Staatsolie Annual Report 2017

Staatsolie Maatschappij Suriname N.V. 

Annual Report 2017 1 

annual 

report 

Notes to the Consolidated financial statements for the years ended December 31, 2017 and 2016 

(continued) 

Inventories are stated at the lower of cost and net realizable value. Net realizable value is the estimated 

2017 

selling price in the ordinary course of business, less estimated costs of completion and the estimated 

costs to sell. 

The cost of crude oil and refined products is the purchase cost, the cost of refining, including the 

appropriate proportion of depreciation, depletion and amortization and overheads based on normal 

operating capacity, determined on a weighted average basis. 

The net realizable value of crude oil and refined products is based on the estimated selling price in the 

ordinary course of business, less the estimated costs of completion and the estimated costs necessary to 

make the sale. 

Materials and supplies are valued using the weighted average cost method. 

Pipeline fill 

Crude oil, which is necessary to bring a pipeline into working order, is treated as a part of the related 

pipeline. This is on the basis that it is not held for sale or consumed in a production process, but is 

necessary to the operation of a facility during more than one operating cycle, and its cost cannot be 

recouped through sale (or is significantly impaired). This applies even if the part of inventory that is 

deemed to be an item of property, plant and equipment cannot be separated physically from the rest of 

inventory. It is valued at cost and is depreciated over the useful life of the related asset. 

n. Impairment of non-financial assets 

The Group assesses at each reporting date whether there is an indication that an asset may be impaired. 

If any indication exists, or when annual impairment testing for an asset is required, the Group estimates 

the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash 

generating units (CGU) fair value less costs of disposal and its value in use. It is determined for an 

individual asset, unless the asset does not generate cash inflows that are largely independent of those 

from other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its 

recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In 

assessing value in use, the estimated future cash flows are discounted to their present value using a pretax 

discount rate that reflects current market assessments of the time value of money and the risks 

specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken 

into account. If no such transactions can be identified, an appropriate valuation model is used. 

Impairment losses of continuing operations are recognized in the consolidated statement of profit or loss 

in those expense categories consistent with the function of the impaired asset, except for a property 

previously revalued where the revaluation was taken to OCI. In this case, the impairment is also 

recognized in OCI up to the amount of any previous revaluation. 

Confidence in Our Own Abilities 

Page 63

Annual Report 2017 

ANNUAL 

report 

2017


Vision 

• Leading the sustainable development of Suriname’s energy industry. 

• Making a strong contribution to the advancement of our society. 

• Becoming a regional player with a global identity in the energy market. 

Mission 

To develop Suriname’s 

hydrocarbon potential over the full 

value chain, to generate electricity 

and, to develop renewable 

sustainable energy resources. 

To secure the energy supply of 

Suriname and to establish a solid 

position in the regional market. 

To expand our reputation based on 

our growth performance, flexibility 

and corporate social responsibility. 

Values 

HSEC Focused: 

We put health and safety first, 

strive for zero harm to our people 

and the communities around us, 

and minimize negative impacts 

upon the environment. 

Integrity: 

We are honest and do what 

we say we will do. 

People Focused: 

We create a supportive and 

collaborative environment, respect 

each other, are open to other’s 

ideas and facilitate personal 

and professional growth. 

Excellence: 

We set high standards for quality, 

strive to exceed expectations and do 

our work with a sense of urgency. 

Accountability: 

We accept responsibility for our job 

and actions, are co‐operative, and 

create a non‐blaming environment.


Overview 2017 

Crude Production 

5.95 million barrels 

Gross Revenues 

(2017 vs 2016) 


$ 434 million 

2016 

$ 358 million 

2015 

Total Sales 

Premium 

Gasoline 

Premium 

Diesel 

Fuel Oil & 

Crude 

Bitumen 

24K bbls 593K bbls 1,986K bbls 3,221K bbls


Supervisory Board 

E. Boerenveen Chairman 

G. Asadang Member 

A. Immanuel Member 

E. Poetisi Member 

M. Rommy Member 

I. Tholen Secretary


Contents 

8 General Information 

10 Letter of the Managing Director 

14 Financial and Operational Performance 2017 

25 Independent auditor’s report to 

shareholders of Staatsolie Maatschappij NV 

36 Consolidated statement of profit or loss 

37 Consolidated statement of other 

comprehensive income 

38 Consolidated statement of financial position 

40 Consolidated statement of changes 

in equity 

41 Consolidated statement of cash flows 

44 Index to notes to the consolidated financial 

statements


8 

General Information 

As at December 31, 2017 

Sole Shareholder 

The Republic of Suriname represented by: 

• the President, His Excellency 

D. Bouterse, on his behalf: 

• the Vice President, A. Adhin 

Supervisory Board 

E. Boerenveen Chairman 

G. Asadang Member 

A. Immanuel Member 

E. Poetisi Member 

M. Rommy Member 

Board of Executive Directors 

R. Elias Managing Director 

B. Dwarkasing Upstream Director 

A. Moensi-Sokowikromo Finance Director 

Deputy Director 

A. Jagesar Downstream Deputy 

Director 

Asset Managers 

P. Brunings Production 

Asset Manager 

C. Hughes Refinery Asset 

Manager 

R. Spuij Exploration & Appraisal 

Asset Manager 

Division Managers 

Corporate 

I. Ambrose Manager Corporate 

Audit 

D. Brunings Manager Corporate 

Communication 

M. Daal Vogelland Manager Petroleum 

Contracts 

J. Gajadin Joella Manager Corporate 

Legal Affairs 

V. Gangaram Panday Manager Corporate 

Planning & Control 

T. Haarloo Manager Corporate 

HRM 

S. Mannes Manager Health, 

Safety, Environment & 

Quality Corporate 

R. Ramautar Manager Renewable 

Energy Sources 

A. Ramsaransingh-Karg Manager Procurement 

Corporate 

D. Ratchasing SAP Program 

Manager 

A. Sleman Manager Information & 

Communication 

Technology 

A. Vermeer Manager Finance 

Administration 

Upstream 

K. Ashruf-Thijm Manager HRM 

Upstream 

R. Bissumbhar Manager Production 

Unit Tambaredjo 

P. Goerdajal Manager Drilling 

Operations 

D. Kertotiko Manager Technical 

Support Services 

B. Nandlal Manager Functional 

Support Services 

A. Nelson Manager Exploration 

A. Schuitemaker-Nghollo Manager Production 

Unit TNW/Calcutta 

R. Soekhlal Manager Health, 

Safety & Environment 

Upstream 

R. Speelman Manager Procurement 

Upstream 

Downstream 

C. van der Bliek Manager Maintenance 

& Turnaround Refinery 

S. Chintoe Manager Business 

Economics (Acting) 

P. Gray Manager Marketing 

W. Gajapersad Manager Refining Operations 

K. Kalijan Manager HRM Downstream 

K. Lie A Kwie Manager Health, Safety & 

Environment Downstream 

D. Pello Manager Technical Services 

M. Woelkens Manager Procurement 

Downstream 

Subsidiaries 

GOw2 Energy Suriname N.V. 

A. Nai Chung Tong Managing Director 

C. Venetiaan-Heuvel Finance Director 

Ventrin Petroleum Company Ltd 

A. Ghent Chief Executive Officer 

L. Brunings Chief Financial Officer 

Staatsolie Power Company Suriname N.V. 

E. Fränkel Managing Director 

Staatsolie Power Company 

Suriname N.V. 

A. Kleiboer Operations Manager 

Staatsolie Power


Board of Executive 

Directors 

(from the left): 

B. Dwarkasing Upstream Director 

R. Elias Managing Director 

A. Moensi‐Sokowikromo Finance Director 

A. Jagesar Downstream Deputy Director


10 

Letter of 

the Managing Director 

After a few difficult years, caused by the collapse 

in oil prices, the reference for our crude oil (USGC 

HSFO Waterborne) went from near US$ 100/bbl 

between 2011 and 2013 to US$ 16/bbl in January 

2016, Staatsolie regained its health in 2017. This was 

also driven by the cash which started to flow from 

our key investments in the refinery and the Merian 

gold mine. The average posting price of our crude 

was US$ 47/bbl in 2017, compared to US$ 32/bbl 

in 2016. In 2017, Staatsolie realized consolidated 

gross revenues of US$ 434 million, a 21% increase 

compared to 2016. Our EBITDA for 2017 ended 

at US$ 285 million, with a profit before tax of 

US$ 94 million, a significant increase compared to the 

US$ 9 million loss in 2016. With these results, 

Staatsolie’s contribution to the government, 

consisting of taxes and dividend, amounted to 

US$ 129 million in 2017. 

We can now focus on creating value on the long 

term. We can only deliver this if we are well prepared 

to live in a ‘low for longer’ oil price environment. To 

do this, we have to ensure that we stay in the lowest 

cost quartile at all times. I am pleased to note that 

we did so in 2017, and this remains the bedrock of 

our strategy. It is not just about costs however. To 

fully reap the benefits of a commercial discovery 

offshore, which we are convinced will happen on 

short term, we must step up and prepare ourselves 

to be the partner of choice for international oil 

companies (IOCs). 

