Norway Joint Venture Audit Guidelines

032 - NORWEGIAN OIL AND GAS
RECOMMENDED GUIDELINES
NORWAY JOINT VENTURE AUDIT
Guidelines established by Norwegian Oil and Gas Associations

Referansegruppe konomi to govern audits
of Joint Ventures / Joint Interest
on the Norwegian Continental Shelf
Norwegian Oil and Gas Association recommended guidelines for Norway Joint Venture Audit
No.: 032.
Established:
01.01.92
Revision no: 7
Date revised: 01.06.10
Page: 2
CONTENT
CONTENT ............................................................................................................................................................. 2
1
INTRODUCTION...................................................................................................................................... 4
JOINT VENTURE AUDIT PROVISIONS.............................................................................................. 4

1.4.1 General Provisions .................................................................................................................................... 4
1.4.1.1 Audit Report and prior follow-up meeting .............................................................................................. 5
1.4.1.2 Treatment of unresolved audit claims ..................................................................................................... 5
3.
AUDIT PLANNING AND PREPARATION FOR AN AUDIT .............................................................. 6

Summary Time Table of Audit Provision ............................................................................................................ 6
3.1.
The Annual Joint Venture Audit Plan ..................................................................................................... 6
3.2
Preparation for an Audit ........................................................................................................................ 7
3.2.1
The Lead Auditor ............................................................................................................................ 7
3.2.2
Overheads / MultiVenture Audits ................................................................................................... 7
3.2.3
Notification to Partners for License Audits ..................................................................................... 8
3.2.4
Notification of Audit to Operator .................................................................................................... 8
3.2.5
Audit Information ........................................................................................................................... 9
3.3.
4.
Audit Coordinator and Audit Contact Person(s) .................................................................................... 9

CONDUCT OF THE AUDIT ................................................................................................................. 11
4.1.
Audit Preparation ................................................................................................................................. 11
4.2.
Opening Meeting .................................................................................................................................. 11
4.3.
Audit Process - Roles and Responsibilities ........................................................................................... 11
4.4.
Voucher Requests (VR) ......................................................................................................................... 12
4.5.
Information Requests (IR) ..................................................................................................................... 12
4.6.
Audit Exceptions (AE) ........................................................................................................................... 12
4.7.
Audit Close-Out Meeting ...................................................................................................................... 13
4.8.
Audit Follow-Up ................................................................................................................................... 13
4.9.
Stand Still Agreement ........................................................................................................................... 13
5.
AUDIT REPORT .................................................................................................................................... 14

5.1
Operators rebuttal .............................................................................................................................. 14
5.2
Treatment of unresolved audit claims ................................................................................................... 15
6.
AUDIT COST SHARING ....................................................................................................................... 15
7.
PARTICIPATION ENTITLEMENT ...................................................................................................... 15

2
No.: 032.
8.
Established:
01.01.92
Revision no: 7
Page: 3
COMMUNICATION AND CONFIDENTIALITY ................................................................................ 16
APPENDIX A Cost Sharing ......................................................................................................................... 17

1.
Audit Cost Charge Out Rates
2009/2010 ............................................................................................ 17
2.
Application of Charge Out Rates .............................................................................................................. 17
3.
Transportation Charges............................................................................................................................ 18
4.
Basis for Audit Cost Sharing .................................................................................................................... 18
APPENDIX B Standard Format for Request and Delivery of Electronic Transaction Data v/
attachments....................................................................................................................................................... 19
APPENDIX C Suggested Audit Report Format ......................................................................................... 25
APPENDIX D Format Stand Still Agreement ............................................................................................. 26
No.: 032.
Established:
01.01.92
Revision no: 7
Page: 4
INTRODUCTION
These Norway Joint Venture Audit Guidelines provide the framework around which
Joint Venture audits in Norway should be conducted. They address the preferred
approach for the conduct of Joint Venture audits in Norway and define the planning and
conduct of audits, the communication between the audit team and the Operator, the
reporting, follow-up and close-out of audits, as well as some administrative procedures
inherent in the Joint Venture audit process. It affects both Financial (Charges /
Expenditure / Revenues (Tariff)) audits and Hydrocarbon (Measurement / Allocation)
audits. Audit scope and coverage details need to be determined by each individual audit
team, and are not covered by these Guidelines.
As of 1.6.2010, changes have been made in the following chapter: New Appendix D.
JOINT VENTURE AUDIT PROVISIONS

Joint Venture audits in Norway are conducted under the audit provisions contained in the
respective licence or unit agreements. Current audit provisions stipulate the following
rights and obligations:
(ref below, copy from Accounting Agreement, Att B, 1.4.1).
1.4.1 General Provisions

A Non-operator shall have the right to audit the accounts, ledgers, records and documents
relating to the Joint Operations, within a 24-month period following the end of each Financial
Year, unless the Parties have agreed to extend this period. The Operator shall give the
auditors access to all Operator's systems, documents, data and other information necessary
for the audit and shall allow a general assessment of the Operator's control procedures and
systems as far as these are relevant to the Joint Operations. The Operator shall also ensure
that the audit is performed efficiently and without unnecessary delay.
Further, the auditors shall have access to records and facilities necessary to review and
appraise the cash management procedures according to Article 1.2 and the procedures used
in awarding contracts and purchasing.
The Operator and the other Non-operators shall have at least 30 days written notice before
the planned commencement of an audit.
The Non-operators shall conduct the audit simultaneously and in a manner resulting in a
minimum of inconvenience to the Operator. If the Non-operators agree, audits should be
performed by a joint audit group.
For operators with more than one operatorship, the Non-operators and Operator may agree
with other non-operators in other joint Ventures with the same operator to carry out joint
audits of indirect cost and joint charging systems that are common to all operatorships.
4
No.: 032.
Established:
01.01.92
Revision no: 7
Page: 5
Under such an agreement these charges shall be excluded from the dedicated audit of the
Joint Operations. The provisions in Articles 1.4.1.1 and 1.4.1.2 shall also apply to such joint
audits.
1.4.1.1 Audit Report and prior follow-up meeting

A written report (audit report) shall be sent to all Parties within 3 months of the conclusion of
the audit.
The report shall include a summary of all issues reviewed by the auditors with relevant
comments to the handling of accounts and vouchers. Before the written report is distributed to
all Parties, unresolved audit matters shall be dealt with in writing and in at least one meeting.
Unresolved audit matters shall be dealt with in a solution-oriented dialog between the
Operator and the audit team who perform the audit on behalf of the Non-operators. Signed
minutes of the meeting shall be attached to the written report when it is forwarded to all
Parties. An agreed closing date for the audit shall be stated in the minutes of the meeting.
If the report is not submitted within the time-limit, the Non-operators shall loose their right to
take exceptions to the Operators charges to the Joint Account. Exceptionally, and where
special reasons exist, the Non-operators may by a written notification to the Operator extend
the time-limit to submit the report by a new short time-limit that may not exceed 15 working
days.
1.4.1.2 Treatment of unresolved audit claims

