitors capital on the basis of the gearing ratio. This ratio is
calculated as net debt divided by total equity. Net debt is calculated as total borrowings less cash and cash equivalents.
Total capital is calculated as equity (as shown in the consolidated statement of financial position) plus net debt.
Gearing ratio
The gearing ratio at year end was as follows:
Total Borrowing (note 21)
Due to Ultimate Parent Company and affiliates (Note 6)
Less: Cash and cash equivalents (note 5)
Less: Funds held by Parent Company (note 6)
Net debt
Total Equity
Total Capital
Gearing ratio
65
2013
KD 000's
2012
KD 000's
211,538
17,856
(40,708)
(160,769)
──────
27,917
640,210
──────
668,127
──────
4%
══════
12,857
186,824
(27,916)
(16,875)
──────
154,890
362,117
──────
517,007
──────
30%
══════
25
CONTINGENT LIABILITIES
a)
Pursuant to the Group's interest in a joint venture in Australia encompassing production from the Harriet Field
and various exploration permits, KUFPEC Australia Pty Ltd ("KAPL") has entered into three deeds of cross
charge in favour of each of the other participants for the purpose of securing the Group's obligations under the
Joint Venture Agreement. The cross charges comprise a prior ranking charge over the Group's interest in the
joint venture to a limit of Australian Dollars 250 million (KD 73 million).
b)
As a result of a pipeline explosion on Varanus Island, offshore North West Australia on 3 June 2008, KUFPEC
Australia Pty Ltd ("KAPL") and its co-venturers ("the HJV") have the following civil claims filed against the
HJV and the operator (1) by one of the gas buyers in March 2011. KAPL and the other HJV co-venturers are
committed to defend their contractual position as the gas sales agreement contains express provisions limiting
the liability of the gas sellers, including Force Majeure and liquidated damages. The parties are now in the
discovery process, and (2) by a third party gas user in October 2013. The HJV parties are not gas sellers to the
third party gas user. KAPL, the other HJV parties and the operator intend to vigorously defend their legal
position. The defendants have filed their defences.
42
Net debt
Total Equity
154,890
27,917
362,117
640,210
──────
──────
Total Capital
517,007
668,127
──────
──────
Kuwait
Foreign
Exploration
Company
K.S.C.
(Closed)
and and
Subsidiaries
Kuwait
Foreign
Petroleum
Exploration
Company
K.S.C.
(Closed)
Subsidiaries
NOTES
TO
THEPetroleum
CONSOLIDATED
FINANCIAL
STATEMENTS
Gearing
ratio
30%
4%
At 31TO
December
2013
NOTES
THE
CONSOLIDATED
FINANCIAL
STATEMENTS
NOTES
TO THE
CONSOLIDATED
FINANCIAL
STATEMENTS
══════
══════
At 31 December 2013
At 31 December 2013
23
25FINANCIAL
CONTINGENT
LIABILITIES (continued)
RISK MANAGEMENT
25
CONTINGENT
LIABILITIES (CONTINUED)
Foreign
riskto the Group's interest in a joint venture in Australia encompassing production from the Harriet Field
a) currency
Pursuant
c) currency
On various
23
KUFPEC
Australia
Pty cash
Ltd ("KAPL')
a Notice
of Force
("HJV
Foreign
riskNovember
is the
risk2006,
that the
fair values
or future
flows
of ("KAPL")
aissued
financial
instrument
will
fluctuate
dueoftoForce
and
exploration
permits,
KUFPEC
Australia
Pty
Ltd
has
entered
intoMajeure
three deeds
cross
Majeure")
to
a
gas
buyer
of
the
Harriet
Joint
Venture
("HJV").
Three
of
the
four
limbs
of
the
HJV
Force
changes in foreign
exchange
Group
exposed toforforeign
exchange
risk arising
from various
currency
charge in
favour ofrates.
each The
of the
otherisparticipants
the purpose
of securing
the Group's
obligations
under
the
Majeure
continue
to be
Any charges
claim
relation
toa any
shortfall
incharge
gas
supply
under
the from
relevant
contract
exposures, primarily
with
respect
to in
theforce.
Australian
Dollarinand
Kuwaiti
Dinar.
Foreign
exchange
future
Joint
Venture
Agreement.
The
cross
comprise
prior
ranking
overrisk
the arises
Group's
interest
in the
is
subject
toand
thea recognised
HJV of
Force
Majeure
and the
sellers'
limitation
liabilities
set out
in therisk
contract.
commercial joint
transactions
monetary
assets
andHJV
liabilities.
Group of
manages
foreign
currency
by In
venture
to
limit
Australian
Dollars
250
million
(KDThe
73 million).
September
2011,
the
court
heard
KAPL
and
its
co-venturers'
application
for
declaratory
judgment
on
the
correct
maintaining exposures to currencies that do not significantly fluctuate against the US Dollar.
construction
of
the
Gas
Sales
Agreement
("GSA").The
parties
entered
into
discussions
on
the
matters
in
b)
As a result of a pipeline explosion on Varanus Island, offshore North West Australia on 3 June 2008, KUFPEC
dispute,
and
on
1st
November
2012
the
parties
signed
Settlement
Principles.
The
court
has
been
requested
to
The Group isAustralia
primarilyPty
exposed
to foreignand
currency
risk as a result
of foreign
gains/losses
on translation
of the
Ltd ("KAPL")
its co-venturers
("the HJV")
haveexchange
the following
civil claims
filed against
defer
indefinitely
the
finalizing
of
the
judgment.
The
settlement
deed
has
been
signed
by
KAPL
and
the
gas
foreign currency
denominated
assets
andone
liabilities
such
as bank
balances,
andand
other
due from are
HJV and
the operator
(1) by
of the gas
buyers
in March
2011.trade
KAPL
the receivables,
other HJV co-venturers
buyer
on 17toApril
2014.
Ultimate Parent
Company
and
affiliates
and trade and
other payables.
committed
defend
their contractual
position
as the gas sales agreement contains express provisions limiting
the liability of the gas sellers, including Force Majeure and liquidated damages. The parties are now in the
26
ANNUAL
GENERAL
ASSEMBLY
ANDgas
PROPOSED
DIVIDEND
The analysis
below shows
the effect
of by
a 10%
strengthening
in the
foreign
currency
withto the
discovery
process,
and (2)
a third
party
user
in October
2013. Therates
HJVagainst
partiesthe
areUS
notDollar,
gas sellers
all other variables
held gas
constant
the profit
for the
A positive
the table
reflects a net
potential
third party
user. on
KAPL,
the other
HJVyear.
parties
and the amount
operatorinintend
to vigorously
defend
their legal
increase
the
profit
for defendants
the year, while
a 16
negative
amount
reflects
net potentialfinancial
decrease.
There have
been
noended
TheinAnnual
General
Assembly
held
July 2013
approved
theaconsolidated
statements
for the
year
position.