Delivering today, preparing for tomorrow 

We put health and safety first, strive for zero harm 

to our people and the communities around us, 

and strive to minimize negative impacts upon the 

environment. Unfortunately, we did have 2 Lost Work 

Day Cases in 2017. Our performance on this lagging 

indicator is improving because we are shifting our 

thinking towards leading safety indicators. 

This year we produced an average of 16,300 

bbls Saramacca Crude per day 5.95 MMbbls in 

to t a l , j u s t 1 % b e l o w t a r ge t . I n 2 018 , o u r t a r ge t i s 

6.02 MMbbls and our long term objective is to 

secure production around 6 MMbbls per year 

from our 3 existing onshore fields. In order to 

achieve this long term target, we will aggressively 

pursue Improved/Enhanced Oil Recovery (IOR/EOR) 

1 1


methods to increase our current 20% ultimate 

recovery rate to 25-30%. 

After resolving start-up issues during 2016, our 

refinery managed to produce an average of 9,000 

bbls high-end products per day from August to 

December 2017. Pleasingly, that was 50% more than 

the previous 7 months of the year. On December 25 

the milestone of 10,000 bbls per day of premium 

diesel and gasoline was reached – a worthy Christmas 

present for the team! In 2018 our target is an average 

of 8,000 bbls high-end products per day. The focus 

of the refinery operations remains to ensure a steady 

output increase against lower costs. 

In 2017, we also saw our first full year of gold 

production from the Merian gold mine, with our 

25% share yielding 127,000 oz., contributing 

US$ 92 million to Staatsolie’s EBITDA at an average 

gold price of US$ 1,265/oz. In 2018, we expect 

similar results from this partnership. 

Following a rigorous play based exploration process 

and an independent expert review, our exploration 

team identified 20 prospects in our nearshore 

acreage in 2017 – a commendable achievement. 

In 2018, following further assessments, we started 

the preparations for a 10-well exploration drilling 

campaign nearshore, with execution starting the 

second quarter of 2019. 

Offshore partnerships 

Although the 2 exploration wells drilled offshore by 

our partners in 2017 did not result in a discovery, 

I remain extremely optimistic that a commercial 

discovery is on the horizon. This belief is shared 

by the industry as shown by the closing of 2 new 

Production Sharing Contracts with renowned 

IOCs Ex xon, Hess and Statoil in 2017. In 2018, 

2 exploration wells will be drilled and for 2019 

another 5 are planned. It is of utmost importance 

we get prepared for what I believe is the near-term 

game changer for both Staatsolie and Suriname 

when a discovery is made. That is why we hosted 

a National Oil Seminar in October 2017 to kickoff 

a dialogue with the government, and we will be 

conducting an industrial baseline study in 2018 

with the local business community and educational 

institutes to determine Suriname’s readiness gap. 

cost quartile, we will have to enter the international 

capital market preferably through an Initial Public 

Offering (IPO). This requires us to bring our 

company to world-class standards. With regard 

to our debt position, we will have refinanced our 

US$ 700 million outstanding facilities by May 2018 

to release US$ 100 million for nearshore exploration 

without taking on additional debt. The next step in 

our financing strategy is to diversify our sources of 

funds by creating a mix of lenders. To this end, we 

intend to issue an international bond in the next 12 

months. This will introduce Staatsolie to international 

investors and as such help prepare for an IPO. 

In 2017 we further rolled out our culture change 

program, through which we strive to embed our core 

values in our behavior and performance management 

in our daily operations. Additionally, we are putting 

2 key programs in place: succession planning and 

secondments to international oil companies for our 

young, bright talent. These secondees will return 

to us with enhanced capabilities and performance 

driven behavior that culture of multinationals 

deliver. Our next step is to simplify the way we run 

our business. In the end, I want all of us to have a 

stronger confidence in our own abilities – one that 

will be shared by our partners. It is our aim that our 

entire workforce comes to work every day with a 

true sense of purpose and leaves with a sense of 

accomplishment. 

A new era 

2017 has been a good year and I want to thank 

our employees, our Supervisory Board and our 

Shareholder for their continued belief. I am sure 

2018 will be even better. With a renewed focus 

on our nearshore and offshore, partnering with 

international oil companies, and joining the 

international capital market, we are at the beginning 

of a new era for Staatsolie, the business community 

and Suriname. 

Rudolf Elias 

Managing Director 

Creating a world-class company 

In order to participate in an offshore discovery, 

which we will only pursue for projects in the lowest


12

Our exploration team identified 20 prospects in the nearshore acreage. 

Annual Report 2017 13


14 

Financial and 

operational Performance 2017 

Financials 2017 

In 2017, the average posting price per barrel was 

US$ 47 compared to US$ 32 in 2016, an increase 

of 47%. Gross revenue was US$ 434 million 

compared to US$ 358 million in 2016. This is an 

increase of 21% compared to 2016 and includes 

net cash income from the participation with 

Newmont Merian Gold Mine of US$ 46 million. 

Profit before tax is US$ 94 million compared to 

the US$ 9 million loss in 2016. Contribution to the 

Government was US$ 129 million, compared to 

US$ 41 million in 2016. 

The breakdown of sales and revenue for 2017 was 

as follows: 

In this regard we have engaged with Ernst & 

Young, one of the big 4 international audit 

firms to audit our 2017 financial statements. 

The 2017 financial statements are the first we 

have prepared in accordance with International 

Financial Reporting Standards (IFRS). In 

preparing the 2017 financial statements 

together with the comparative 20161period data, 

Staatsolie’s opening statement financial position 

was prepared as per January 1, 2016, our date of 

transition to IFRS. Previously Staatsolie used US 

Generally Accepted Accounting Principles. 

In 2018 several improvements will be implemented 

to further strengthen our internal control 

1 

2017 2016 

x 1000 Bbls in M$ x 1000 Bbls in M$ 

Fuel Oil & Crude 3,221 183 4,249 162 

Diesel 1,986 152 1,416 123 

Gasoline 593 49 358 32 

Bitumen 24 2 36 2 

Total 5,824 386 6,059 319 

in MWh in M$ in MWh in M$ 

Electric Energy 30,478 48 26,896 39 

Total revenues in US$ 434 358 

In this improved context and considering the 

maturity of the 2015 syndicated bank loan 

in 2019, we refinanced and consolidated our 

outstanding debts, including the government 

loan, to improve the amortization profile and 

extend debt maturities. With the new bank loan, 

cash has been freed up for additional upstream 

investments. The refinancing also included the 

buyback of the 4.8% stake of the Government 

related to their financial contributions made 

in 2016 on Staatsolie’s behalf to the Limited 

Partnership Agreement with Newmont. 

We aim to maintain a healthy debt to EBITDA ratio 

of less than 2.5 and are preparing to diversify 

our funding sources through a capital market 

transaction planned for the first half of 2019. 

framework and finalizing our readiness to 

enter the international capital market. Over 

the next 3 years our capital investments will 

focus on sustaining production at 16,500 bopd, 

Enhanced/Improved Oil Recovery (EOR/IOR) 

and nearshore exploration. 

For 2018, capital expenditures (CAPEX) are 

forecasted to amount to US$ 216 million (2017: 

US$ 130 million) which includes US$ 112 million 

for nearshore exploration and EOR/IOR. The total 

estimated project budget for nearshore exploration 

is US$ 120 million. 

For 2019, we expect a CAPEX budget of around 

US$ 350 million including approximately US$ 140 

million for nearshore exploration and EOR/IOR.


Merian gold mine 

The Newmont Suriname operation currently 

includes the Merian 2 and the Maraba pit. 

Construction of the processing facility to 

process ore from Merian 2 began in August 

2014 and commercial production started in 

October 2016. The Maraba pit was added to the 

production stream during the first quarter of 

2018. Brownfield exploration and development 

for new reserves is ongoing. 

Merian’s gross property, plant and mine 

development at December 31, 2017 was US$ 786 

million. Merian produced 513 thousand ounces 

of gold in 2017 and the partnership reported 

5 million ounces of proven and probably gold 

reserves at December 31, 2017. Gold production 

in 2018 is projected at 511 thousand ounces as 

per the 2018 business plan. 

Operational performance 

Upstream 

Reserves 

At December 31, 2017, proven reserves stood 

at 86.7 million of stock tank barrels (MMSTB) 

compared to 84.2 MMSTB in 2016. Due to a 

number of step-out wells and appraisal wells, 

and the commitment to implement polymer 

flooding as a EOR technology, the proven 

reserves went up surpassing the goal of a 

Reserve Replacement Ratio of 1:1. 

Exploration 

To ensure that we can continue to meet production 

targets, our focus in 2017 was preparation for a 

renewed exploration drilling program in 2019. We 

also worked to improve our internal processes to 

fast-track the program. This included: 

• The installation of a project team to prepare 

for nearshore drilling in 2019. 

• Implementation of a clear process and a 

play based exploration workflow to deliver 

prospects in nearshore blocks A, B, C and D. 

• Presentation of a nearshore prospect 

portfolio, including economic assessments 

and a nearshore exploration venture plan. 

• Approval of the nearshore venture plan. 