The Operator shall give a written reply to the report within 3 months of the receipt thereof. If
a Non-operator has comments to the Operators written reply, such comments shall be
submitted in writing. The Operator shall give a written reply to the comments. Unresolved
audit claims shall be dealt with in a dialog between the Operator and the Non-operators with
a view to finding an agreed solution.
Should the Operator fail to give a written reply to the report within 3 months of the time it was
received, the Operator shall forfeit its right to make objections to audit claims in the report.
Exceptionally, and where special reasons exist, the Operator may by a written notification to
the Non-operators extend the time-limit to submit its reply by a new short time-limit that may
not exceed 15 working days.
Should any unresolved audit claim not be settled within 9 months from the Operator received
the written report, the Operator shall:
i)
List the unresolved audit claim on the agenda for the next ordinary management
committee meeting and together with the notice of the meeting give a written summary
of the communication and treatment of the unsettled audit claim(s),
ii)
in case of a joint audit of the Operators Indirect costs and cost allocation systems
that are common to all operatorships convene the Partner forum for dealing with
unresolved audit claims
A party may propose the use of a jointly appointed independent expert to give an opinion on
unsettled audit claims or an alternative simplified dispute solution for the solution of any
unresolved audit claim. Such decision requires unanimous agreement among the Parties.
No.: 032.
3.
Established:
01.01.92
Revision no: 7
Page: 6
AUDIT PLANNING AND PREPARATION FOR AN AUDIT
Summary Time Table of Audit Provision

Accounting Agreement - Article 1.4.1, 1.4.1.1 and 1.4.1.2 - is the overruling document
Step
Timing
Aug-Sept previous year
->1
months
+1 month
Min 30 days
prior to Field
Work start
Action
Responsible
Planning meeting to agree on assets

to audit and on lead company
Notification to partners prior to
Operator notice
Appointed
COORDINATOR
Notification to Operator
Field Work Start
Operator and
Partner Lead
Field Work Close
Partner Lead
Approx 30
days after FW
close
Meeting to clear unresolved matters,

signed minutes attached to Report
+3 months
3 months after
FW close
Report to Operator, due date to be

confirmed in minutes of meeting
(step 3 above)
+6 months
3 months after
receipt of
Report
Operator to respond in writing
+12 months
9 months after
receipt of
Report
Operator to list unresolved claims

on the agenda for mgt committee
meeting (or Partner Forum for
overhead charges etc)
Nominated Lead
Partner Company
Nominated Lead
Partner Company
Operator
3.1. The Annual Joint Venture Audit Plan

The responsibility for this annual planning effort shall rotate annually amongst license
participants.
The Appointed Coordinator shall ensure following schedule to
representatives from all Operators and Non-Operators:
Schedule
By mid August to call for an annual work meeting
By end September to call for the annual final meeting
By end November to submit the next years Joint Venture audit schedule with
following particular information:
Details
All licenses/projects/units to be audited.
The gross auditable cost (actual or budget figures, as applicable)
The time and duration for each audit.
The company responsible for coordination of each audit.
The company responsible for leading each audit, if already agreed.
6
No.: 032.
Established:
01.01.92
Revision no: 7
Page: 7
All audits deferred to the following year.
Distribution of the result from the Work meeting for agreed audit schedule shall be made
no later than end of September together with an updated contact person and address list
for all companies involved in Norway Joint Venture license audits. Any subsequent
changes to the audit schedule need to be agreed in writing between the Operator and all
Non-Operators of the license, group of licenses, or operating unit concerned.
The Appointed Coordinator has the overall responsibility for coordinating and
nominating a lead company. Partners are expected to take an active role to volunteer for
the lead role. If an Audit Committee exists, such Audit Committee shall be responsible
for coordinating the audit and finding a lead company. Otherwise, the Non-Operator
with the largest share shall carry this responsibility. If audits are deferred beyond the two
year time frame stipulated in the standard audit clause, the Non-Operators need to obtain
agreement from the Operator that their audit rights for the period beyond the past two
years are not lost.
3.2
Preparation for an Audit
3.2.1 The Lead Auditor

The Lead Auditor shall have sufficient audit experience, including experience with use of
audit software and knowledge of Norwegian Joint Venture operations to lead the audit
efficiently, prepare an adequate audit report, and conduct all associated administrative
and follow-up activities. The other participating Non-Operators shall provide suitable
auditors to ensure the composition of a balanced and experienced team with regards to
the unit audited and the specific areas to be covered.
Once nominated, the Lead Auditor Company carries overall responsibility for
coordination, planning, conduct, reporting, follow-up, and all general administration of
the audit. Prior to and after the audit, the Lead Auditor (or Audit Committee Chairman)
serves as the single point of contact between the audit team and the Operator. The other
participating Non-Operators shall receive copies of all Lead Auditor correspondence with
the Operator.
3.2.2 Overheads / MultiVenture Audits

The overhead audits could, due to complexity and size, be split into separate audits in
order to make these large audits more manageable and improve the turnaround time
during the audit and audit follow-up. The objective should be to split each overhead audit
into two or more main audit areas, each of which should consist of groups of logically
related costs.
The implementations of and timeframes for such audits will be agreed each year at the
7
No.: 032.
Established:
01.01.92
Revision no: 7
Page: 8
Joint Venture Audit Planning Meeting.

The Audit Reports should be addressed to the management of the functional client
organization to ensure a sufficient level of management attention within the Operator's
organization. The Audit Coordinator would be copied on the audit report and all
correspondence related to the audit.
In addition to the points mentioned above, the Joint Venture Audit Guidelines listed
herein also apply to overhead audits.
3.2.3 Notification to Partners for License Audits

The Lead Auditor shall contact other non-operating partners for their participation in the
forthcoming audit, with the following alternatives, if
-
You want to participate with an auditor and cost share. If yes, please name
your representative(s).
You want to cost share only, in order to receive a copy of the audit report and
follow-up correspondence.
You neither want to participate nor to cost share
Where appropriate, distribute a draft audit program to all participating NonOperators including the audit scope, objectives, necessary system descriptions and
a suggested work program for comments in due time before the audit. The
individual auditor should bring to the attention of the Lead Auditor any additional
subjects to be included in the audit program.
Clarify audit cost sharing.
3.2.4 Notification of Audit to Operator

At least 30 days prior to each audit the Lead Auditor Company (or Audit Committee
Chairman) shall notify the Operator of the forthcoming audit and provide the following
information:
-
A reference to the annual Joint Venture audit schedule.