The
haveon
filed
their
defences.
changes
the method
andand
thethe
assumptions
used
thedividends
preparation
the44,331
sensitivity
analysis
to the
31 in
December
2012
distribution
of in
cash
of of
KD
thousand
for as
thecompared
year ended
31 prior
December
year. 2012. The Board of Directors propose to distribute cash dividends of KD 38,614 thousand for the year ended 31
2012
December 2013. This proposal is subject to the approval of the Annual General Assembly.
2013
KD 000’s
KD 000’s
Impact on consolidated income statement
27
SUBSEQUENT EVENTS
Australian Dollars
376
(1,371)
Kuwaiti
Dinar
(334)
(224)
On 17 January 2014, the Group entered into an agreement with Shell Development (Australia Pty Ltd) to purchase an
Other8% equity interest in the Wheatstone-Iago Joint Venture and 6.4% interest in the 1,041
8.9 million tones (421)
per annum
Wheatstone liquefied natural gas (LNG) project in Western Australia.
A 10% weakening of the above currencies against the KD would have had an equal, but opposite, effect of the
42
amounts
shown above,
all other
variables
held utilised
constant.an additional US Dollars 250,000 thousand from its long-term
Subsequent
to thewith
reporting
date
the Group
borrowing facility.
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in market interest rates.
The Group’s interest rate risk arises from long-term borrowing and surplus funds with the Parent Company. The
Group manages interest rate risk by monitoring interest rate movements and by borrowing at market linked interest
rates and placing time deposits at the best available rates.
At 31 December 2013, if interest rates at that date had been 50 basis points higher/lower with all other variables held
constant, consolidated profit for the year would have been higher/lower by KD 1,058 thousand (2012: consolidated
profit for the year would have been lower/higher by KD 64 thousand).
Credit risk management
Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation causing the other party
to incur a financial loss. Financial assets, which potentially subject the Group to credit risk, consist principally of bank
balances, Funds held by Parent Company, trade and other receivables and due from Ultimate Parent Company and
affiliates. The Group manages this risk by placing its bank balances with high credit rated institutions and by dealing
with only reputed multinational customers or government companies. The Group considers the credit quality of
amounts that are neither past due nor impaired to be good. For more information refer to Note 7.
Liquidity risk management
Liquidity risk is the risk that the Group may not be able to meet its funding requirements. The Group manages this risk
by maintaining sufficient cash and bank balances and availability of funding from committed credit facilities and
borrowings. The Company’s Board of Directors increases capital or borrowings based on ongoing review of funding
requirements. As at 31 December 2013, the Groups’ current liabilities exceed its current assets by KD 48,187
thousand (31 December 2012: KD 310,813 thousand). The Group believes that this will not have any impact on its
operations because of the significant surplus operating cash flows, its ability to borrow from banks and the ongoing
financial support from the Ultimate Parent Company.
40
43
66
67
SUBSIDIARIES
–
–
Cayman Islands
Cayman Islands
Cayman Islands
Cayman Islands
Cayman Islands
Bahamas
Netherlands
Cayman Islands
Bermuda
Bermuda
Bermuda
KUFPEC (Malaysia) Ltd
KUFPEC (Yemen) Ltd
KUFPEC (Aden) Ltd
KUFPEC Yemen (Mukallah) Ltd
KUFPEC (Holdings) Ltd
KUFPEC Seram Ltd
KUFPEC Indonesia (Onshore) B.V
KUFPEC (Malaysia Sabah) Ltd
International Energy Development
Corporation (Congo) Ltd
International Energy Development
Corporation (Egypt) Ltd
International Energy Development
Corporation (Sudan) Ltd
44
Malaysia
Yemen
Yemen
–
Global
–
Indonesia
–
–
Cayman Islands
Cayman Islands
Cayman Islands
Cayman Islands
Cayman Islands
KUFPEC (Indonesia) Ltd
KUFPEC (Algeria) Ltd
KUFPEC (South Sudan) Ltd
KUFPEC Regional Ventures (Indonesia) Ltd
KUFPEC (Tunisia) Ltd
Indonesia
Algeria
South Sudan
Indonesia
Tunisia
China
–
Egypt
Panama
United Kingdom
Cayman Islands
KUFPEC (China) Inc.
KUFPEC (Italy) Ltd
KUFPEC (Egypt) Ltd
Country of Operation
Country of Incorporation
Company's Name
The principal wholly owned subsidiaries of the Group are:
28
At 31 December 2013
Kuwait Foreign Petroleum Exploration Company K.S.C. (Closed) and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES
TO THE
At
31 December
2013 CONSOLIDATED FINANCIAL STATEMENTS
Dormant
Dormant
Oil & Gas Exploration / Development / Production
Dormant
Area office, Market survey. Oil & Gas Exploration /
Development / Production.
Oil & Gas Exploration / Development / Production
Oil & Gas Exploration / Development / Production
Oil & Gas Exploration / Development / Production
Area office & Market survey
Area office, Market survey. Oil & Gas Exploration /
Development / Production.
Oil & Gas Exploration / Development / Production
Oil & Gas Exploration / Development / Production
Oil & Gas Exploration / Development / Production
Dormant
Oil & Gas Exploration / Development / Production
Dormant
Dormant
Dormant
Dormant
Type of Activity
Kuwait Foreign Petroleum Exploration Company K.S.C. (Closed) And Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
At 31 December 2013
68
Country of Incorporation
Netherlands
Australia
Australia
Australia
Australia
Australia
Australia
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
United Kingdom
Japan
Cayman Islands
Cayman Islands
Cayman Islands
Cayman Islands
Cayman Islands
Cayman Islands
Energy Development Corporation B.V.
KUFPEC Australia Pty Ltd
KUFPEC (Perth) Pty Ltd
Varanus Pty Ltd
KUFPEC Australia (Julimar) Pty Ltd
KUFPEC Australia (WA 356 Permit) Pty Ltd
KUFPEC Australia (Wheatstone Iago) Pty Ltd
KUFPEC (Finance) B.V.
KUFPEC (Italy) B.V
KUFPEC Philippines (Onshore) B.V
KUFPEC (Pakistan) B.V
KUFPEC Indonesia (Natuna) B.V.
KUFPEC Pakistan Holdings B V.
PKP Kirthar B.V.
Mauritania Holdings B.V.