• Adding additional personnel capacity to the 

exploration team. 

• Start exploration evaluation of the shallow 

offshore area together with the team from 

Petroleum Contracts. 

To support drilling target selection, nearshore 

seismic data was re-processed, with intermediate 

fast-tracked results received at year-end. We also 

improved our understanding of reservoir and seal 

qualities, and obtained additional data by using 

an external laboratory to further enhance our 

petrophysical model. 

In 2018, we plan to further improve the nearshore 

lead and prospect portfolio and venture plan, and 

work on the preparation for a drilling campaign of 10 

exploration wells in 2019. A prospect portfolio in the 

shallow offshore should be established by end 2018. 

Crude production 

Due to the downturn of the oil price, our drilling 

program was limited in 2016. This influenced 2017 

production, which declined from 17,000 bopd in 

2015 to 16,300 bopd in 2017. The overall production 

goal was to halt the decrease and sustain production 

at or above 16,300 bopd in 2017, as well as to lay the 

foundations for recovery to 17,000 bopd. 

In 2017, there was a 5-rig Development Drilling 

Program. However, because of lack of availability 

of the fifth rig due to construction delays, 115 

production wells were drilled against an initial 

target of 141. This is still a significant achievement. 

The average production of 16,300 bopd was 

achieved with close to 1,900 wells. To achieve 

this, 600 Staatsolie employees and more than 300 

contractors were safely involved across an area 

larger than 250 km 2 . With careful cost management, 

the average production cost per barrel was 

US$ 8.60, which again pleasingly placed us in the 

lowest cost quartile. 

In 2017, many improvement projects were 

initiated that will benefit the organization in the 

coming years targeting to sustain the production, 

bring down operational costs and reduce the risk 

to harm employees, the environment and the 

community we work in. 

A comprehensive study was carried out to detect 

bottlenecks in operational and processing systems. 

The recommendations from the study are being 

incorporated into our plan to improve the overall 

production process. 

The main focus in 2018 is a crude production of 

16,500 bopd average across the year. To guarantee 

production until 2024, when it is expected that 

1


16 

new oil will be produced from the nearshore, the 

focus in 2018 will be to find new reserves in areas 

close to the current fields using a combination of 

appraisal wells and seismic acquisition and/or 

processing. Our target areas are north of Calcutta, 

Tambaredjo, Uitkijk and in the Coppename 

Nature Reserve, the latter under the strictest 

of environmental safeguards and only after 

completion of the requisite Environmental and 

Social Impact Assessment studies. 

Additional upstream projects that are targeted for 

2018 include: 

• Preparation for a power plant to secure 

anticipated future power demands. 

• Construction of an EOR polymer flooding 

production facility. 

• A horizontal well pilot project. 

• A new waste treatment facility. 

Map of onshore oilfields. 

Another focus area in 2018 will be upgrading 

our reliability maintenance systems. We are 

undertaking this to ensure well and pipeline 

integrity, and to reduce environmental impacts to 

a minimum. 

In 2018, we also anticipate that a number of 

impactful engineering projects will be completed. 

These are being undertaken to ensure we maintain 

our production targets overall and meet enhanced 

environmental standards. In addition, by directing 

all the flow of the Calcutta field to the TA58 plant, 

when the header between the Calcutta field and the 

Tambaredjo Northwest field becomes operational, 

we will eliminate expensive barging costs. 

Institutional activities 

In 2017, we continued to promote Staatsolie’s 

offshore prospects, and succeeded in signing 2 new 

PSCs with leading international oil companies (IOCs) 

Hess, Exxon and Statoil. They share our view that 

our geography offers the significant promise of a 

world-class commercial discovery. In addition, with 

our re-launched Open-Door Invitation, we received 

4 bids and 2 companies were invited to commence 

discussions to agree a PSC for blocks 61 and 62.


PSCs as at year end 2017 (operators noted in red text). 

Offshore block progress and plans for 2018/2019: 

2017 activity Plans for 2018/2019 

Block 42 

Block 45 

Block 47 

Processing of 3D data acquired and 

evaluation ongoing. 

Upgraded prospect and got partner 

approval to enter the next phase of the 

exploration. 

Ratio farmed into block and has a 

participating interest of 20%. Tullow 

operator with remaining interest of 80%. 

Possible drilling of an exploration well in 

2018. 

Commitment to drill an exploration well in 

the second quarter of 2018. 

Tullow to secure an additional partner and 

enter second phase of exploration. 

Block 48 

Commenced 3D seismic in December 

2017. 

Data processing and farming down 

interest. 

Block 52 Post Roselle well evaluation ongoing. Plans subject to well evaluation results. 

Block 53 Kolibrie-1 well drilled in the first quarter. Prepare for drilling in 2019. 

Block 54 Araku well drilled in fourth quarter. Review and analyze results. 

Block 58 Processing of 3D data acquired in 2016 

and ongoing evaluation of block. 

Prepare for drilling in 2019. 

Block 60 2D seismic commenced in December. Seismic analysis.


18 

Downstream 

Refinery & Marketing Operations 

Production of high end fuel products enjoyed 

significant year-on-year improvement. In 2017, we 

began to reap the rewards of the significant work 

we undertook in 2016 and early 2017 to improve 

both our processes and people skills at the 

refinery. Higher reliability was realized by adding 

additional robustness to equipment to better cope 

with irregular power supply and replacing parts 

of the Pressure-Swing-Absorption control valves. 

Securing higher reliability and therefore higher 

availability led to higher utilization and production. 

Average availability across the year was 88% 

utilization against a target of 79% of the installed 

capacity for high end products. 

Early in 2017 we had a planned stop to replace the 

hydrogen unit catalytic converter. Subsequently, 

the emphasis in day-to-day operations was on 

increasing safety awareness, training staff and 

process optimization to reduce costs. In the last 

week of the year we also undertook a capacity test 

on the hydrocracker unit, with success in running 

the hydrocracker at 100% capacity for 72 hours 

while maintaining product quality. We will build on 

this successful test in 2018. 

Overall, our refinery teams’ efforts across 2016 

and 2017 resulted in the production of 2.7 MMbbls 

high-end products (diesel and gasoline), compared 

to 1.8 MMbbls in 2016. With the significant work we 

have undertaken to date and the improvements we 

have made in our processes, we remain confident 

we will reach our target of 10,500 bbls of high-end 

products a day by 2020. 

Total sales of petroleum products including trading 

and after elimination of intra company sales 

amounted to 5.82 MMbbls in 2017, a decrease 

of 1.2% compared to 2016. In 2017 54% more 

Staatsolie high-end products (gasoline and diesel) 

were sold compared to 2016, resulting in higher 

gross revenues. 

Total sales 


Diesel 1,985,878 1,416,296 

Gasoline 593,257 357,586 

Fuel Oil 3,221,224 4,249,380 

Asphalt 24,425 36,499 

Total 5,824,784 6,059,761 

A higher production of high-end products resulted 

in a lower fuel oil production. 


Across 2017 SPCS achieved 100% availability and 

reliability of electricity delivery to the Staatsolie 

refinery, there were no refinery outages as a result 

of electrical supply issues. 

SPCS delivered 335,056 MWh to the grid and 

90,500 MWh to the Staatsolie refinery at an 

average load of 10.3 MW and 26,042 tons of 

process steam (2016: 82,000 MWh of electrical 

energy and 37,165 tons of process steam). The 

low utilization of the process steam generating 

capacity is mainly due to the aforementioned 

engine breakdowns as these units are equipped 

with exhaust gas steam boilers. 

SPCS commissioned a reliability improvement 

program in October 2017, aimed at maintaining 

reliability of supply to the refinery and improving 

the availability of power to the national grid. To 

add additional robustness to our processes, SPCS 

is currently going through the ISO9001:2015 

certification process. The certification audit is 

scheduled for July 2018. 

Staatsolie is in the process of securing the power 

supply for upstream crude oil production. Plans are 

to build a 12 MW power plant at the upstream, which 

we anticipate will be accommodated within SPCS.

Drilling operations in the Tambaredjo Northwest oilfield. 



20 


For 2018, the target is to continue increasing 

market share by expanding our retail footprint, 

enhancing the GOw2 brand, and through consumer 

loyalty initiatives. 

As a more stable sourcing of products was realized, 

GOw2 focused on further increasing its sales and 

realized a 20% increase compared to 2016. Also 

with regards to the TOTAL lubricants that are sold 

investments were made to pursue and increase 

our market share in the future. 

Unleaded and diesel 

sales (bbls) 

Average unleaded 

sales/day (bbls) 

Average diesel sales/ 

day (bbls) 

GOw2 Performance 


911,007 760,240 

1,785 1,283 

1,252 1,251 

Ventrin Petroleum Company Ltd. 

Total sales of petroleum products amounted 

to 98,580 metric ton in 2017, a decrease of 

50% compared to 2016. To counter the fall 

back, Ventrin implemented strong cost cutting 

measures and changed their mode of operations, 

only selling from storage tanks and pipelines 

at Point Lisas. Previously, products were sold 

in the so called ‘ship-to-ship mode’ through a 

leased barge. From March 2018, the company is 

on the path to recovery. 