The names of the participating companies.
The names of the Lead Auditor and the other participants.
The audit period and dates.
A request that the Operator nominates an Audit Coordinator and Audit Contact
Person(s) for the electronic data and the accounting system.
A request for a pre-audit meeting, if requested by either party.
An indication of any advance information required for audit scope and
coverage planning.
8
No.: 032.
Established:
01.01.92
Revision no: 7
Page: 9
A request for information which should be available at the beginning of the

audit.
3.2.5 Audit Information

The Lead Auditor's preparations prior to audit start-up shall include:
Obtain electronic transaction data reconciled with billings and audit scope
from the Operator.
Make electronic transaction data available for participating auditors on request
prior to field work start.
Consider use of various media (CD-ROM, etc.), depending on availability at
the individual Operator to increase audit efficiency. (Correct quality of the
audit at reduced cost).
Utilize the advantages of electronically stored data and information to increase
overall audit productivity during the planning, audit field work, reporting and
follow-up.
Analyze, sort and evaluate the audit scope on the basis of risk and materiality
assessment.
Prepare work packages for the auditors on the basis of risk and materiality
assessment. The audit participants should in their answer to the audit invitation
(on request from the lead auditor) express their concerns about risk areas and
specific areas of interest to be included in their work package.
Request further documentation necessary for cost verification (vouchers,
contracts etc.) from the Operator prior to audit field work start-up.
-
Whenever applicable or appropriate the Operator should comply with Lead Auditor's
request for electronic data submission. The request should be made to the Operator's
Audit Coordinator well in advance of the audit field work. Data related to audits
scheduled for the whole year shall be available in January/February. The Audit
Coordinator should provide the Lead Auditor with the electronic data as soon as possible
and not later than 3 weeks prior to audit start-up.
The Operator should, as part of the data submission, provide the Lead Auditor with a
description of the file standard layout, as described in appendix C. Relevant supporting
tables must be supplied. The Operator must assure and confirm the quality and
completeness of transaction data by reconciling the transaction data with the billing
statement(s). Provision of transaction data on CD-ROMs would normally make
hardcopies/printouts of transaction lists superfluous. Any need for such hardcopies
should specifically be requested by the Lead Auditor. The data from the Operator are
confidential and must be treated accordingly, and the content of the electronic medium
should be made waste upon closure of the audit.
3.3. Audit Coordinator and Audit Contact Person(s)

The Operator shall nominate an Audit Coordinator and Audit Contact Person(s) for the
9
No.: 032.
Established:
01.01.92
Revision no: 7
Page: 10
electronic data and the accounting system and notify the Lead Auditor accordingly. The
Audit Coordinator shall have sufficient experience and knowledge of the Norwegian joint
venture operations to coordinate the audit efficiently. The Operator shall ensure that the
Audit Coordinator's position is such that it facilitates the resolution of audit issues and
exceptions. The Audit Contact Person(s) shall have sufficient experience and knowledge
with regards to the electronic data and the accounting system. Specifically the Audit
Coordinator should:
-
Coordinate the provision of all information/documents requested by the Lead

Auditor prior to the audit.
Arrange for adequate audit team work space.
Notify all departments affected by the audit.
Organize the opening meeting and ensure appropriate attendance.
Acquaint the audit team with the Operator's layout of facilities, accounting
systems, vouchers, ledgers, various department locations and any safety
considerations
Introduce the audit team to the appropriate Operator personnel.
Coordinate all audit activities including the distribution of information requests
and audit exceptions.
Obtain replies from the appropriate Operator personnel within an agreed time
Frame.
10
No.: 032.
4.
Established:
01.01.92
Revision no: 7
Page: 11
CONDUCT OF THE AUDIT
4.1. Audit Preparation

The Operator and the auditors will cooperate in order to facilitate the use of electronic
data tools to the extent possible for data processing, analysis and communication (e-mail)
through all phases of the audit. At the start of the audit field work, the Lead Auditor shall
agree with all audit team members the final audit scope and program, distribution of
work, mandays allocated, work paper standards, reporting methods, and team
organization. When the audit work is being assigned to the audit team members, due
consideration shall be given to the experience and background of each auditor and his/her
employing company's specific interests in the audit.
4.2. Opening Meeting

The opening meeting shall include the audit team, Audit Coordinator and other
appropriate Operator personnel. At this meeting, the Operator shall give a brief
orientation about his organization, activities and relevant systems and procedures related
to the audit scope. The Lead Auditor shall present the broad audit scope and the intended
communication and reporting procedures to the Operator.
4.3. Audit Process - Roles and Responsibilities

The joint objectives of the field work shall be to highlight risk areas in the joint accounts
and to settle as many audit exceptions as possible during the field work period. Both
parties are expected to contribute in order to obtain this objective.
In this respect it is essential that
-
potential issues are discussed in detail with the Operator.

audit exceptions are concise, have substance and are well documented.
the Operator takes immediate action to respond and resolve the issues within
agreed timeframes.
Each auditor will be responsible for carrying out and complementing detailed work and
test required in the areas assigned. Before reviewing a specific area, the auditor should
consult with the Lead Auditor to clearly define the objectives of the review and to
identify methods that might be employed to perform the review. Each auditor is
responsible for completing each review within the assigned mandays or to communicate
as soon as possible to the Lead Auditor that the review will not be completed within the
assigned mandays. After discussion with the auditor, the Lead Auditor will decide
whether the review is to be curtailed to stay within the mandate budget, or whether
additional mandays should be provided to complete the review.
11
No.: 032.
Established:
01.01.92
Revision no: 7
Page: 12
The Lead Auditor shall inform all team members regularly of all issues raised during the
audit, the replies received from the Operator, and the overall progress of the audit against
the original plan and program. If desired, weekly progress review meetings can be held
including the audit team, Audit Coordinator and appropriate Operator personnel.
4.4. Voucher Requests (VR)

If explored information is not retrievable via access in Operators system, a VR must be
written by the auditor in order to obtain applicable information.
4.5. Information Requests (IR)

