Overview of Accounting in the Nigerian Petroleum (Upstream) Industry

Journal of Global Accounting, Vol. 1, No. 2, 2005

24 Pages Posted: 11 Apr 2011

See all articles by Emmanuel Ikechukwu Okoye

Emmanuel Ikechukwu Okoye

Nnamdi Azikiwe University - Department of Accountancy

Date Written: April 6, 2011

Abstract

Oil revenue has been and is still the main stay of the Nigerian economy and is likely to remain so tor sometime to come. Total annual revenue from Oil runs into several billions and the importance of ensuring that an effective machinery exist for the collection of this massive wealth cannot therefore be overemphasized. We are going to look at the history of exploration and production or upstream activities in Nigeria in order to better appreciate the accounting aspects. The nature of the cost incurred and revenues earned from exploring for and revenues earned from exploring for and producing petroleum products will be examined. Issues involved in developing accounting policies in the upstream oil and gas industry will be considered. The place of accounting standard in the industry in order to ensure comparability of financial statements. The Impact of full cost and successful effort method on financial statements and their useability will be highlighted. The upstream petroleum industry is capital intensive necessitating the type of financing arrangement obtainable in the industry. As past of the effort to reduce the risks inherent in oil and gas exploration, companies typically engage in arrangements such as joint ventures, production sharing agreements and others. In this paper, an update in the financing arrangements will be discussed. Oil and gas are two most important natural resources in Nigeria. Taxation is one tool; government can use to maximize the benefit of these resources to the nation. The issues and problems of assessment of tax in the industry will be presented.

Keywords: Accounting,Petroleum (Upstream)

Suggested Citation

Okoye, Emmanuel Ikechukwu, Overview of Accounting in the Nigerian Petroleum (Upstream) Industry (April 6, 2011). Journal of Global Accounting, Vol. 1, No. 2, 2005, Available at SSRN: https://ssrn.com/abstract=1804225

Emmanuel Ikechukwu Okoye (Contact Author)

Nnamdi Azikiwe University - Department of Accountancy ( email )

Awka, Anambra 23400
Nigeria

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