People, Community & Environment 

Our People 

In 2017, we continued our program to embed a 

culture of ownership, personal responsibility and 

cost management – along with seeing our core 

values enacted in both our resource planning 

and day-to-day activities. To add impetus and 

structure to our culture change program, we 

implemented a new bonus system linked to 

production and cash cost outcomes and to each 

asset’s KPIs. This directly links remuneration 

to our strategy. We also continued with our 

succession planning to ensure we have a strong 

pipeline of skilled personnel, including preparing 

our secondments program to IOCs. 

In 2018, our people activities will focus on amongst 

others: 

• The continuation of the roll-out of the Culture 

Change program. 

• The implementation of a new performance 

management system. 

• Improving the management of the Staatsolie 

pension fund. 

HSEQ 

The health and safety of our employees and 

contractors will always be at the core of all 

our plans and activities. To meet this goal, 

appropriate national and international industry 

standards and practices are implemented and 

projects are carried out in accordance with 

Health, Safety & Environmental (HSE) guidelines, 

rules and regulations. 

In 2017, we continued to strive for zero harm. To 

fulfill this mission, we worked on the development 

of an integrated HSEQ management framework, 

simplification of our procedures and processes, 

and focused on key areas to manage our risks. 

In 2018 we will start with the implementation of 

our integrated HSEQ management system, to 

better align our processes for both the better use 

of our limited resources and embed more efficient 

processes. Importantly, to ensure action, we 

will make our safety observation process ready 

to be introduced as a leading HSE KPI to our 

performance reward system. This leading indicator 

should help to ensure that our leadership team 

visits Staatsolie work places to regularly discuss 

safety with employees – an important step to 

embed a deep culture of mutual care. 

A key part of embedding our HSE messages is that 

each year we hold a number of HSE days. This year, 

9 were held across the organization. 

Health and safety of our contractors (around 800 

at the end of 2017), is equally important as that 

of our employees. In 2018, we will work to ensure 

consistency of approach with our procurement 

department, management and HSE teams with 

reference to Contractor Management. 

Our HSE performance improved slightly in 2017 

compared to 2016. The number of reported 

incidents dropped from 495 to 491, while the 

number of lost time injuries reduced from 8 to 2.


Injury statistics 2017 


Type of incident Staatsolie Contractors 

Fatality 0 0 

LTI 2 0 

Injuries 16 10 

Our Environment 

Oil extraction and processing has a certain 

impact on its surroundings. We are committed 

to minimizing these as much as possible 

and therefore we have adopted national and 

international accepted guidelines and standards. 

These standards apply to the planning, 

commissioning, operation and closing of projects. 

This year, the minimization of our environmental 

footprint was mainly done by implementing 

mitigation measures, in accordance with 

the Environmental Management Plans of the 

production development projects. In 2018, we 

will continue with this approach. 

In 2017, 2 compliance reports were submitted 

to NIMOS (National Institute for Environment 

and Development in Suriname) for the wetland 

operations and 2 others were submitted for the 

development drilling program of the Josiekreek 

and Farmersland area. 

Quality 

One internal and one external quality audit were 

executed in 2017. There were no major issues 

identified within our quality management system, 

we will continue with integrating it into our 

daily work. The external quality audit, executed 

by Lloyd’s Register confirmed that Staatsolie 

complies with the new ISO 9001:2015 standard. 

Our Community 

To exercise our corporate social responsibility it 

is essential that we have the continued support of 

our community and citizens. Over the past decade, 

we have contributed to a wide range of community 

projects across Suriname. This in addition to the 

direct, significant financial contributions we have 

made to the national economy, through payment 

of royalties, taxes, and salaries for direct and 

indirect employment, and through the many spinoff 

industries we have supported as well. 

Entering the next decade, we felt it was important 

to evolve our approach and to work closely with 

the communities most directly impacted by our 

activities. For this reason, in 2017 we changed our 

policy regarding corporate social investments, to 

focus mainly on sustainable development activities 

within the communities near which we operate. 

New projects which we will support will be explicitly 

based upon the needs and the involvement of the 

community itself. We will report on the progress of 

this change next year. 

In the upstream, in support of the local district’s 

authority, Staatsolie financed garbage collection 

in the Saramacca area for a full year, to partially 

continue in 2018. Also, preparatory work was done 

for major renovation of the public water utilities 

plant at Tijgerkreek set to take place in 2018. 

Near our refinery, the renovation of four schools 

was initiated and will see its completion early 

in 2018, as well as a playground for children in 

the neighborhood. A program for scholarships 

for students at different educational levels was 

initiated. Staatsolie also co-financed the first printrun 

of a newly written textbook on geology, aimed at 

the secondary level students. 

The Staatsolie Foundation for Community 

Development supported partial renovation or 

expansion of facilities at ten schools country-wide, 

the building of a health clinic in a Maroon village in 

the interior, and a nationwide campaign to launch 

a children’s telephone helpline. At a boarding 

school in one of the districts the renovation of the 

caretaker’s quarters, and a multifunctional activities 

room for the children, were also completed in 2017. 

And along the main public road leading to our 

Saramacca production area, we repaired 7 culverts, 

aimed at improving water management in the area 

and preventing damage to the road. 

Stakeholder Engagement 

In the last quarter of 2017, we engaged actively with 

the stakeholders in the upstream to gather input 

for our social investments program. A plan was 

implemented to educate the community about the 

care that is required around our Saramacca to Tout 

Lui Faut high-pressure pipeline.


22

An operator doing maintenance on a pump in a unit of the Staatsolie refinery. 



24 

In the refinery area, our newly established 

Neighborhood Council met a number of times and 

conducted two stakeholder activities. A formal 

stakeholder meeting was held at the start of the 

Environmental and Social Impact Study for the 

nearshore exploration activities planned for 2018. 

That was also the case in preparation for the 

drilling of the Araku offshore well. We regularly met 

with the Districts Commissioners to discuss local 

issues and how Staatsolie could help. Complaints 

received were handled through our complaints 

management process. 

In 2018, we will further develop our Corporate 

Social Responsibility policies, implement 

stakeholder engagement guidelines, and continue 

to focus on social investment initiatives.


Independent 

Auditor’s Report 

to the shareholder of Staatsolie maatschappij Suriname n.v. 

Report on the Audit of the Consolidated 

Financial Statements 

Opinion 

We have audited the consolidated financial 

statements of Staatsolie Maatschappij Suriname 

N.V. (“the Group”), which comprise the 

consolidated statement of financial position as 

at 31 December 2017 and 2016 the consolidated 

statement of profit or loss, the consolidated 

statement of other comprehensive income, 

consolidated statement of changes in equity and 

consolidated statement of cash flows for the 

years then ended, and notes to the consolidated 

financial statements, including a summary of 

significant accounting policies. 

In our opinion, the accompanying consolidated 

financial statements present fairly, in all material 

respects, the financial position of the Group as 

at 31 December 2017 and 2016 and its financial 

performance and its cash flows for the years then 

ended in accordance with International Financial 

Reporting Standards (“IFRSs”). 

Basis for Opinion 

We conducted our audit in accordance with 

International Standards on Auditing (“ISAs”). Our 

responsibilities under those standards are further 

described in the Auditor’s Responsibilities for the 

Audit of the Consolidated Financial Statements 

section of our report. We are independent of the 

Group in accordance with the International Ethics 

Standards Board for Accountants’ Code of Ethics 

for Professional Accountants (“IESBA Code”), and 

we have fulfilled our other ethical responsibilities in 

accordance with the IESBA Code. We believe that 

the audit evidence we have obtained is sufficient 

and appropriate to provide a basis for our opinion. 

Other Matter paragraph 

The consolidated financial statements of the 

Group for the year ended 31 December 2015 was 

prepared, in accordance with Generally Accepted 

Accounting Principles in the United States 

(“USGAAP”) were audited by another auditor 

who expressed an unmodified opinion on those 

statements on 30 May 2016. As part of our audit 

of these consolidated financial statements, we 

also reviewed the adjustments described in Note 

2.4 that were applied to amend the 2015 financial 

statements. In our opinion, such adjustments are 

appropriate and have been properly applied. We 

were not engaged to audit, review, or apply any 

procedures to the 2015 consolidated financial 

statements of the Group other than with respect 

to the above-mentioned adjustments and, 

accordingly, we do not express an opinion or any 

other form of assurance on the 2015 consolidated 

financial statements taken as a whole. 

Key audit matters 

Key audit matters are those matters that, in our 

professional judgment, were of most significance in 

the audit of the consolidated financial statements 

of 2017 and 2016. These matters were addressed 

in the context of the audit of the consolidated 

financial statements as a whole, and in forming the 

auditor’s opinion thereon, and we do not provide 

a separate opinion on these matters. For each 

matter below, our description of how our audit 

addressed the matter is provided in that context.


26 

Report on the Audit of the Consolidated Financial Statements 

(Continued) 


(Continued) 

We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the 

consolidated financial statements section of our report, including in relation to these matters. 