Verbal clarification to a subject or to an IR response may sometimes be useful and
practical. However, if the explanation becomes vital for any IR or AE, the result shall be
written down and shared.
Information Requests as such shall always be issued in writing, and Operators answer
shall also be in writing. All Information Requests shall be numbered sequentially.
When possible, Information Requests should be maintained in an Operator provided
database. If this is not available, copies of the information requests must be logged and
filed by the Lead Auditor who is responsible to follow up on all open information
requests. Information requests which are still open after completion of the audit and the
solution-oriented follow-up meeting shall be included in the audit report.
4.6. Audit Exceptions (AE)

Audit exceptions prepared by the auditor responsible should be issued as early as possible
during the audit. All exceptions shall be numbered sequentially and reviewed by the Lead
Auditor prior to release to the Audit Coordinator (or into Operator database). If an issue
is contentious or arguable, the Lead Auditor should first consult with all team members
and the participating companies' Audit Managers.
Typically AE should have the following elements:
Comment / Observation: Properly describe and quantify (when possible) and
supported by appropriate documentation or IR references
Significance: If other than a straight forward booking error, a summary of
implications and consequences should be emphasized typically for Procedural
Findings
Action: Recommended corrective action to be stated
12
No.: 032.
Established:
01.01.92
Revision no: 7
Page: 13
All AE shall have the status of OPEN, ACCEPTED, CLOSED (e.g. when correction
vouchers have been issued) or WITHDRAWN. There should be a reference if the
exception is MF (Monetary Finding) or PF (Procedural), or both.
For Hydrocarbon (Measurement / Allocation) Audit Exceptions, additional reference to
one or several numbered observations attached to the report, may be useful additions.
4.7. Audit Close-Out Meeting

An audit close-out meeting will be held at the end of the field work to review the status
of all information requests, audit exceptions and Operator replies. The Lead Auditor and
the team shall review with the Operator each of the audit exceptions raised to ensure
common understanding of all audit concerns and to determine when any unanswered
exceptions or information requests will be responded to. The objective should be to solve
as many issues as possible.
If contentious or disputed issues have been raised, a second close-out meeting may be
held in an attempt to resolve these issues prior to the release of the audit report.
4.8. Audit Follow-Up

The Operator shall endeavour to complete the initial replies to all audit exceptions and
outstanding information requests prior to the follow-up meeting designed to clear
unresolved matters, cf section 2.
As soon as possible after the follow-up meeting the Lead Auditor shall submit a draft
audit report to all audit team participants for review and comment. If requested, an
updated draft including all review comments, shall be re-circulated to all participants
prior to the issuing of the final Audit Report to Operator.
4.9. Stand Still Agreement

For audits covering 2 year periods, execution of a Stand Still Agreement (see Appendix
D) shall be addressed within 3 years after the beginning of the first year comprised by the
audit in question and normally at:
1. the meeting to be held in accordance with JAA 1.4.1.1, second paragraph, or
2. at the end of field work meeting, if the audit is conducted in Q4 of the year the
audit is performed.
Such Stand Still Agreement shall apply for the following 12 months and shall cover any
audit exceptions being identified in the Minutes of Meeting from said meetings.
13
No.: 032.
Established:
01.01.92
Revision no: 7
Page: 14
If other audit exceptions are identified during the audit follow up, the partners could
request the operator to include these in the Stand Still Agreement.
5.
AUDIT REPORT
A formal audit report shall be released to the Operator not later than three months after
field work completion (deadline date to be confirmed in the minutes from Follow-up
meeting). It shall include a summary of all issues reviewed by the auditors with relevant
comments to the treatment in accounts and vouchers. The audit report shall be addressed
to the appropriate Management level above the unit audited within the Operator's
organization, e.g. Operators MC Chairman as referenced on License Web. The report
shall be signed in accordance with the Lead Auditor's company policy, and copies shall
be sent to all participating Non-Operators and partners having chosen to cost share only.
An essential element in the report is the Summary of Audit Exceptions to keep track of
status for all Exceptions / Recommendations until close status. The summary will
facilitate other participating companies follow-up and communication with their
management. AE Format and further recommended details in the report, ref Appendix C.
5.1
Operators rebuttal
The Operator shall give a written reply to the report within 3 months from receipt thereof.
The Operator's reply shall be addressed to the Lead Auditor's company Audit Manager. If
a Non-Operator has comments to the Operators written reply, such comments shall be
submitted in writing via the Lead Auditor. The Operator shall give a written reply to the
comments.
The Operator's reply shall identify all agreed audit adjustments/corrections with the
corresponding voucher references and booking dates. The Lead Auditor's company is
responsible for coordinating the review and discussion of the Operator's reply with the
other audit participants and the conduct of any further follow-up correspondence with the
Operator.
14
No.: 032.
5.2
Established:
01.01.92
Revision no: 7
Page: 15
Treatment of unresolved audit claims

Unresolved audit claims shall be dealt with in a dialogue between the Operator and
the Non-Operators with a view to finding an agreed solution. Should any unresolved
audit claim not be settled within 9 months from the Operator received the written
report, the Operator shall:
-
List the unresolved audit claim(s) on the agenda for the next ordinary
management committee meeting and together with the notice of the meeting
give a written summary of the communication and treatment of the unsettled
audit claim(s),
in case of a joint audit of the Operators Indirect costs and cost allocation
systems that are common to all operatorships convene the Partner forum for
dealing with unresolved audit claims
A Party may propose the use of a jointly appointed independent expert to give an
opinion on unsettled audit claims or an alternative simplified dispute solution for the
solution of any unresolved audit claim. Such decision requires unanimous agreement
among the Parties.
6.
AUDIT COST SHARING

The decision to share costs for the conduct of Norway joint venture audits rests with the
individual Audit Committee of each license, group of licenses, or operating unit. In the
absence of a formal Audit Committee, all Non-Operators shall agree prior to an audit
whether audit costs will be shared or not. Specific guidelines for audit cost sharing are
summarized in Appendix A attached hereto.
7.
PARTICIPATION ENTITLEMENT
Prior to each audit, all Non-Operators shall be requested to indicate their desired
participation in the forthcoming audit. Participation can be through a member on the team
and cost sharing or through cost sharing only. When nominating the audit team, efforts
shall be made to accommodate all Non-Operators wishing to participate.
All Non-Operators participating in the audit with an auditor will receive copies of all
correspondence relating to the audit. In addition, they are expected to participate actively
in the audit program preparation, the review and finalization of the audit report, and the
audit follow-up and close out process.
Non-Operators which only participate through cost sharing will receive a copy of the
audit report to the Operator and copies of all follow-up correspondence. They are also
entitled to request the Lead Auditor to include specific items in the audit program. The
audit program, audit memoranda and replies, and other selected information from the
15
No.: 032.
Established:
01.01.92
Revision no: 7
Page: 16
work paper files will be made available on written request to the Lead Auditor.
Non-Operators which do not participate by providing an auditor or agree to share in the
audit costs will not receive a copy of the audit report, nor are they entitled to any other
information relating to the audit.
8.
COMMUNICATION AND CONFIDENTIALITY