PKP Exploration 2 Ltd
PKP Kadanwari Ltd
KUFPEC (Ivory Coast) Ltd
KUFPEC Philippines (SC-46) Ltd
KUFPEC Indonesia (Buton) Ltd
KUFPEC Malaysia (SB 312) Ltd
KUFPEC Philippines (SC-60) Ltd
KUFPEC Corporate Ltd
SUBSIDIARIES (continued)
Company's Name
28
At 31 December 2013
45
Australia
Australia
Australia
Australia
Australia
–
–
–
Pakistan
Indonesia
Pakistan
Pakistan
Mauritania
Pakistan
Pakistan
Ivory Coast
–
Indonesia
Malaysia
Philippines
–
Australia
Australia
Country of Operation
Kuwait Foreign Petroleum Exploration Company K.S.C. (Closed) and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES
TO THE
At
31 December
2013 CONSOLIDATED FINANCIAL STATEMENTS
Holding company
Area office, Oil & Gas Exploration / Development /
Production, Market survey
Oil & Gas Exploration / Development / Production
Dormant
Oil & Gas Exploration / Development / Production
Oil & Gas Exploration / Development / Production
Oil & Gas Exploration / Development / Production
Dormant
Dormant
Dormant
Oil & Gas Exploration / Development / Production
Oil & Gas Exploration / Development / Production
Market survey and Holding Company
Oil & Gas Exploration / Development / Production
Oil & Gas Exploration / Development / Production
Oil & Gas Exploration / Development / Production
Oil & Gas Exploration / Development / Production
Oil & Gas Exploration / Development / Production
Dormant
Oil & Gas Exploration / Development / Production
Oil & Gas Exploration / Development / Production
Oil & Gas Exploration / Development / Production
Dormant
Type of Activity
69
Country of Incorporation
Cayman Islands
Cayman Islands
Cayman Islands
Cayman Islands
Cayman Islands
Cayman Islands
Cayman Islands
Cayman Islands
United Kingdom
Netherlands
Netherlands
Cayman Islands
Cayman Islands
Canada
Norway
Singapore
Singapore
Singapore
Netherlands
Netherlands
Netherlands
British Virgin Islands
Singapore
British Virgin Islands
America
Bermuda
28
SUBSIDIARIES (continued)
Company's Name
KUFPEC Syria (Block 17) Ltd
KUFPEC NS Investment Ltd
KUFPEC Congo (Marine IX) Ltd
KUFPEC Vietnam (Block 19) Ltd
KUFPEC Vietnam (Block 20) Ltd
KUFPEC Vietnam (Block 51) Ltd
KUFPEC Bangladesh Ltd
KUFPEC UK (Holdings) Ltd
KUFPEC UK Ltd
KUFPEC Pakistan (Kirthar Holdings) B.V.
Kirthar Pakistan B.V.
KUFPEC North Sea Ltd
KUFPEC Singapore Holding Ltd
KUFPEC Canada Bull Inc.
KUFPEC Norway AS (Norske)
Risco Energy Pte Ltd
Risco Energy (Philippines) Holdings Pte Ltd
Risco Energy Indonesia Holdings Pte Ltd
Risco Energy (SES & ONWJ) B.V.
Risco Energy SES B.V.
Risco Energy ONWJ B.V.
KUFPEC Indonesia CBM Inc
Galoc Production Company No. 2 Pte Ltd
Summerhill Capital Resources Limited
KUFPEC America Inc.
KUFPEC Indonesia (Pangkah Bermuda) Ltd
At 31 December 2013
46
–
–
–
Norway
Indonesia
Philippines
Indonesia
Indonesia
Indonesia
Indonesia
–
Philippines
Philippines
USA
–
Syria
_
Congo
Vietnam
Vietnam
Vietnam
–
United Kingdom
United Kingdom
Pakistan
Pakistan
Country of Operation
Kuwait Foreign Petroleum Exploration Company K.S.C. (Closed) and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES
TO THE
At
31 December
2013 CONSOLIDATED FINANCIAL STATEMENTS
Dormant
Dormant
Oil & Gas Exploration / Development / Production
Oil & Gas Exploration / Development / Production
Oil & Gas Exploration / Development / Production
Oil & Gas Exploration / Development / Production
Dormant
Oil & Gas Exploration / Development / Production
Oil & Gas Exploration / Development / Production
Holding company
Area office, Oil & Gas Exploration / Development /
Production
Dormant
Holding company
Dormant
Oil & Gas Exploration / Development / Production
Holding company
Holding company
Holding company
Holding company
Oil & Gas Exploration / Development / Production
Oil & Gas Exploration / Development / Production
Holding Company
Oil & Gas Exploration / Development / Production
Dormant
Business development
Dormant
Type of Activity
Kuwait Foreign Petroleum Exploration Company K.S.C. (Closed) And Subsidiaries
Kuwait Foreign Petroleum Exploration Company K.S.C. (Closed) and Subsidiaries
Kuwait
Kuwait
Foreign
Foreign
Petroleum
Petroleum
Exploration
Exploration
Company
Company
K.S.C.
K.S.C.
(Closed)
(Closed)
and and
Subsidiaries
Subsidiaries
NOTES
TO
THE
CONSOLIDATED
FINANCIAL
STATEMENTS
Kuwait
Kuwait
Foreign
Foreign
Petroleum
Petroleum
Exploration
Exploration
Company
Company
K.S.C.
K.S.C.