Key audit matter 

How our audit addressed the key audit matter 

Initial audit engagement - Transition plan 

Initial audits include a number of elements which 

are not performed in recurrent audits conducted 

on a regular basis. These additional procedures 

include in particular planning activities which 

are intended to enable an appropriate audit 

strategy to be determined for the consolidated 

financial statements. 

The consolidated financial statements of the 

Group for the year ended 31 December 2015 

was prepared, in accordance USGAAP, and 

were audited by another auditor who expressed 

an unmodified opinion on those statements. 

This has been discussed in the Other Matter 

paragraph above. 

After being appointed as the Group’s auditors in 

2018, we developed a comprehensive transition 

plan to ensure an effective transition from the 

predecessor auditor. In order to develop an 

appropriate audit strategy and audit plan in the 

initial audit engagement for the Group, specific 

planning activities were necessary. These 

included, but were not limited, to: 

• Obtaining an initial understanding of 

the Group and its business including 

background information, strategy, business 

risks, information technology landscape 

and its financial reporting and internal 

controls framework, to assist in performing 

risk assessment procedures; 

• Obtaining sufficient appropriate audit 

evidence regarding opening balances and 

the appropriate selection and consistent 

application of accounting policies; and 

• Communicating with the predecessor 

auditor, including reviews of audit 

working papers for previous periods; 

and performance of analyses in order 

to evaluate the assumptions made by 

management in the previous financial year. 

The foregoing has been used as a basis for our 

audit plan. We discussed and agreed our audit 

plan with the Supervisory Board of the Group 

in 2018 and have reported status updates, 

progress reports and key findings from our audit 

process on a regular basis.



(Continued) 


(Continued) 



First time adoption of International Financial 

Reporting Standards (IFRSs) 

Effective 1 January 2016 the Group adopted 

IFRSs and converted from USGAAP. This 

involved a detailed IFRS conversion exercise to 

identify all significant and material differences in 

the accounting policies previously applied under 

USGAAP to that required in accordance with 

IFRS. This exercise resulted in the identification 

of several differences and required adjustments 

to be recorded to facilitate the conversion to 

IFRSs. These differences and the related impact 

are disclosed in Note 2.4 to the consolidated 

financial statements. 

Our procedures focused on assessing the 

completeness and robustness of the conversion 

exercise and included the following: 

• Obtained the IFRS to USGAAP differences 

checklist and evaluated the differences as 

it related to Group to assess whether all 

differences were properly identified and 

complete; 

• We evaluated that where differences were 

identified that the appropriate accounting 

policy was applied; 

• We audited the USGAAP to IFRS 

adjustments to determine if reasonable 

and appropriate; and 

• We evaluated whether the Group 

appropriately applied the IFRS 1 first time 

adoption exemptions and the related 

disclosures in the consolidated financial 

statements.


28 


(Continued) 


(Continued) 



Estimation of decommissioning and 

restoration provisions 

Provisions associated with decommissioning 

and restoration are disclosed in Note 4.7 to the 

consolidated financial statements; a description 

of the accounting policy and key judgements 

and estimates is included in Note 2.5. 

The calculation of decommissioning and 

restoration provisions is conducted by 

specialist engineers and requires the use of 

significant judgement in the application of 

key assumptions in respect of asset lives, 

timing of restoration work being undertaken, 

environmental legislative requirements, the 

extent of restoration activities required and 

estimation of future costs. Changes in these 

assumptions may result in material changes to 

the decommissioning and restoration provisions 

recorded by the Group. 

Our audit procedures focused on the work of the 

consolidated entity’s experts. 

In obtaining sufficient audit evidence, we: 

• assessed the competence and objectivity 

of both the Group’s internal and external 

experts involved in the estimation process; 

• assessed the reasonableness of the 

assumptions and ensured it was consistent 

with our knowledge of the Group and 

industry; 

• evaluated the adequacy of the expert’s 

work; 

• understood the Group’s decommissioning 

and restoration estimation processes; 

• tested the consistency in the application of 

principles and assumptions to other areas 

of the audit such as reserves estimation 

and impairment testing; 

• tested the mathematical accuracy of the 

net present value calculations and discount 

rate applied; and 

• reconciled the calculations to the financial 

report prepared by internal and external 

experts.



(Continued) 


(Continued) 



Risk of Impairment of the group’s assets 

The significant decline in oil and gas prices has 

the potential for a material impact on the carrying 

value of the group’s assets as presented in the 

consolidated statement of financial position. 

The recoverability of the carrying amount of 

Upstream and Downstream assets is dependent 

upon the future cash flows of the business. 

Bearing in mind the generally long-lived nature 

of its assets, the most critical assumption in the 

impairment analysis is management’s view on 

the long-term oil and gas price outlook, beyond 

the next three to five years. 

With reference to IAS 36: Impairment of assets, 

we first considered the appropriateness of 

management’s defined cash-generating units 

(CGUs) within the Upstream and Downstream 

business. We assessed management’s macroeconomic 

assumptions, which include both 

short-term and long-term views on commodity 

prices, inflation rates and discount rates. 

IAS 36, requires impairment reviews to be 

performed only for those CGU’s where indicators 

of impairment exist. For those CGU’s where 

impairment indicators were identified our audit 

procedures were designed to evaluate whether 

the impairment test model used by the Group 

met the requirements of IAS 36. For those assets 

expected to be retained in the portfolio, we : 

• assessed the reasonableness of the key 

assumptions relating to the ongoing 

operation of the asset, including price, cost 

and reserves data; 

• engaged the services of the EY Transactions 

Advisory Services (TAS) team to assist 

in our assessment and audit of the key 

assumptions and the impairment model; 

and 

• confirmed the mathematical accuracy 

of the value-in-use model prepared by 

management, and agreed the reserves 

incorporated into the model to the 

estimates prepared by the engineers


30 


(Continued) 


(Continued) 



Valuation of obligation in respect of defined 

benefit plans 

We identified the valuation of obligation in 

respect of defined benefit plans as a key audit 

matter because of the significant management 

judgement and actuarial expert involved in 

valuation. 

As set out in Notes 2.5 and 4.8 to the 

consolidated financial statements, in 

determining the obligation in respect of defined 

benefit plans, the Group engaged an actuarial 

expert to perform the actuarial valuation of plan 

assets and the present value of the defined 

benefit obligations, and the key assumptions 

used including discount rates, expected return 

on plan assets, expected salary increases and 

mortality rates. 

As set out in note 4.8 to the consolidated 

financial statements, the Group’s obligation 

in respect of the defined benefit plans as at 

December 31, 2016 and December 31, 2017 

amounted to US$65.07 million and US$42.75 

million respectively. 

Our procedures in relation to the assessing the 

valuation of obligation in respect of defined 

benefit plans included: 

• Understanding the management valuation 

process, including the involvement of 

actuarial expert in performing the actuarial 

valuation of plan assets and the present 

value of the defined benefit obligations; 

• Evaluating the competence, capabilities 

and objectivity of the management 

actuarial expert; 

• Evaluating the appropriateness of the 

valuation method and key assumptions as 

disclosed in Note 4.8 used to determine 

the valuation of obligation in respect of 

defined benefit plans and compliance with 

IAS 19: Employee Benefits.; 

• Working with EY actuarial expert to evaluate 

the reasonableness of the discount rate 

used by management; 

• Evaluating the reasonableness of the 

expected return on plan assets by checking 

the historical performance on plan assets 

and available market and economic data; 

• Assessing whether the relevant disclosures 

in the consolidated financial statements 

are consistent with the requirements of IAS 

19; and 

• For pension assets we obtained an 

independent report from the plan’s auditors 

confirming the reasonableness of the fair 

value of the assets used in the computation 

of the net pension liability.




(Continued) 

Other information included in the Group’s 

2017 Annual Report 

Other information consists of the information 

included in the Group’s 2017 Annual Report, 

other than the consolidated financial statements 

and our auditor’s report thereon. Management 

is responsible for the other information. The 

Group’s 2017 Annual Report is expected to be 

made available to us after the date of this auditor’s 

report. 

Our opinion on the consolidated financial 

statements does not cover the other information 

and we will not express any form of assurance 

conclusion thereon. 

In connection with our audit of the consolidated 

financial statements, our responsibility is to read 

the other information identified above when it 

becomes available and, in doing so, consider 

whether the other information is materially 

inconsistent with the consolidated financial 

statements or our knowledge obtained in the audit 

or otherwise appears to be materially misstated. 

Responsibilities of Management and 

Supervisory Board for the Consolidated 


Management is responsible for the preparation 

and fair presentation of the consolidated financial 

statements in accordance with IFRSs, and for 

such internal control as management determines 

is necessary to enable the preparation of the 

consolidated financial statements that are free 

from material misstatement, whether due to fraud 

or error. 

In preparing the consolidated financial statements, 

management is responsible for assessing the 

Group’s ability to continue as a going concern, 

disclosing, as applicable, matters related to going 

concern and using the going concern basis of 

accounting unless management either intends to 

liquidate the Group or to cease operations, or has 

no realistic alternative but to do so. 

The Supervisory Board is responsible for overseeing 

the Group’s financial reporting process.