Unless otherwise agreed, any notice or other communication required according to the
Joint Venture Audit Guidelines listed herein, shall be sent in writing in the English
language, and may be communicated by delivery, mail, facsimile or by electronic mail.
The use of electronic mail for transfer of documents and files shall at all times be in
accordance with internationally recognised standards and controls as adopted by the
petroleum industry.
Confidential information shall be treated in strictest confidence and in accordance with
the relevant confidentiality agreements.
16
No.: 032.
Established:
01.01.92
Revision no: 7
Page: 17
APPENDIX A Cost Sharing
NORWAY JOINT VENTURE AUDIT COST SHARING

These details for Norway joint venture audit cost sharing were developed in early 1986 and have
subsequently been modified to reflect increases in Charge Out Rates. They serve as general
guidance, but may be modified to suit specific circumstances as deemed necessary by Audit
Committees or individual Non-Operator audits. For Overhead Audits, ref. 4.3 to this Appendix A
1.
Audit Cost Charge Out Rates

2009/2010
(a)
(b)
(c)
Per diem for auditors' salary plus departmental overhead costs 6.500 NOK/Day
Per diem for out of town auditors
2.500 NOK/Day
Per diem for local auditors
300 NOK/Day
The above rates will be adjusted each year from the start of the year based on the Consumer Price
Index (CPI) of Statistics Norway as of 15 July the preceeding year. Basis is July 2009. First
adjustment will be on 1 January 2011.
2.
Application of Charge Out Rates

-
The per diem rate (a) applies to all auditors including the Lead Auditor.
The per diem rate (a) applies to full working days only.
The Lead Auditor can charge per diem rate (a) for an additional 10 days for audits
of up to 2 weeks and 15 days for audits of 3 weeks or more to cover audit
preparation, report writing and audit follow-up work. (b) and (c) do not apply.
The initial per diem rate for out of town auditors (b) is made up as follows:
Hotel 1,700 NOK, meals 500 NOK, local transport, incidentals, etc. 300 NOK.
Out of town auditors can charge the per diem rate (b) for all intermediate
weekends (2 days) for which no return fares are reimbursed.
17
No.: 032.
Established:
01.01.92
Revision no: 7
3.
Transportation Charges
3.1.
Air fares will be charged to the audit costs on the following basis:
-
Page: 18
Norwegian base auditor location: One return trip for every week or part of a week
European base auditor location: One return trip economy premium class for every
two weeks or part of two weeks.
Outside Europe base auditor location: One return trip business class per audit
(four weeks duration or more)
3.2.
At locations with insufficient public transport or remote office locations, the cost of one
rental car can be charged to the audit costs. Car rental shall be made on the most
economic basis available to the audit team.
3.3.
Additional transportation charges for audit visits to Operator's branch offices or operating
locations, contractor offices etc. (plane, train, ferry) can also be charged to the audit costs.
To the extent possible, however, such visits shall be combined or covered with air fares
under 3.1 or car rental under 3.2 above. All other costs associated with travel hereunder
are deemed to be covered under the per diem rates in 1. above.
3.4.
Additional transportation charges for a visit by the Lead Auditor to the Operator for one
additional visit prior to or after the audit can be charged to the audit costs.
4.
Basis for Audit Cost Sharing
4.1.
Financial Audits: Under individual licenses, operating units or group of licenses, audit
costs shall be shared on the basis of each Non-Operator's financial share in the license or
unit, adjusted to exclude the Operator's share and also any Non-Operators who have
elected not to participate in cost sharing. By financing share is meant the Non-Operator's
payment as per the Billing Statement.
4.2
Hydrocarbon Audits: The sharing methodology is as under 4.3. below.
4.3
Overhead Audits: For specific overhead and indirect costs audits the following method
of cost sharing should be applied for all audits:
Each non-operator participating in the audit team bears his own costs.
Non-participating non-operators wishing the report and follow-up correspondence pay
NOK 30.000
Income on sale of reports is collected by and credited to the Non-Operator leading the
audit to compensate for extra time on planning, administration, report writing and followup.
18
No.: 032.
Established:
01.01.92
Revision no: 7
Page: 19
APPENDIX B Standard Format for Request and Delivery of

Electronic Transaction Data v/ attachments
OPERATOR
Postbox 999
9999 CITY
Attn.: Audit Coordinator
Stavanger, September 8, 2001
Audit of Unit:
, Year(s)
, Request for Electronic Data
With reference to the Norwegian Joint Venture Audit Guidelines, Chapter 3.4 and Appendix C,
we hereby request transaction data for the above unit with the record layout as shown in the
specification enclosed.
Please complete and return the attached information sheet, preferably as an e-mail attachment,
giving details of how the transaction data is organized and any reconciling items required to
agree the transaction data back to the Billing statement as at 31/12- ______.
The transaction data together with supporting tables should be stored in an appropriate medium
and forwarded, together with the completed information sheet, to the lead auditor within
_________________.
Regards,
Nnnnnnn Nnnnnnnnnn
Lead Auditor
Information to be addressed to:
COMPANY
Address
Att: Nnnnnnn Nnnnnnnnnn, Audit Dept.
19
No.: 032.
Established:
01.01.92
Revision no: 7
Page: 20
Audit:
Company:
Auditable Unit:
Year:
II
Transaction Reconciliation:
Total Expenditure as of:
NOK:
Total Amounts on CD:
NOK:
The transactions are reconciled back to the billing on a separate sheet.
III
File Specification:
We confirm that the transaction file has the following specification:
(See below for detailed definition of the format)
Format (Standard or Alternative):

Total number of records:
Number of CD- ROMS:
File Transaction file:
a)
STANDARD FORMAT (Fixed Length)
a)
b)
c)
d)
e)
f)
g)
h)
i)
ASCII format
Total length is fixed 244 characters
Position 1 and 244 include information in all records
Data is non-compressed or receiver has confirmed that he could decompress the files.
All dates are in YYMMDD format
Negative amounts should be given leading minus sign (No brackets)
No thousand separators on numerical data
Decimal point is"."
Each line ends with Carriage Return/Line Feed (ASCII 013 and 010)
b)
ALTERNATIVE FORMAT (Comma Separated)