(Closed)
(Closed)
and and
Subsidiaries
Subsidiaries
NOTES
NOTES
TO THE
TO THE
CONSOLIDATED
CONSOLIDATED
FINANCIAL
FINANCIAL
STATEMENTS
STATEMENTS
At
31 TO
December
2013
NOTES
NOTES
THE
TO
THE
CONSOLIDATED
CONSOLIDATED
FINANCIAL
FINANCIAL
STATEMENTS
STATEMENTS
NOTES
TO
THE
CONSOLIDATED
FINANCIAL
STATEMENTS
At
31At
December
31 December
2013
2013
At 31At
December
31
December
20132013
2013
At
31 December
29
INTERESTS IN JOINT OPERATIONS
29 29 INTERESTS
INTERESTS
IN JOINT
IN JOINT
OPERATIONS
OPERATIONS
29 Operator
29 INTERESTS
INTERESTS
IN JOINT
IN
JOINT
OPERATIONS
OPERATIONS
Country
Block
Interest
Remarks
Operator
Operator
Country
Country BlockBlock
Interest
InterestRemarks
Remarks
Operator
Operator
Country
Country BlockBlock
Interest
InterestRemarks
Remarks
Apache
Australia
Harriet
19.2771%
Apache
Apache
Australia
Australia Harriet
Harriet
19.2771%
19.2771%
Santos
Australia
WA-26-L
(Mutineer) & WA-27-L 19.2771%
37.50%
Apache
Apache
Australia
Australia
Harriet
Harriet
19.2771%
SantosSantos
Australia
Australia WA-26-L
WA-26-L
(Mutineer)
(Mutineer)
& WA-27-L
& WA-27-L
37.50%
37.50%
(Exeter)
SantosSantos
Australia
Australia WA-26-L
WA-26-L
(Mutineer)
(Mutineer)
& WA-27-L
& WA-27-L
37.50%
37.50%
(Exeter)
(Exeter)
Santos
Australia (Exeter)
Fletcher
50.0031%
(Exeter)
SantosSantos
Australia
Australia Fletcher
Fletcher
50.0031%
50.0031%
Santos
Australia
Funicane
37.5023%
Santos
Australia
Australia
Fletcher
50.0031%
50.0031%
SantosSantos
Santos
Australia
Australia Fletcher
Funicane
Funicane
37.5023%
37.5023%
Santos
Australia
WA-I91-P
37.50%
Santos
Santos
Australia
Australia
Funicane
Funicane
37.5023%
37.5023%
SantosSantos
Australia
Australia WA-I91-P
WA-I91-P
37.50%
37.50%
Santos
Australia
WA-41-R
33.33%
Santos
Australia
Australia
WA-I91-P
37.50%
37.50%
SantosSantos
Santos
Australia
Australia WA-I91-P
WA-41-R
WA-41-R
33.33%
33.33%
Apache
Australia
WA-45-R
& WA-46-R
20.00%
Santos
Santos
Australia
Australia
WA-41-R
WA-41-R
33.33%
33.33%
Apache
Apache
Australia
Australia WA-45-R
WA-45-R
& WA-46-R
& WA-46-R
20.00%
20.00%
Apache
Apache
Australia
Australia WA-45-R
WA-45-R
& WA-46-R
& WA-46-R
20.00%
20.00%
Apache
Australia
WA-356-P
35.00%
Apache
Apache
Australia
Australia WA-356-P
WA-356-P
35.00%
35.00%
Murphy
Australia
WA-481-P
30.00%
Apache
Apache
Australia
Australia
WA-356-P
35.00%
35.00%
Murphy
Murphy
Australia
Australia WA-356-P
WA-481-P
WA-481-P
30.00%
30.00%
Santos
Australia
WA-8-L
42.63%
Murphy
Murphy
Australia
Australia
WA-481-P
WA-481-P
30.00%
30.00%
SantosSantos
Australia
Australia WA-8-L
WA-8-L
42.63%
42.63%
IEOC
Egypt
North
Bardawil
36.00%
Paying Interest 40%
Santos
Santos
Australia
Australia
WA-8-L
WA-8-L
42.63%
42.63%Paying
IEOCIEOC
EgyptEgypt
NorthNorth
Bardawil
Bardawil
36.00%
36.00%
Paying
Interest
Interest
40% 40%
Apache
Egypt
Ras
Kanayes
36.36%
IEOC
IEOC
Egypt
Egypt
North
North
Bardawil
Bardawil
36.00%
36.00%
Paying
Paying
Interest
Interest
40% 40%
Apache
Apache
EgyptEgypt
Ras Kanayes
Ras Kanayes
36.36%
36.36%
Hess
Malaysia
SB
302
7T-11 Belud
40.00%
Apache
Apache
Egypt
Egypt
Ras
Kanayes
Ras
Kanayes
36.36%
36.36%
Hess Hess
Malaysia
Malaysia SB 302
SB7T-11
302 7T-11
BeludBelud
40.00%
40.00%
Petronas
Carigali Malaysia
Malaysia
South
SB7T-11
312 Belud
40.00%
Paying Interest 60%
Hess
Hess
Malaysia
SB
302
SB
7T-11
302
Belud
40.00%
40.00%
Petronas
Petronas
Carigali
Carigali Malaysia
Malaysia SouthSouth
SB 312
SB 312
40.00%
40.00%PayingPaying
Interest
Interest
60% 60%
Mitra
Energy
Vietnam
Block
51
35.00%
Petronas
Carigali
Carigali Malaysia
Malaysia
SB
SB
40.00%
40.00%
Interest
Interest
60% 60%
Mitra Petronas
Mitra
Energy
Energy
Vietnam
Vietnam South
BlockSouth
Block
51 312
51 312
35.00%
35.00%PayingPaying
Hunt
Yemen
Block
551
(Jannah)
20.00%
Mitra
Mitra
Energy
Energy
Vietnam
Vietnam
Block
Block
51
35.00%
35.00%
Hunt Hunt
Yemen
Yemen
BlockBlock
5 (Jannah)
5 (Jannah)
20.00%
20.00%
Enquest
UK
Cairngorm
25.00%
Hunt
Hunt
Yemen
Block
Block
5 (Jannah)
5 (Jannah)
20.00%
20.00%
Enquest
Enquest
UK Yemen
UK
Cairngorm
Cairngorm
25.00%
25.00%
Enquest
UK
Alma
– Galia
35.00%
Enquest
Enquest
UK
UK
Cairngorm
Cairngorm
25.00%
25.00%
Enquest
Enquest
UK UK
Alma Alma
– Galia
– Galia
35.00%
35.00%
KUFPEC
Pakistan
Jati
75.00%
Enquest
Enquest
UK
UK
– Galia
– Galia
35.00%
35.00%
KUFPEC
KUFPEC
Pakistan
Pakistan Alma
Jati Alma
Jati
75.00%
75.00%
Talisman
Norway
Gyda
5.00%
KUFPEC
KUFPEC
Pakistan
Pakistan
Jati
Jati
75.00%
75.00%
Talisman
Talisman
Norway
Norway Gyda Gyda
5.00%
5.00%
Talisman
Norway
PL
019D
5.00%
Talisman
Talisman
Norway
Norway
Gyda
Gyda
5.00%
Talisman
Talisman
Norway
Norway PL 019D
PL 019D
5.00%5.00%
5.00%
Talisman
Norway
Tambar
0.80%
Talisman
Talisman
Norway
Norway
PL
019D
PL
019D
5.00%
5.00%
Talisman
Talisman
Norway
Norway Tambar
Tambar
0.80%
0.80%
Talisman
Norway
YME
10.00%
Talisman
Talisman
Norway
Norway
0.80%
0.80%
Talisman
Talisman
Norway
Norway Tambar
YME Tambar
YME
10.00%
10.00%
Premier
Norway
PL
406
30.00%
Talisman
Talisman
Norway
Norway
YME
YME
10.00%
10.00%
Premier
Premier
Norway
Norway PL 406
PL 406
30.00%
30.00%
Premier
Norway
PL
407
30.00%
Premier
Premier
Norway
Norway
PL
406
PL
406
30.00%
30.00%
Premier
Premier
Norway
Norway PL 407
PL 407
30.00%
30.00%
Otto
Energy
Philippines
Galoc
26.84%
Premier
Premier
Norway
Norway
PL
407
PL
407
30.00%
30.00%
Otto Energy
Otto Energy
Philippines
Philippines GalocGaloc
26.84%
26.84%
CNOCC
Indonesia
SES
5.00%
Otto
Energy
Otto
Energy
Philippines
Philippines
Galoc
Galoc
26.84%
26.84%
CNOCC
CNOCC
Indonesia
Indonesia SES SES
5.00%
5.00%
Pertamina
Indonesia
ONWJ
5.00%
CNOCC
CNOCC
Indonesia
Indonesia
5.00%5.00%
5.00%
Pertamina
Pertamina
Indonesia
Indonesia SES
ONWJSES
ONWJ
5.00%
Pertamina
Pertamina
Indonesia
Indonesia ONWJONWJ
5.00%5.00%
The Group’s interest in contractual arrangements were previously classified as jointly controlled assets. The
The
Group’s
The
Group’s
interest
interest
in
contractual
in
contractual
arrangements
arrangements
were
previously
were
previously
classified
classified
as
jointly
as
jointly
controlled
controlled
assets.
assets.