32 



(Continued) 

Auditor’s Responsibilities for the Audit of 

the Consolidated Financial Statements 

Our objectives are to obtain reasonable assurance 

about whether the consolidated financial 

statements as a whole are free from material 

misstatement, whether due to fraud or error, and 

to issue an auditor’s report that includes our 

opinion. Reasonable assurance is a high level of 

assurance, but is not a guarantee that an audit 

conducted in accordance with ISAs will always 

detect a material misstatement when it exists. 

Misstatements can arise from fraud or error and 

are considered material if, individually or in the 

aggregate, they could reasonably be expected to 

influence the economic decisions of users taken 

on the basis of these financial statements. 

As part of an audit in accordance with ISAs, we 

exercise professional judgment and maintain 

professional skepticism throughout the audit. We 

also: 

• Identify and assess the risks of material 

misstatement of the consolidated financial 

statements, whether due to fraud or error, 

design and perform audit procedures 

responsive to those risks, and obtain audit 

evidence that is sufficient and appropriate to 

provide a basis for our opinion. The risk of not 

detecting a material misstatement resulting 

from fraud is higher than for one resulting from 

error, as fraud may involve collusion, forgery, 

intentional omissions, misrepresentations, or 

the override of internal control. 

• Obtain an understanding of internal control 

relevant to the audit 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. 

• Evaluate the appropriateness of accounting 

policies used and the reasonableness of 

accounting estimates and related disclosures 

made by management. 

• Conclude on the appropriateness of 

management’s use of the going concern basis 

of accounting and based on the audit evidence 

obtained, whether a material uncertainty 

exists related to events or conditions that 

may cast significant doubt on the Group’s 

ability to continue as a going concern. If we 

conclude that a material uncertainty exists, 

we are required to draw attention in our 

auditor’s report to the related disclosures in 

the consolidated financial statements or, if 

such disclosures are inadequate, to modify 

our opinion. Our conclusions are based on the 

audit evidence obtained up to the date of our 

auditor’s report. However, future events or 

conditions may cause the Group to cease to 

continue as a going concern. 

• Evaluate the overall presentation, structure 

and content of the consolidated financial 

statements, including the disclosures, and 

whether the consolidated financial statements 

represent the underlying transactions 

and events in a manner that achieves fair 

presentation. 

• Obtain sufficient appropriate audit evidence 

regarding the financial information of the 

entities or business activities within the Group 

to express an opinion on the consolidated 

financial statements. We are responsible for 

the direction, supervision and performance of 

the group audit. We remain solely responsible 

for our audit opinion.




(Continued) 

Auditor’s Responsibilities for the Audit of 

the Consolidated Financial Statements 

(Continued) 

We communicate with the Supervisory Board 

regarding, among other matters, the planned 

scope and timing of the audit and significant audit 

findings, including any significant deficiencies in 

internal control that we identify during our audit. 

We also provide the Supervisory Board with a 

statement that we have complied with relevant 

ethical requirements regarding independence, and 

to communicate with them all relationships and 

other matters that may reasonably be thought to 

bear on our independence, and where applicable, 

related safeguards. 

From the matters communicated with the 

Supervisory Board, we determine those matters 

that were of most significance in the audit of the 

consolidated financial statements of 2017 and 

2016 and are therefore the key audit matters. 

We describe these matters in our auditor’s 

report unless law or regulation precludes public 

disclosure about the matter or when, in extremely 

rare circumstances, we determine that a matter 

should not be communicated in our report 

because the adverse consequences of doing so 

would reasonably be expected to outweigh the 

public interest benefits of such communication. 

The engagement partner in charge of the audit 

resulting in this independent auditor’s report is 

Andrew Tom. 

Port of Spain 

TRINIDAD: 

16 November 2018


34

Drilling rig in the Tambaredjo oilfield. 



36 


Consolidated statement of profit or loss 

for the year ended December 31, 2017 and 2016 

(x Us$ 1,000) Notes 2017 2016 

Revenue 3.1 433,678 357,705 

Cost of sales (247,229) (251,247) 

Gross profit 186,449 106,458 

Other income/(expense) 3.2 (23,637) 13,457 

Expensed projects (3,205) (2,359) 

Exploration expenses (3,192) (6,507) 

Selling and distribution expenses 3.2 (19,925) (24,977) 

Other operating expenses (12,019) (11,643) 

General and administrative expenses 3.2 (27,167) (31,467) 

Operating profit 97,304 42,962 

Finance income 3.2 2,018 4,840 

Finance costs 3.2 (68,777) (65,122) 

Share of profit of Suriname Gold Project JV 4.4 63,725 8,114 

Profit (loss) before income tax 94,270 (9,206) 

Income tax expense 3.3 (33,119) 1,609 

Profit (loss) for the year 61,151 (7,597) 

Attributable to: 

Equity holders of the parent 61,151 (7,597) 

61,151 (7,597) 

Basic and diluted earnings/(loss) per ordinary 

Share (US$ per thousand shares) 3.4 12.23 (1.52)



Consolidated statement of other comprehensive income 



Profit (loss) for the year 61,151 (7,597) 

Other comprehensive income (loss) not to be reclassified to profit or loss in 

subsequent periods 

Pensions and other postretirment benefits 4.8 25, 623 (9,107) 

Tax effect 3.3 (8,255) 3,137 

17,368 (5,970) 

Net other comprehensive income (loss) not to be reclassified to profit or loss in 


17,368 (5,970) 

Other comprehensive income (loss) to be reclassified tot profit or loss in 


Unrealized (gains) and losses short-term investments 42 (3,113) 

Tax effect 3.3 (14) 1,009 

28 (2,104) 

Currency translation adjustment GOw2 (920) (15,306) 

Tax effect - - 

(920) (15,306) 

Net other comprehensive income (loss) to be reclassified to profit or loss in 


(892) (17,410) 

Other comprehensive income (loss) for the year net of tax 16,476 (23,380) 

Total comprehensive income (loss) for the year, net of tax 77,627 (30,977)


38 


Consolidated statement of financial position 

as at December 31, 2017 and 2016 

(x Us$ 1,000) Notes 2017 2016 As at January 1, 2016 

Assets 

Non-current assets 

Oil, exploration and producing properties 4.1 512,520 444,335 482,760 

Refining properties 4.2 966,130 1,004,313 1,056,292 

Other property, plant and equipment 4.3 142,301 149,227 186,656 

Goodwill 4.5 5,447 5,447 5,447 

Other intangible assets 4.5 6,024 8,841 11,658 

Investments in Joint Ventures 4.4 277,306 285,306 217,385 

Loan receivable long term 5.3 11,007 14,677 - 

Restricted cash 6.1 16,851 11,850 14,412 

Deferred tax asset 3.3 7,315 16,497 - 

Total non-current assets 1,944,901 1,940,493 1,974,610 

Current assets 

Inventories 6.3 62,224 65,869 72,389 

Trade receivables 6.2 107,248 101,878 118,319 

Prepayment and other current assets 6.2 27,175 44,472 43,304 

Loan receivable short- term 5.3 8,368 9,173 805 

Short-term investments 5.3 3,838 3,797 6,910 

Resticted cash 6.1 10,611 7,370 6,444 

Cash and short-term deposits 6.1 46,521 17,371 30,632 

Total current assets 265,985 249,930 278,803 

Total Assets 2,210,886 2,190,423 2,253,413 

Equity and liabilities 

Equity 

Common Stock 5.1 12,104 12,104 12,104 

Retained earnings 1,145,993 1,077,277 1,118,088 

Other capital reserves 5.1 11,566 11,116 11,360 

Total equity 1,169,663 1,100,497 1,141,552 

Non-current liabilities 

Bond 5.3 98,668 98,475 98,281 

Term loans 5.3 500,840 591,646 623,191 

Provisions 4.7 93,054 48,287 79,120 

Employee defined benefit liabilities 4.8 42,752 65,069 53,715 

Defered tax liabilities 3.3 - - 6,928 

Other long term liabilities 3,862 1,462 6,365 

Total non-current liabilities 739,176 804,939 867,600 

Current liabilities 

Bank overdraft 6.1 3,713 3.713 2,560 

Trade payables 6.4 90,570 96,618 110,350 

Provisions (short-term) 4.7 - 1,600 - 

Accruals and other liabilities 6.4 97,525 93,280 62,277 

Income tax payable 4,878 20,745 4,273 

Short-term portion of loans 5.3 105,361 69,031 64,801 

Total current liabilities 302,047 284,987 244,261 

Total liabilities 1,041,223 1,089,926 1,111,861 

Total equity and Liabilities 2,210,886 2,190,423 2,253,413


Consolidated statement of financial position as at December 31, 2017 and 2016. (continued) 

These accounts have been authorized for issuance by the Supervisory Board members and the Executive Board members on 

November 16, 2018. 