We confirm that the transaction file has the following specification:
20
No.: 032.
Established:
01.01.92
Revision no: 7
a)
b)
c)
d)
e)
f)
g)
h
i)
Comma Separated Format

Text delimiter should be Quote Marks,"Text",
Field separator should be comma
All dates are in YYMMDD (Numerical) format
Negative values should have leading minus sign (No brackets)
No thousand separator on numerical data
Decimal point is "."
Each line ends with Carriage Return/Line Feed (ASCII 013 and 010)
Supporting Tables could also be in Comma Separated format
IV
AUDIT CONTACT PERSONS:
Electronic Data:
Name:
Phone:
Fax:
e-mail:
Accounting System:
Name:
Phone:
Fax:
e-mail:
21
Page: 21
No.: 032.
Established:
01.01.92
Revision no: 7
Page: 22
RECORD SPECIFICATION
Please specify the complete accounting string necessary for carrying out the audit
and as downloaded on diskette.
Field Name 1)
Start
Field length Field type 2)
position
1,00
1,00
2,00
3,00
4,00
5,00
6,00
7,00
8,00
9,00
10,00
11,00
12,00
13,00
14,00
15,00
16,00
17,00
18,00
19,00
20,00
21,00
22,00
23,00
24,00
Notes:
1) Field name used by the Operator
2) Field type: Numerical (NUM) or Alpha-numerical (ALPHA)
The last field must be: End of record delimiter, Field length: 1, Field type: Alpha.
22
No.: 032.
VI
Established:
01.01.92
Revision no: 7
Page: 23
DESCRIPTION OF SUPPORTING TABLES:

The following supporting tables are included as separate files:
(Nature of cost, Chart of accounts, Cost Center, Contract and supplier references
etc.)
Supporting tables must be of the same format as the transaction data file - Either
standard format (fixed length) or alternative format (comma separated).
When supporting tables and transaction data file are of a fixed length record format,
the common field in both the supporting table and the transaction data file must be of
the same length. I.e. account number must be four positions in both the supporting
table and the transaction data file.
1) Chart of accounts:
Description
Field Name
Filename
Length
Start position Field type
Field
length
1,00
2,00
3,00
4,00
2) ...........................
Description
Field Name
Filename
Length
Field
length
1,00
2,00
3,00
4,00
3) ....................
Description
Field Name
Filename
Length
1,00
2,00
23
Field
length
No.: 032.
Established:
01.01.92
Revision no: 7
Page: 24
3,00
4,00
If needed, add an additional page 5 with description of more supporting tables.
RECORD SPECIFICATION - EXAMPLE:
(According to the former standard for downloading transaction data)
1,00
2,00
3,00
4,00
5,00
6,00
7,00
8,00
9,00
10,00
11,00
12,00
13,00
14,00
15,00
16,00
17,00
18,00
19,00
20,00
21,00
22,00
23,00
24,00
Standard Field
Name
LICENCE/PROJECT
NATURE OF COST
COST CENTER
COMMITMENT REF.
AFE
VOUCHER SERIES
VOUCHER NUMBER
BOOK DATE
PERIOD
VENDOR ID
AMOUNT, CURRENCY
CURRENCY CODE
AMOUNT NOK
VAT CODE
CREDIT/DEBIT CODE
DESCRIPTION/TEXT
ADDITIONAL INFO 1
ADDITIONAL INFO 2
ADDITIONAL INFO 3
ADDITIONAL INFO 4
ADDITIONAL INFO 5
ADDITIONAL INFO 6
ADDITIONAL INFO 7
End of record delimiter
Start
position
1,00
11,00
21,00
31,00
41,00
51,00
61,00
71,00
77,00
81,00
91,00
106,00
116,00
131,00
136,00
137,00
162,00
170,00
178,00
186,00
193,00
218,00
231,00
244,00
Standard
Actual Field
field length
name 1)
10,00
10,00
10,00
10,00
10,00
10,00
10,00
6,00
4,00
10,00
15,00
10,00
15,00
5,00
1,00
25,00
8,00
8,00
8,00
7,00
25,00
13,00
13,00
1,00
Dummy Character ":"
Field
type 2)
ALPHA
Used
length 3)
1,00
TOTAL LENGTH: 244

The marked fields would usually require a separate description file (where available)
1)
Field name used by the Operator (Common name)
2)
Field type Numerical (NUM) or Alpha-numerical (ALPHA)
3)
Indicate the used length of text fields. If the field is not in use, indicate with N.A. (Not applicable)
24
No.: 032.
Established:
01.01.92
Revision no: 7
Page: 25
APPENDIX C Suggested Audit Report Format

1.
Cover letter from Lead Company to the Operator
2.
Management summary (no need to repeat from Fact book, from audit Program or
comprehensive repeat of audit comments)
3.
Background information (typical elements are Scope and Objectives, expenditure

coverage, license mix when applicable, Audit Period, Location, Audit Coordinator and
Team)
4.
Summary / List of Audit Exceptions in table format *) as Attachment 1

AE # and MF/PF nature
Subject
Amount Claimed NOK
Amount Accepted NOK
Amount Rejected NOK (if any)
Amount Withdrawn NOK (if any)
Status: Open, Accepted or Closed
Correction Voucher
5.
List of Open Information Requests
6.
Detailed Audit Findings / Exceptions - as Attachment 2

pending volume of communication etc, an alternative format to normal word writing is
recording the facts in three columns,
Comment / Observation
Significance (when applicable)
Recommendation (includes Operators response, Rebuttals and Status as Open /
Accepted / Closed / Withdrawn)
7.
Signed minutes of follow-up meeting
*) SUMMARY OF AUDIT EXCEPTIONS AND STATUS

AE #
Description *)
Type
MF /
PF
Amount
Claimed
Amount
Accepted
Amount
Withdrawn
Status
Corr.
Vouch ref.
*) for Hydrocarbon summary, a reference to findings detailed in another spreadsheet may be useful.
25
No.: 032.
Established:
01.01.92
Revision no: 7
Page: 26
APPENDIX D Format Stand Still Agreement

REPORT FROM THE NORWEGIAN OIL AND GAS WORK GROUP CONCERNING TIME BARRING
IN CONNECTION WITH AUDIT EXCEPTIONS
1.
Introduction
A work group has been established with the objective to address and propose a practical
handling of the time bar issue with regards to audit exceptions. The mandate of the group
concerns the issue of time barring in relation to the 24-month audit pursuant to the
Accounting Agreement (hereinafter referred to as the JAA) Section 1.4. For the avoidance
of doubt, 1 year audits are excluded from the mandate of this work group.
The work group consists of the following members:
1.
2.
3.
4.
5.
6.
7.
8.
9.
Kristin Skofteland, TOTAL