The the
The
Kuwait
Kuwait
Kuwait
Foreign
Foreign
Foreign
Petroleum
Petroleum
Petroleum
Exploration
Exploration
Exploration
Company
Company
Company
K.S.C.
K.S.C.
K.S.C.
(Closed)
(Closed)
(Closed)
and
and
Subsidiaries
Subsidiaries
Subsidiaries
disclosures
in the
financial
statements
have
been classified
restated
onas
adoption
ofand
IFRS
11
to
present
The
Group’s
The
Group’s
interest
interest
inconsolidated
contractual
in contractual
arrangements
arrangements
were
previously
were
previously
classified
jointly
as
jointly
controlled
controlled
assets.
assets.
The
The
disclosures
disclosures
in
the
in
consolidated
the
consolidated
financial
financial
statements
statements
have
been
have
restated
been
restated
on
adoption
on
adoption
of
IFRS
of
IFRS
11
to
11
present
to
present
the
the
Group’s
interest
inCONSOLIDATED
contractual
arrangements.
The
restatement
did
not
have
any
material
effect
ontothe
Group’s
NOTES
NOTES
NOTES
TO
TO
TO
THE
THE
THE
CONSOLIDATED
CONSOLIDATED
FINANCIAL
FINANCIAL
FINANCIAL
STATEMENTS
STATEMENTS
STATEMENTS
disclosures
disclosures
in
the
in
consolidated
the
consolidated
financial
financial
statements
statements
have
been
have
restated
been
restated
on
adoption
on
adoption
of
IFRS
of
IFRS
11
to
11
present
present
the
the
Group’s
Group’s
interest
interest
in
contractual
in
contractual
arrangements.
arrangements.
The
restatement
The
restatement
did
not
did
have
not
any
have
material
any
material
effect
effect
on
the
on
Group’s
the
Group’s
financial
position
or contractual
performance,
and affected
disclosures
in not
the
consolidated
financial
statements.
Refer
note
At
At
31
At
31
December
31
December
December
2013
2013
2013
Group’s
Group’s
interest
interest
in
contractual
in
arrangements.
arrangements.
The
restatement
The
restatement
did
did
have
not
any
have
material
any
material
effect
effect
on
the
on
Group’s
the
Group’s
financial
financial
position
position
or performance,
performance,
and affected
and
affected
disclosures
disclosures
in theinconsolidated
the consolidated
financial
financial
statements.
statements.
Refer Refer
note note
30
for
disclosure
ofor
Group’s
interest
in contractual
arrangements.
financial
position
position
performance,
performance,
and
affected
and
affected
disclosures
disclosures
in theinconsolidated
the consolidated
financial
financial
statements.
statements.
Refer Refer
note note
30 forfinancial
30
disclosure
for
disclosure
oforGroup’s
oforGroup’s
interest
interest
in contractual
in contractual
arrangements.
arrangements.
30 for30
disclosure
for disclosure
of Group’s
of Group’s
interest
interest
in contractual
in contractual
arrangements.
arrangements.
303030 INTERESTS
INTERESTS
INTERESTS
ININ
CONTRACTUAL
IN
CONTRACTUAL
CONTRACTUAL
ARRANGEMENTS
ARRANGEMENTS
ARRANGEMENTS
Operator
Operator
Operator
Country
Country
Country
Block
Block
Block
Apache
Apache
Apache
Australia
Australia
Australia
Apache
Apache
Apache
KUFPEC
KUFPEC
KUFPEC
Chevron
Chevron
Chevron
CNOOC
CNOOC
CNOOC
PICO
PICO
PICO
Premier
Premier
Premier
CITIC
CITIC
CITIC
Petrofac
Petrofac
Petrofac
Tullow
Tullow
Tullow
Petronas
Petronas
Petronas
Tullow
Tullow
Tullow
Tullow
Tullow
Tullow
ENI
ENI
ENI
ENI
ENI
ENI
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
China
China
China
Egypt
Egypt
Egypt
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Malaysia
Malaysia
Malaysia
Mauritania
Mauritania
Mauritania
Mauritania
Mauritania
Mauritania
Mauritania
Mauritania
Mauritania
Mauritania
Mauritania
Mauritania
Pakistan
Pakistan
Pakistan
Pakistan
Pakistan
Pakistan
WA-49-L-Julimar,
WA-49-L-Julimar,
WA-49-L-Julimar,
Brunello
Brunello
Brunello
& &&
Balnaves
Balnaves
Balnaves
WA-335-P
WA-335-P
WA-335-P
WA-427-P
WA-427-P
WA-427-P
Wheatstone
Wheatstone
Wheatstone
– LNG
– LNG
– LNG
Yacheng
Yacheng
Yacheng
13-1
13-1
13-1
Geisum
Geisum
Geisum
Natuna
Natuna
Natuna
SeaSea
Block
Sea
Block
Block
1 1 1
Seram
Seram
Seram
(Non-Bula)
(Non-Bula)
(Non-Bula)
PMPM
304
PM
304
(Cendor)
304
(Cendor)
(Cendor)
47
PSC
PSC
PSC
C-10
C-10
C-10
47 47
Chinguetti
Chinguetti
Chinguetti
47 47
Avenant
Avenant
Avenant
– A– –A
– Banda
A
– Banda
– Banda
Avenant
Avenant
Avenant
– B– –B
–Tiof/Tevet
–B Tiof/Tevet
– Tiof/Tevet
Kirthar
Kirthar
Kirthar
(Badhra
(Badhra
(Badhra
Area
Area
Area
A)A)A)
Kirthar
Kirthar
Kirthar
(Badhra
(Badhra
(Badhra
Area
Area
Area
B)B)B)
Interest
Interest
Interest Remarks
Remarks
Remarks
35.00%
35.00%
35.00%
18.90%
18.90%
18.90%
100.00%
100.00%
100.00%
7.00%
7.00%
7.00%
14.70%
14.70%
14.70%
40.00%
40.00%
40.00%
33.333%
33.333%
33.333%
30.00%
30.00%
30.00%
25.00%
25.00%
25.00%
11.12%
11.12%
11.12% Paying
Paying
Paying
Interest
Interest
Interest
12.36%
12.36%
12.36%
10.234%
10.234%
10.234%
11.322%
11.322%
11.322% Paying
Paying
Paying
Interest
Interest
Interest
12.866%
12.866%
12.866%
10.234%
10.234%
10.234% Paying
Paying
Paying
Interest
Interest
Interest
11.63%
11.63%
11.63%
34.00%
34.00%
34.00% Paying
Paying
Paying
Interest
Interest
Interest
42.5%
42.5%
42.5% 70
34.00%
34.00%
34.00%
Egypt
Geisum
40.00%
PICO
Egypt
Geisum
40.00%
PICOPICO
PICO
Egypt
Egypt
Geisum
Geisum
40.00%
40.00%
PICO
Egypt
Geisum
40.00%
Premier
Indonesia
Natuna
Sea
Block
1
33.333%
Premier
Indonesia
Natuna
Sea
Block
33.333%
Premier
Premier
Indonesia
Indonesia
Natuna
Natuna
Sea Block
SeaBlock
Block
1 111
33.333%
33.333%
Premier
Indonesia
Natuna
Sea
33.333%
Kuwait Foreign Petroleum
Exploration
Company K.S.C. (Closed)
and Subsidiaries
CITIC
Indonesia
Seram
(Non-Bula)
30.00%
CITIC
Indonesia
Seram
(Non-Bula)
30.00%
CITIC
CITIC
Indonesia
IndonesiaKuwaitSeram
Seram
(Non-Bula)
(Non-Bula)
30.00%
30.00%
CITIC
Indonesia
Seram
(Non-Bula)
30.00%
Foreign
Petroleum
Exploration Company K.S.C.