The Board of Executive Directors: 

The Supervisory Board: 

R. Elias Managing Director E. Boerenveen Chairman 

B. Dwarkasing Upstream Director G. Asadang Member 

A. Moensi‐Sokowikromo Finance Director E. Poetisi Member 

M. Rommy Member


40 


Consolidated statement of changes in equity 


(x Us$ 1,000) Notes Retained earnings Other capital reserves 

Appro- 

Common 

stock 

Retained 

earnings 

Translation 

adjustment 

GOw2 

Appropriated 

reserve 

for environmental 

risk 

priated 

reserve for 

committee 

of sports 

facilities 

Total equity 

Balance at January 1, 2016 12,104 1,118,088 - 8,000 3,360 1,141,552 

Loss for the year - (7,597) - - - (7,597) 

Other comprehensive loss - (8,074) (15,306) - - (23,380) 

Total comphrensive income/(loss) 2016 - (15,671) (15,306) - - (30,977) 

Dividend paid 3.5 - (7,228) - - - (7,228) 

Hyper Inflation GOw2 - 755 - - - 755 

Allocation/(withdrawal) - (500) - 500 (744) (744) 

Other reserves - (2,861) - - - (2,861) 

Balance at December 31, 2016 12,104 1,092,583 (15,306) 8,500 2,616 1,100,497 

Balance at January 1, 2017 12,104 1,092,583 (15,306) 8,500 2,616 1,100,497 

Profit for the year - 61,151 - - - 61,151 

Other comprehensive income - 17,396 (920) - - 16,476 

Total comphrensive income/(loss) 2017 - 78,547 (920) - - 77,627 

Hyper Inflation GOw2 - 200 - - - 200 

Allocation/(withdrawal) - (500) - 500 (50) (50) 

Other allocation/(withdrawal) 5.1 - (8,611) - - - (8,611) 

Balance at December 31, 2017 12,104 1,162,219 (16,226) 9,000 2,566 1,169,663



Consolidated statement of cash flows 



Operating activities 

Profit/(loss) before income tax from operations 3.1 94,270 (9,206) 

Adjustments to reconcile profit before tax to net cash flows: 

Depreciation of PP&E 3.2 93,299 95,628 

Expensed projects 4,820 7,485 

Amortization of intangible assets 4.5 2,817 2,817 

Amortized debt arrangement fee 194 194 

Accretion expense 4.7 4,697 6,067 

Hyperinflation and currency translation adjustment (720) (14,551) 

Loss on disposal of PP&E 19 618 

Finance income 3.2 (959) (3,461) 

Finance costs (excluding accretion expenses) 64,080 59,094 

Before tax Share of profit in Suriname Gold Project JV 4.4 (63,725) (8,114) 

Movements employee defined benefit liabilities 3,306 2,247 

Cash from operations before working capital changes 202,098 138,818 

Working capital adjustments: 

Decrease in Inventories 3,645 6,521 

(Increase)/decrease in trade receivables (25,370) 16,441 

Decrease/(increase) in prepayments and other current assets 21,147 (5,930) 

Drecrease in Trade payables (6,048) (13,732) 

Increase in accruals and other liabilities 4,137 20,252 

Cash generated from operations 199,609 162,370 

Interest received 2,018 4,840 

Interest paid (56,880) (49,623) 

Income taxes paid (41,592) (676) 

Net cash flows from operating activities 103,155 116,911 

Investing activities 

Expenditures on PP&E (Purchase) (82,745) (37,969) 

Cash distributions received from Suriname Gold Project JV 171,878 21,107 

Cash calls paid to Suriname Gold Project JV (100,153) (80,914) 

Movement of loan receivables 4,474 3,766 

Net cash flows used in investing activities (6,546) (94,010) 

Financing activities 

Repayment of term loans (59,118) (30,979) 

Dividends paid to equity holders of the parent 3.5 - (7,228) 

Payments to the Sports fund (50) (744) 

Movement in restricted cash (8,291) 1,636 

Net cash flows used in financing activities (67,459) (37,315) 

Increase/(decrease) in cash 29,150 (14,414) 

Cash and cash equivalents, beginning of year* 6.1 13,658 28,072 

Cash and cash equivalents, end of year* 6.1 42,808 13,658 

Significant non-cash transactions 

Refer to note 5.3 loan receivable section 

* Includes bank overdrafts; refer to footnote 6.1


42

Exploration drilling in offshore Suriname. 



Notes to the Consolidated financial statements


Index to notes to the Consolidated financial statements 

Section 1. Corporate and group information .............................................................................. 47 

1.1. Corporate information .................................................................................................. 47 

1.2. Group information ........................................................................................................ 48 

Section 2. Basis of preparation and other significant accounting policies .................................. 49 

2.1 Basis of preparation ..................................................................................................... 49 

2.2 Basis of consolidation .................................................................................................. 49 

2.3 Summary of significant accounting policies ................................................................. 50 

2.4 Restatements and First-time adoption of IFRS ............................................................ 66 

2.5 Significant accounting judgments, estimates and assumptions ................................... 82 

2.5.1 Changes in accounting policies and disclosures .......................................................... 89 

Section 3. Results for the year ................................................................................................... 91 

3.1 Segment information .................................................................................................... 91 

3.2 Information about key items comprising operating profit/loss ........................................ 96 

3.3 Income tax ................................................................................................................. 100 

3.4 Earnings per share ..................................................................................................... 102 

3.5 Dividends paid and proposed .................................................................................... 102 

Section 4. Invested capital ....................................................................................................... 103 

4.1 Oil, exploration and producing properties .................................................................. 103 

4.2 Refining properties ..................................................................................................... 104 

4.3 Other property, plant and equipment ......................................................................... 105 

4.4 Capital Investment in joint venture ............................................................................. 106 

4.5 Goodwill and other intangible assets ......................................................................... 108 

4.6 Impairment testing of other non-current assets ......................................................... 110 

4.7 Provisions................................................................................................................... 111 

4.8 Employee defined benefit liabilities ............................................................................ 113 

4.9 Capital commitments and other contingencies .......................................................... 130 

Section 5. Capital and debt structure ....................................................................................... 132 

5.1 Issued capital and reserves ....................................................................................... 132 

5.2 Capital management .................................................................................................. 133 

5.3 Financial instruments ................................................................................................. 133 

Section 6. Working capital ........................................................................................................ 141 

6.1 Cash and short–term deposits ................................................................................... 141 

Page 45


6.2 Trade and other receivables ...................................................................................... 142 

6.3 Inventories ................................................................................................................. 143 

6.4 Trade payables, accruals and other liabilities ............................................................ 144 

Section 7. Group information and related party disclosures ..................................................... 145 

Section 8. Other ....................................................................................................................... 148 

8.1 Events after the reporting period ................................................................................ 148 

8.2 Standards issued but not yet effective ....................................................................... 148 

Page 46





(continued) 


(continued) 


Section 1. Corporate and group information 



1.1. Corporate information 


The consolidated financial statements of the Group, which comprise Staatsolie Maatschappij Suriname 


NV (Staatsolie, as the parent) and all its subsidiaries, for the year ended December 31, 2017, were 


authorized for issue in accordance with a resolution of the Supervisory Board on November 14, 2018. 

The Staatsolie net realizable is a limited value company of crude incorporated oil and refined and products domiciled is in based Suriname on the whose estimated shares selling are solely price owned in the 

ordinary by the Government course of business, of Suriname less the (GoS). estimated The registered costs of completion office is located and the at estimated Dr. Ir. H. costs S. Adhinstraat necessary 21, to 

make Paramaribo, the sale. Suriname 

Materials Staatsolie and (the supplies Company) are valued is an using integrated the weighted oil company average in cost the method. Republic of Suriname of which the 

integrated activities include exploration, production, refining, marketing and distribution of petroleum and 

Pipeline retail products. fill 

Crude Through oil, its which subsidiary is necessary (SPCS), to Staatsolie bring a is pipeline engaged into in working electric power order, generation. is treated as a part of the related 


Group’s parent and other related party relationships is presented in section 7- Group information and 


related party disclosures. 


Staatsolie’s vision is: 


• Leading the sustainable development of Suriname’s energy industry. 


• Making a strong contribution to the advancement of our society. 

• Becoming a regional player with a global identity in the energy sector. 


Staatsolie’s mission is: 


• To develop Suriname's hydrocarbon potential over the full value chain, to generate electricity and 


to develop renewable sustainable energy resources. 


• To secure the energy supply of Suriname and to establish a solid position in the regional market. 


• To expand our reputation based on our growth performance, flexibility and corporate social 


responsibility. 


Its values are: 


1. HSEC Focused: We put health and safety first, strive for zero harm to our people and the 



communities around us, and minimize negative impacts upon the environment. 

2. Integrity: We are honest and do what we say we will do. 


3. People Focused: We create a supportive and collaborative environment, respect each other, are 


open to other's ideas and facilitate personal and professional growth. 


4. Excellence: We set high standards for quality, strive to exceed expectations and do our work with 


a sense of urgency. 


5. Accountability: We accept responsibility for our job and actions, are cooperative, and create a 


non-blaming environment. 

Page 63


48 




(continued) 


(continued) 

Available-for-sale (AFS) financial investments 

1.2. Group information 

AFS financial investments include equity and debt securities. Equity investments classified as availablefor-sale 

are those neither classified as held-for-trading nor designated at fair value through profit or loss. 

Staatsolie has four (4) subsidiaries of which three (3) are wholly owned: Paradise Oil Company N.V. 