Per Dahl Hansen, TOTAL
Tine Harstad Eggen, Statoil
Terje Tysvr, Statoil
Kari Olsen, DONG
Kristin Dreyer, BP
Line Gundersen, ConocoPhillips
Ingeborg Oddsen, Shell
Rasmus Mellemstrand, Talisman
In the following an overview of the legal provisions which apply will be given in section 2,
including comments concerning the basis for time barring of audit exceptions.1
In section 3 we will present a proposal for a standard procedure on how to avoid audit
exceptions being time barred, and a proposed wording for a standard Stand Still Agreement
can be found in attachment 1 to this report.
2.
The Norwegian Limitation Act
2.1.
Limitation period
Any claim for money is subject to limitation in accordance with the Act no 19 of 18 May
1979 relating to the Limitation Period for Claims (hereinafter Limitation Act). The duration
of the general limitation period is 3 years, cf. Section 2 of the Limitation Act.
1 Please note that interpretations herein shall not be binding upon the companies.
26
No.: 032.
2.2.
Established:
01.01.92
Revision no: 7
Page: 27
Commencement of the limitation period
The main rule is that the limitation period runs from the date on which the creditor first has a
right to demand payment/performance and that upon limitation the creditor loses his right to
such payment. Time barring of a claim will also include any interests and similar
supplementary performances related to the claim.
The commencement of the limitation period is determined based on objective considerations
only. Whether the creditor had sufficient information to enforce the claim is not relevant
when assessing the starting point. Lack of necessary information will however be of relevance
when determining when a claim is in fact time barred. This will be further commented below
in section
For a claim with a fixed due date, the due date will be the commencement of the limitation
period. Furthermore, for a claim arising from breach of contract the commencement will be
the date when the relevant breach takes place. However, it is more difficult to determine the
starting point where the parties have not agreed on any due date. In these situations the
commencement of the limitation period will depend on an overall assessment of when the
creditor first has a right to demand performance.
With regards to audit exceptions, these claims are generally based on incorrect
payment/debiting. Audit exceptions can therefore be considered as reimbursement claims
from the licensees (other than the operator). In most cases the commencement of the
limitation period will therefore be the date when the relevant payment from the operator/the
debiting takes place, as this is the date when the licensees first have a right to claim
reimbursement/correction in relation to the joint account. However, this is not a given starting
point - one will therefore in principle have to assess the starting point for each potential
claim.
2.3.
Extension
A creditor may be entitled to a supplementary limitation period if he has not asserted the
claim due to lack of necessary knowledge of the claim or of the debtor, cf. Section 10 of the
Limitation Act. In such cases the period of limitation will expire at the earliest one year after
the date on which the creditor obtained or should have obtained necessary knowledge. This
implies that a claim will not be time barred even though the general limitation period has
expired, if one can prove that the creditor lacked necessary knowledge. Note however that the
start of the supplementary limitation period is not linked to the commencement or expiry of
the general limitation period of 3 years.
27
No.: 032.
Established:
01.01.92
Revision no: 7
Page: 28
The creditor will lack necessary knowledge when he does not have information concerning
the factual circumstances which makes it reasonable and justifiable to initiate court
proceedings. However, since it is of relevance when the creditor should have obtained
knowledge of his claim, the creditor will to a certain extent have to examine the factual
circumstances in order to be entitled to a supplementary limitation period where relevant. The
debtor must hence act with due care.
With regards to audit exceptions, the licensees will in some cases lack necessary knowledge
of potential claims until the audit work is initiated and the audit report is available. However,
exceptions may apply where for instance specifications have been given to the licensees in
connection with cash calls and/or billings etc.
2.4.
Interruption of the limitation period
The limitation period can be interrupted by legal action etc. and also by acknowledgement by
the debtor, cf. Section 14 et seq. In relation to acknowledgement, it is sufficient that the
debtor admits that there is basis for the claim, it is not necessary that he consider himself
responsible.
Furthermore, in case of long-lasting discussions between the involved parties it is common at
some stage to enter into a Stand Still Agreement, as it is not desirable that court proceedings
are initiated mainly to interrupt the limitation period. Such stand still agreement shall not, in
any constitute any precedence for how the audit exception is resolved between the operator
and the licensees. The debtor may therefore agree to extend the limitation period after a claim
has arisen. However, the parties may not agree in advance that limitation shall not set in
pursuant to the provisions in the Limitation Act. Such an agreement will be legally void.
2.5.
Non compatibility: the audit procedure pursuant to the JAA
If one compares the limitation period of 3 years with the procedure for audit as defined in the
JAA, one will see that the 24-month period for carrying out the audit as stated in the JAA
Section 1.4.1 implies that the licensees have limited time to agree on any outstanding issues
before time barring occurs. Also, the audit follow up may lead to time consuming discussions
regarding the audit claims which may in turn be subject to time barring during the
discussions. This can be illustrated with the schedule below:
28
No.: 032.
Established:
01.01.92
Revision no: 7
Page: 29
Figure 1: Time line example (for illustration purposes only):
THE NON COMPATIBILITY FOR AUDIT OF THE TIME BAR ISSUE WITH JOA
YEAR OF AUDIT FOR JV LICENSES AUDITS (N-1 & N-2)

2007
Q1
Q2
AUDIT EXECUTION
AUDIT FOLLOW UP
2009
2010
2008
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
PERIOD OF TIME AUDITED

PRE AUDIT
AUDIT
AUDIT
REPORT
MEETING REF AA 1.4.1.1
= STARTING UP THE TIME BAR
OPE.
REPLY
TO DEAL WITH
OPEN ISSUES
AUDIT FIELD - 3 WEEKS
TIME BAR PERIOD LIMITED TO 3 YEARS