(Closed) And Subsidiaries
NOTES
TO
THE
CONSOLIDATED
FINANCIAL
STATEMENTS
Petrofac
Malaysia
PM
304
25.00%
Petrofac
Malaysia
PM
304
(Cendor)
25.00%
Petrofac
Petrofac
Malaysia
Malaysia
PM 304
PM(Cendor)
304(Cendor)
(Cendor)
25.00%
25.00%
Petrofac
PM
304
(Cendor)
25.00%
At 31 December 2013 Malaysia
Tullow
Mauritania
PSC
C-10
11.12%
Paying
Interest
12.36%
Tullow
Mauritania
PSC
C-10
11.12%
Paying
Interest
12.36%
Tullow
Tullow
Mauritania
Mauritania PSC PSC
C-10
PSCC-10
C-10
11.12%
11.12% Paying
Paying
Interest
Interest
12.36%
12.36%
Tullow
Mauritania
11.12%
Paying
Interest
12.36%
Petronas
Mauritania
Chinguetti
10.234%
Petronas
Mauritania
Chinguetti
10.234%
Petronas
Petronas
Mauritania
Mauritania Chinguetti
Chinguetti
10.234%
10.234%
Petronas
Mauritania
Chinguetti
10.234%
30
INTERESTS INMauritania
CONTRACTUAL
ARRANGEMENTS
Tullow
Avenant
A
Banda
11.322%
Paying
Interest
12.866%
Tullow
Mauritania
Avenant
A
Banda
11.322%
Paying
Interest
12.866%
Tullow
Tullow
Mauritania
Mauritania Avenant
Avenant
– A ––
A–
Banda
11.322%
11.322% Paying
Paying
Interest
Interest
12.866%
12.866%
Tullow
Mauritania
Avenant
–––Banda
A
–––Banda
11.322%
Paying
Interest
12.866%
Tullow
Mauritania
Avenant
–
B
–
Tiof/Tevet
10.234%
Paying
Interest
11.63%
Tullow
Mauritania
Avenant
BB–––Tiof/Tevet
Tiof/Tevet
10.234%
Paying
Interest
11.63%
Operator
Country
Block
Interest
Remarks
Tullow
Tullow
Mauritania
Mauritania
Avenant
Avenant
– B ––––Tiof/Tevet
Tiof/Tevet
10.234%
10.234% Paying
Paying
Interest
Interest
11.63%
11.63%
Tullow
Mauritania
Avenant
B
10.234%
Paying
Interest
11.63%
ENI
Pakistan
Kirthar
(Badhra
Area
A)
34.00%
Paying
Interest
42.5%
ENI
Pakistan
Kirthar
(Badhra
Area
A)
34.00%
Paying
Interest
42.5%
ENI ENI
ENI
Pakistan
Pakistan
Kirthar
Kirthar
(Badhra
(Badhra
AreaArea
Area
A) A)
A)
34.00%
34.00% Paying
Paying
Interest
Interest
42.5%
42.5%
Pakistan
Kirthar
(Badhra
34.00%
Paying
Interest
42.5%
Pakistan
Kirthar
(Badhra
B)
34.00%
Apache
Australia
WA-49-L-Julimar,
& 34.00%
35.00%
ENI
Pakistan
Kirthar
(Badhra
Area
B)
34.00%
ENI ENI
ENI
Pakistan
Pakistan
Kirthar
Kirthar
(Badhra
(Badhra
AreaArea
Area
B) Brunello
B)
34.00%
ENI
Pakistan
Kirthar
(Badhra
Area
B)
34.00%
Pakistan
Kirthar
(Bhit)
34.00%
Balnaves
ENI
Pakistan
Kirthar
(Bhit)
34.00%
ENI ENI
ENI
Pakistan
Pakistan
Kirthar
Kirthar
(Bhit)
(Bhit)
34.00%
34.00%
ENI
Pakistan
Kirthar
(Bhit)
34.00%
ENI
Pakistan
Taj
jal
(Kadanwari)
15.789%
Apache
Australia
WA-335-P
18.90%
ENI
Pakistan
Taj
jal
(Kadanwari)
15.789%
ENI ENI
ENI
Pakistan
Pakistan
Taj jal
Taj
(Kadanwari)
jal(Kadanwari)
(Kadanwari)
15.789%
15.789%
Pakistan
Taj
jal
15.789%
OGDCL
Pakistan
Qadirpur
13.25%
KUFPEC
Australia
WA-427-P
100.00%
OGDCL
Pakistan
Qadirpur
13.25%
OGDCL
OGDCL
Pakistan
Pakistan
Qadirpur
Qadirpur
13.25%
13.25%
OGDCL
Pakistan
Qadirpur
13.25%
BHP
Petroleum
Pakistan
Dadu
(Zamzama)
9.375%
Chevron
Australia
Wheatstone
–
LNG
7.00%
BHP
Petroleum
Pakistan
Dadu
(Zamzama)
9.375%
BHPBHP
BHP
Petroleum
Petroleum
Pakistan
Pakistan
DaduDadu
Dadu
(Zamzama)
(Zamzama)
9.375%
9.375%
Petroleum
Pakistan
(Zamzama)
9.375%
Mari
Petroleum
Gas
Pakistan
Bolan
(Zarghun
South)
3.75%
CNOOC
China
Yacheng
13-1
14.70%
Mari
Petroleum
Gas
Pakistan
Bolan
(Zarghun
South)
3.75%
MariMari
Mari
Petroleum
Petroleum
Gas Gas
Gas Pakistan
Pakistan
Bolan
Bolan
(Zarghun
(Zarghun
South)
South)
3.75%
3.75%
Petroleum
Pakistan
Bolan
(Zarghun
South)
3.75%
ENI
Pakistan
Sukhpur
25.00%
PICO
Egypt
Geisum
40.00%
ENI
Pakistan
Sukhpur
25.00%
ENI ENI
ENI
Pakistan
Pakistan
Sukhpur
Sukhpur
25.00%
25.00%
Pakistan
Sukhpur
25.00%
CTKCPT
Tunisia
El
22.50%
Premier
Indonesia
Natuna
Sea Block 1
33.333%
CTKCPT
Tunisia
Sidi
El
Kilani
22.50%
CTKCPT
CTKCPT
Tunisia
Tunisia
Sidi Sidi
El
Sidi
Kilani
ElKilani
Kilani
22.50%
22.50%
CTKCPT
Tunisia
Sidi
El
Kilani
22.50%
Oil
Search
Yemen
Block
20.25%
Paying
Interest
23.82%
CITIC
Indonesia
Seram
30.00%Paying
Oil
Search
Yemen
Block
20.25%
Paying
Interest
23.82%
Oil Search
Oil
Search
Yemen
Yemen
Block
Block
7 7
20.25%
20.25%
Paying
Interest
Interest
23.82%
23.82%
Oil
Search
Yemen
Block
777(Non-Bula)
20.25%
Paying
Interest
23.82%
TOTAL
Yemen
Block
10
(East
Shabwa)
14.2857%
Petrofac
Malaysia
PM
304
25.00%
TOTAL
Yemen
Block
10
(East
Shabwa)
14.2857%
TOTAL
TOTAL
Yemen
Yemen
Block
Block
10 (East
10(Cendor)
(East
Shabwa)
Shabwa)
14.2857%
14.2857%
TOTAL
Yemen
Block
10
(East
Shabwa)
14.2857%
TOTAL
Sudan
Block
B
41.25%
Paying
Interest
45.375%
Tullow
Mauritania
PSC
11.12%Paying
Paying
Interest
12.36%
TOTAL
South
Sudan
Block
BB
41.25%
Paying
Interest
45.375%
TOTAL
TOTAL
SouthSouth
South
Sudan
Sudan Block
Block
B C-10
41.25%
41.25%
Paying
Interest
Interest
45.375%
45.375%
TOTAL
South
Sudan
Block
B
41.25%
Paying
Interest
45.375%
Petronas
Mauritania
Chinguetti
10.234%
interest
in
arrangements
previously
classified
as
controlled
assets.
The
The
Group’s
interest
in
contractual
arrangements
were
previously
classified
as
jointly
controlled
assets.
The
The The
Group’s
The Group’s
Group’s
interest
interest
in contractual
in contractual
contractual
arrangements
arrangements
werewere
were
previously
previously
classified
classified
as jointly
as jointly
jointly
controlled
controlled
assets.
assets.
TheInterest
The 12.866%
The
Group’s
interest
in
contractual
arrangements
were
previously
classified
as
jointly
controlled
assets.
The
Tullow
Mauritania
Avenant
–
A
–
Banda
11.322%
Paying
disclosures
in
the
consolidated
financial
statements
have
been
restated
on
adoption
of
IFRS
11
to
present
disclosures
in
the
consolidated
financial
statements
have
been
restated
on
adoption
of
IFRS
11
to
present
the
disclosures
disclosures
in the
inconsolidated
the consolidated
consolidated
financial
financial
statements
statements
havehave
have
beenbeen
been
restated
restated
on adoption
on adoption
adoption
of IFRS
of IFRS
IFRS
11 to11
11
present
to present
present
the the
the
disclosures
in
the
financial
statements
restated
on
of
to
the
Tullow interest
Mauritania
Avenant
– B – Tiof/Tevet
10.234%
Paying
Interest 11.63%
Group’s
in
arrangements.
did
not
any
on
the
Group’s
interest
in
contractual
arrangements.
The
restatement
did
not
have
any
material
effect
on
the
Group’s
Group’s
Group’s
interest
interest
in contractual
in contractual
contractual
arrangements.
arrangements.
The The
restatement
Therestatement
restatement
did not
didhave
not have
have
any material
anymaterial
material
effecteffect
effect
on the
onGroup’s
the Group’s
Group’s
Group’s
interest
in
contractual
arrangements.
The
restatement
did
not
have
any
material
effect
on
the
Group’s
financial
position
or
and
disclosures
the
consolidated
financial
statements.
ENI
Pakistan
Kirthar
(Badhra
Area
A) financial
34.00%
financial
position
or
performance,
and
affected
disclosures
in
the
consolidated
financial
statements.
financial
financial
position
position
or performance,
orperformance,
performance,
and affected
andaffected
affected
disclosures
disclosures
in
thein
inconsolidated
the
consolidated
financial
statements.
statements. Paying Interest 42.5%
financial
position
or
performance,
and
affected
disclosures
in
the
consolidated
financial
statements.
Kuwait
Foreign
Petroleum
Exploration
Company
K.S.C.
(Closed)
and Subsidiaries
ENI
Pakistan
Kirthar (Badhra Area B)
34.00%
31
CAPITAL
COMMITMENTS
Kuwait
Foreign
Petroleum
Exploration
Company
K.S.C.
(Closed)
and Subsidiaries
31
CAPITAL
COMMITMENTS
INFORMATION
31 SUPPLEMENTARY
31CAPITAL
CAPITAL
COMMITMENTS
COMMITMENTS
31
CAPITAL
COMMITMENTS
ENI
Pakistan
Kirthar (Bhit)
34.00%
SUPPLEMENTARY
INFORMATION
At
31 December 2013
ENI
Pakistan
Taj jal (Kadanwari)
15.789% at 31 December
various
ventures
for
exploration
and
expenditure
Commitments
under
various
joint
ventures
for
future
exploration
and
development
expenditure
at
31
December
Commitments
Commitments
underunder
under
various
various
jointjoint
joint
ventures
ventures
for future
forfuture
future
exploration
exploration
and development
anddevelopment
development
expenditure
expenditure
at 31at
at
December
31December
December
AtCommitments
31 December
2013
Commitments
under
various
joint
ventures
for
future
exploration
and
development
expenditure
31
OGDCL
Pakistan
Qadirpur
13.25%
amounted
to
KD
million
(2012:
KD
million).
2013
amounted
to
approximately
KD
696.2
million
(2012:
KD
587.3
million).