STAND STILL AGREEMENT
3.
Proposal for procedure
The work group recommends implementing a standard procedure in connection with the audit
work, so that the issue of time barring and a Stand Still Agreement would automatically be
addressed and handled during the audit work. The work group recommends that this
procedure is implemented in the Norway Joint Venture Audit Guidelines.
Since the parties can not agree in advance that limitation shall not set in, the intention of
entering into a Stand Still Agreement should first of all be addressed and added as an item on
the agenda for the yearly audit meeting where all companies in principle will be represented.
Furthermore, the undertaking of a Stand Still Agreement should be dealt with at the meeting
to be held in accordance with JAA 1.4.1.1, second paragraph where the licensees go through
all outstanding issues from the audit, including any audit exceptions and information requests.
Such meeting is held after the field work has been completed but prior to the issuance of the
audit report. Accordingly, the meeting will as a basis take place within the audit execution
year, and therefore prior to any audit claim being time barred pursuant to the general 3 year
limitation period, cf. the time line illustration above.
Alternatively, if the audit is conducted in Q4 of the audit execution year, undertaking of a
Stand Still Agreement should be dealt with at the end of field work meeting (meeting
29
No.: 032.
Established:
01.01.92
Revision no: 7
Page: 30
normally held at the end of the audit field work and prior to meeting regulated in JAA article
1.4.1.1)
If the operator signs a Stand Still Agreement at at the JAA article 1.4.1.1 meeting or at the
end of field work meeting, one will first of all avoid any audit exceptions being time barred
during the audit follow up for the duration of the agreement. Also, the parties will have a
fixed date to act in accordance with to avoid any time barring, which implies predictability for
all parties. Secondly, by signing an agreement at one of these meetings one can avoid any
discussions concerning commencement of the limitation period, supplementary limitation
period and the question of whether the licensees had necessary knowledge of a claim.
However, in order for the operator to sign a Stand Still Agreement at the JAA article 1.4.1.1
meeting or at the end of field work meeting, the Minutes of Meeting should be prepared and
ready to sign at the end of the meeting. Alternatively, the Agreement may be enclosed the
Minutes of Meeting which shall be sent to the participants for signing shortly after the
meeting is held.
Furthermore, the undertaking of a Stand Still Agreement at the meeting in accordance with
JAA 1.4.1.1 or at the end of field work meeting or alternatively when signing the Minutes of
Meeting following such meeting is based on the assumption that the audit exceptions are
sufficiently identified at this stage. To be covered by the Stand Still Agreement open
information requests must be converted to audit exceptions.
The operator can not undertake an agreement where a claim is not identified or is only
vaguely stated. One does not have to specify any amount or give an estimate with regards to
the relevant claim. However, the frame of each potential claim will, to a certain extent, have
to be specified so that the operator knows which claims the undertaking comprises.
All outstanding audit exceptions identified in the field work will be comprised by the Stand
Still Agreement. If the licensees identify other audit exceptions during the audit follow up,
the partners could request the operator to include these in the Stand Still Agreement. The
operator shall not, however be obligated to accommodate such requests.
30
No.: 032.
Established:
01.01.92
Revision no: 7
Page: 31
ATTACHMENT 1 STAND STILL AGREEMENT
STAND STILL AGREEMENT

This Stand Still Agreement is undertaken in relation to audit performed for License [ x
and x] for the years 20xx and 20xx.
[Company name] hereby declares that it will not claim time barring pursuant to the
Norwegian Limitation Act for any audit exceptions as specified in the Minutes of Meeting
dated [dd.mm.yyyy] up to and including one year after the date of signing this Stand Still
Agreement.
This Stand Still Agreement shall not constitute any precedence for how the audit
exceptions are resolved.
[Place, date]
Name:
_________________
[Authorized signature]
31

Norway Joint Venture Audit Guidelines

Загружено:

Сведения о документе

Авторское право

Доступные форматы

Поделиться этим документом

Поделиться или встроить документ

Параметры публикации

Этот документ был вам полезен?

Это неприемлемый материал?

Авторское право:

Доступные форматы

Norway Joint Venture Audit Guidelines

Загружено:

Авторское право:

Доступные форматы

032 - NORWEGIAN OIL AND GAS

Guidelines established by Norwegian Oil and Gas Associations

Date revised: 01.06.10

JOINT VENTURE AUDIT PROVISIONS.............................................................................................. 4

AUDIT PLANNING AND PREPARATION FOR AN AUDIT .............................................................. 6

The Annual Joint Venture Audit Plan ..................................................................................................... 6

Audit Coordinator and Audit Contact Person(s) .................................................................................... 9

Audit Preparation ................................................................................................................................. 11

Opening Meeting .................................................................................................................................. 11

Audit Process - Roles and Responsibilities ........................................................................................... 11

Voucher Requests (VR) ......................................................................................................................... 12

Information Requests (IR) ..................................................................................................................... 12

Audit Exceptions (AE) ........................................................................................................................... 12

Audit Close-Out Meeting ...................................................................................................................... 13

Audit Follow-Up ................................................................................................................................... 13

Stand Still Agreement ........................................................................................................................... 13

AUDIT REPORT .................................................................................................................................... 14

Operators rebuttal .............................................................................................................................. 14

Treatment of unresolved audit claims ................................................................................................... 15

AUDIT COST SHARING ....................................................................................................................... 15

PARTICIPATION ENTITLEMENT ...................................................................................................... 15

Date revised: 01.06.10

COMMUNICATION AND CONFIDENTIALITY ................................................................................ 16

APPENDIX A Cost Sharing ......................................................................................................................... 17

Audit Cost Charge Out Rates

Application of Charge Out Rates .............................................................................................................. 17

Basis for Audit Cost Sharing .................................................................................................................... 18

Date revised: 01.06.10

JOINT VENTURE AUDIT PROVISIONS

1.4.1 General Provisions

Date revised: 01.06.10

1.4.1.1 Audit Report and prior follow-up meeting

1.4.1.2 Treatment of unresolved audit claims

Date revised: 01.06.10

AUDIT PLANNING AND PREPARATION FOR AN AUDIT

Summary Time Table of Audit Provision

Aug-Sept previous year

Planning meeting to agree on assets

Field Work Start

Field Work Close

Meeting to clear unresolved matters,

Report to Operator, due date to be

Operator to respond in writing

Operator to list unresolved claims

3.1. The Annual Joint Venture Audit Plan

Date revised: 01.06.10

All audits deferred to the following year.

Preparation for an Audit

3.2.1 The Lead Auditor

3.2.2 Overheads / MultiVenture Audits

Date revised: 01.06.10

Joint Venture Audit Planning Meeting.

3.2.3 Notification to Partners for License Audits

3.2.4 Notification of Audit to Operator

A reference to the annual Joint Venture audit schedule.

Date revised: 01.06.10

A request for information which should be available at the beginning of the

3.2.5 Audit Information

3.3. Audit Coordinator and Audit Contact Person(s)

Date revised: 01.06.10

Coordinate the provision of all information/documents requested by the Lead

Date revised: 01.06.10

CONDUCT OF THE AUDIT

4.1. Audit Preparation