20132013
2013
amounted
amounted
to approximately
toapproximately
approximately
KD 696.2
KD696.2
696.2
million
million
(2012:
(2012:
KD 587.3
KD587.3
587.3
million).
million).
2013
amounted
to
approximately
KD
696.2
million
(2012:
KD
587.3
million).
OIL
GAS RESERVES
(UNAUDITED)Dadu (Zamzama)
BHP AND
Petroleum
Pakistan
9.375%
OIL
AND
GAS
RESERVES
(UNAUDITED)
Mari Petroleum Gas
Pakistan
Bolan (Zarghun South)
3.75%
Crude Oil
Gas
Gas
Total
ENI
Pakistan
Sukhpur
25.00%
Crude
Oil
Gas
Gas
Total
(mmbbls)
(bcf)
(mmboe)
(mmboe)
CTKCPT
Tunisia
Sidi El Kilani
22.50%
(mmbbls)
(bcf)
(mmboe)
(mmboe)
Proved and probable reserves at beginning
Oilyear
Search
Yemen
Block 7
20.25%
Paying Interest 23.82%
of
Proved
and probable reserves at beginning
TOTAL
Yemen
Block 10 46.24
(East Shabwa) 762.39
14.2857%
of
year in production
Fields
132.49
178.73
TOTAL
South
Sudan
Block
B
41.25%
Paying
Interest 45.375%
Fields inunder
production
46.24
762.39
132.49
178.73
Projects
development
20.75
838.22
144.52
165.27
71
Projects under development
20.75
838.22
144.52
165.27
1600.61
277.01
344.00
The Group’s interest in contractual arrangements were66.99
previously classified
as jointly
controlled assets.
The
66.99
1600.61
344.00
Changes
during
theconsolidated
year
disclosures
in the
financial statements have
been restated
on adoption of277.01
IFRS 11 to present
the
Changes
during
the
year
Group’s
interest
in
contractual
arrangements.
The
restatement
did
not
have
any
material
effect
on
the
Group’s
Discoveries
financial
position
or performance,
in the consolidated
Discoveries
Revision
of previous
estimates and affected disclosures
5.15
29.20 financial statements.
5.06
10.21
Revision
of
previous
estimates
5.15
29.20
5.06
10.21
Purchase reserves in place
17.80
19.02
3.28
21.08
31
CAPITAL COMMITMENTS
Purchase
of reserves
in place
17.80
19.02
3.28
21.08
Sale
of reserves
in place
(5.67)
(41.55)
(6.93)
(12.60)
Sale
of
reserves
in
place
(5.67)
(41.55)
(6.93)
(12.60)
Production
(7.88)
(114.58)
(19.38)
(27.26)
Commitments under various joint ventures for future 48
exploration and development expenditure at 31 December
48
48 (2012:
48
48
Production
(7.88)
(19.38)
(27.26)
2013
amounted to approximately KD 696.2 million
KD 587.3 (114.58)
million).
9.40
(107.91)
(17.97)
(8.57)
9.40
(107.91)
(17.97)
(8.57)
Proved and probable reserves at end of year
Proved
probable reserves at end of year
Fields and
in Production
46.10
660.87
115.62
161.72
Fields
in
Production
46.10
660.87
115.62
161.72
Projects under development
30.30
831.84
143.42
173.72
Projects under development
30.30
831.84
143.42
173.72
76.40
1,492.71
259.04
335.44
76.40
1,492.71
259.04
335.44
Proven reserves are the quantities of crude oil and natural gas which geological and engineering data
demonstrate
with are
reasonable
certaintyofto crude
be recoverable
in futuregas
years
fromgeological
known reservoirs
under existing
Proven reserves
the quantities
oil and natural
which
and engineering
data
economic
andwith
operating
conditions.
demonstrate
reasonable
certainty to be recoverable in future years from known reservoirs under existing
economic and operating conditions.
Probable reserves are those additional reserves which are not yet proven but together with proven reserves are
estimated
to have aare
50%
or better
chance
of being
technically
producible.
Probable reserves
those
additional
reserves
which
are notand
yet economically
proven but together
with proven reserves are
estimated to have a 50% or better chance of being technically and economically producible.
Oil reserves include the oil equivalent of natural gas. Oil and gas reserves cannot be measured exactly since
estimation
reservestheinvolves
subjective
judgment
all exactly
estimates
are
Oil reservesofinclude
oil equivalent
of natural
gas.and
Oilarbitrary
and gas determinations.
reserves cannotTherefore,
be measured
since
subject
to periodic
revision.
Reserves,
reserves
volumes
reserves
related information
andalldisclosures
estimation
of reserves
involves
subjective
judgment
and and
arbitrary
determinations.
Therefore,
estimates are
referredtoto periodic
as "unaudited"
as Reserves,
a means ofreserves
clarifying
that 48
this
is not information
covered by the
opinionare
of
subject
revision.
volumes
andinformation
reserves related
andaudit
disclosures
the
independent
auditor thatashas
auditedofand
reportedthat
on the
statements
of audit
the Group.
referred
to as "unaudited"
a means
clarifying
thisconsolidated
information financial
is not covered
by the
opinion of
the independent auditor that has audited and reported on the consolidated financial statements of the Group.
‫الـ�شـركـة‬
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HEAD OFFICE
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AREA OFFICES
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Tel: 61 8 9380 3900
Fax: 61 8 9380 3999
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INDONESIA
KUFPEC Regional Ventures (Indonesia) Limited
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Jl. Jend. Sudirman No. 28, Jakarta 10210, Indonesia
Tel.: (62-21) 5785 2784 (Hunting)
Fax: (62-61) 5785 2785
TUNISIA
KUFPEC Tunisia Ltd.
B.P. 158, Les Berges du Lac - Immeuble Sara,
3eme Etage, Boulevard Principal
1053 Les Berges du Lac - Tunis
Tel.: 00216 71 965345
Fax: 0021671 861441
PAKISTAN
KUFPEC Pakistan Holdings B.V.
House No. 2, Street No.71, Sector F-8/3,
Islamabad, Pakistan
P.O. Box 2438, Islamabad, Pakistan
Tel.: +92 51 225 1530
Fax: +92 51 2251 104
EGYPT
KUFPEC Egypt Limited (KEL)
44 Palestine Street, 10th Floor, New Maadi,
Cairo - 11435, Egypt, ARE
Tel.: 00202 27036272 - 27036275
Fax: 00202 27036289
Email: ssaafan@kufpec.com
Norway
KUFPEC Norway AS
Post Box 207
Kongsgaardbakken 1
4001 Stavanger
Norway
Phone: +47 51 21 22 20
E-mail: post.norway@kufpec.com
If you require further copies of this report, in both Arabic or English,
please provide a written request to Public Relations at our Head Office, or
through any of our offices. e-mail: publications@kufpec.com