(POC) and GOw2 Energy Suriname N.V. (GOw2) incorporated in the Republic of Suriname and Ventrin 

After initial measurement, AFS financial investments are subsequently measured at fair value with 

Petroleum Company Limited (Ventrin), a bunkering company incorporated in the Republic of Trinidad and 

unrealized gains or losses recognized as OCI until the investment is derecognized, at which time, the 

Tobago. 

cumulative gain or loss is recognized in other operating income or expense, or the investment is 

determined Staatsolie holds to be 102,999 impaired, out at of which 103,000 time, shares the cumulative of the Staatsolie loss is reclassified Power Company to the Suriname consolidated N.V. statement (SPCS), 

of incorporated profit loss in in the finance Republic costs of Suriname, and removed and from the local the OCI. electricity The Group company evaluates N.V. EBS its AFS holds financial one share. assets 

to determine whether the ability and intention to sell them in the near term is still appropriate. 

POC is, at the moment, a dormant company. In June 2015, POC’s operations were put on hold and the 

company did not have any major activity during the reporting period of 2017. 

(ii) Financial liabilities 

Furthermore, since November 2014, to date, Staatsolie has a participating interest of 25% in the 

Recognition and measurement 

Suriname Gold Project CV ('Surgold'), a limited partnership created between Newmont Suriname LLC 

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or 

and Staatsolie. 

loss, loans and borrowings, payables, as appropriate. All financial liabilities are recognized initially at fair 

Information on other related party relationships of Staatsolie and its subsidiaries is further provided in 

value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs. 

section 7. 

The Group’s financial liabilities include trade and other payables, loans and borrowings including bank 

overdrafts. 

Loans and borrowings 

This is the category most relevant to the Group. After initial recognition, interest bearing loans and 

borrowings are subsequently measured at amortized cost using the EIR method. Gains and losses are 

recognized in the consolidated statement of profit or loss when the liabilities are derecognized as well as 

through the EIR amortization process. Amortized cost is calculated by taking into account any discount or 

premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is 

included in finance costs in the consolidated statement of profit or loss. This category generally applies to 

interest-bearing loans and borrowings. 

m. Inventories 

Petroleum products are valued at the lower of cost and net realizable value. 

Raw materials: 

• Purchase cost is valued on weighted average method 

Finished goods and work in progress: 

• Cost of direct materials and labor and a proportion of manufacturing overheads based on normal 

operating capacity but excluding borrowing costs 

Page 62 

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(continued) 


(continued) 


Section 2. Basis of preparation and other significant accounting policies 



2.1 Basis of preparation 


appropriate 

The consolidated 

proportion 

financial 

of depreciation, 

statements of 

depletion 

Staatsolie 

and 

as a 

amortization 

group have 

and 

been 

overheads 

prepared in 

based 

accordance 

on normal 

with 

operating 

International 

capacity, 

Financial 

determined 

Reporting 

on 

Standards 

a weighted 

(IFRS) 

average 

as 

basis. 

issued by the International Accounting Standards 

Board (IASB). 


ordinary 

The consolidated 

course of 

financial 

business, 

statements 

less the estimated 

have been 

costs 

prepared 

of completion 

on a historical 

and the 

cost 

estimated 

basis, except 

costs necessary 

for financial 

to 

make 

instruments 

the sale. 

that have been measured at fair value. The consolidated statements are presented in US 

dollars, and all values are rounded to the nearest thousand (US$ thousand), except when otherwise 


indicated. 

Pipeline fill 

2.2 Basis of consolidation 


The consolidated financial statements comprise the financial statements of Staatsolie and its controlled 


subsidiaries as at December 31, 2017 and 2016. 


recouped Control is achieved through sale when (or the is Group significantly is exposed, impaired). or has This rights, applies to variable even returns if the part from of its inventory involvement that with is 

deemed the investee to be and has item the of property, ability to affect plant and those equipment returns through cannot its be power separated over physically the investee. from Specifically, the rest of 

inventory. the Group It controls is valued an at investee cost and if, is and depreciated only if, the over Group the has useful all of life the of following: the related asset. 

• Power over the investee (i.e., existing rights that give it the current ability to direct the relevant 

n. activities Impairment of the investee); of non-financial assets 

The • Group Exposure, assesses or at rights, each to reporting variable date returns whether from its there involvement is an indication with the that investee; an asset may be impaired. 

If any • indication The ability exists, to use or its when power annual over impairment the investee testing to affect for its an returns. asset is required, the Group estimates 

the Generally, asset’s there recoverable is a presumption amount. An that asset’s a majority recoverable of voting amount rights is result the higher in control. of an To asset’s support cash this 

generating presumption units and (CGU) when the fair Group value has less less costs than of a disposal majority of and the its voting, value or in similar, use. It rights is determined of an investee, for an it 

individual considers asset, all relevant unless facts the asset and circumstances does not generate in assessing cash inflows whether that are it has largely power independent over an investee, of those 

from including: other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its 

recoverable 

• The 

amount, 

contractual 

the 

arrangement(s) 

asset is considered 

with the 

impaired 

other vote 

and 

holders 

is written 

of the 

down 

investee; 

to its recoverable amount. In 



• Rights arising from other contractual arrangements; 

• The Group’s voting rights and potential voting rights. 


The relevant activities are those which significantly affect the subsidiary’s returns. The ability to approve 


the operating and capital budget of a subsidiary and the ability to appoint key management personnel are 

Impairment 

decisions that 

losses 

demonstrate 

of continuing 

that 

operations 

the Group 

are 

has 

recognized 

the existing 

in the 

rights 

consolidated 

to direct the 

statement 

relevant 

of 

activities 

profit or 

of 

loss 

a 

in 

subsidiary. 

those expense categories consistent with the function of the impaired asset, except for a property 



Page 63 

Page 49


50 




(continued) 


(continued) 


The Group reassesses whether or not it controls an investee if facts and circumstances indicate that there 

AFS are changes financial to investments one or more include of the equity three and elements debt securities. of control. Equity Consolidation investments of a subsidiary classified as begins availablefor-sale 

the Group are obtains those neither control classified over the subsidiary as held-for-trading and ceases nor when designated the Group at fair loses value control through of the profit subsidiary. or loss. 

when 

After Assets, initial liabilities, measurement, income and AFS expenses financial of investments a subsidiary are acquired subsequently or disposed measured of during at fair the value year with are 

unrealized included in gains the consolidated or losses recognized financial statements as OCI until from the the investment date the Group is derecognized, gains control at until which the time, date the 

cumulative Group ceases gain to control or loss the is subsidiary. recognized Where in other the operating Group’s interest income is or less expense, than 100 or per the cent, investment the interest is 

determined attributable to outside be impaired, shareholders at which is time, reflected the cumulative in non-controlling loss is reclassified interest (NCI). to the consolidated statement 

of profit or loss in finance costs and removed from the OCI. The Group evaluates its AFS financial assets 

Profit or loss and each component of other comprehensive income (OCI) are attributed to the equity 


holders of the parent of the Group and to the NCI, even if this results in the NCI having a deficit balance. 

When necessary, adjustments are made to the financial statements of subsidiaries to bring their 


accounting policies into line with the Group’s accounting policies. 

Recognition All intragroup and assets measurement and liabilities, equity, income, expenses and cash flows relating to transactions 

Financial between members liabilities are of the classified, Group are at eliminated initial recognition, in full on as consolidation. 

financial liabilities at fair value through profit or 


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 derecognizes the related assets (including goodwill), 

overdrafts. 

liabilities, non-controlling interest and other components of equity while any resultant gain or loss is 

recognized in profit or loss. Any investment retained is recognized at fair value. 



2.3 Summary of significant accounting policies 


recognized The following the are consolidated the significant statement accounting of profit policies or loss applied when the in liabilities preparing are its derecognized consolidated as financial well as 

through statements: the EIR amortization process. Amortized cost is calculated by taking into account any discount or 

premium a. on Other acquisition intangible and fees assets or costs and goodwill that are an integral part of the EIR. The EIR amortization is 

included Intangible in assets finance acquired costs in separately the consolidated are measured statement on of initial profit recognition or loss. This at category cost. The generally cost of applies intangible to 

interest-bearing assets acquired loans in a business and borrowings. combination is their fair value at the date of acquisition. Following initial 

recognition, intangible assets with definite lives are carried at cost less any accumulated amortization 

(calculated m. on Inventories a straight-line basis over their useful lives) and accumulated impairment losses, if any. 

Petroleum Indefinite lived products intangibles, are valued such at as the goodwill, lower of cost are not and amortized, net realizable instead value. they are tested for impairment 

annually as a minimum, or when there are indicators of impairment. 


• When Purchase the Group cost is acquires valued on a weighted business, average it assesses method the financial assets and liabilities assumed for 

appropriate classification and designation in accordance with the contractual terms, economic 


circumstances and pertinent conditions as at the acquisition date. To the extent that the cost of acquiring 


an equity investment exceeds the fair value of the net assets acquired, the excess is recorded as 


goodwill. Currently, the group carries goodwill on the books related to the acquisition of GOw2 which 

occurred in fiscal year 2011. 

Page 62 

Page 50





Notes (continued) to the Consolidated financial statements for the years ended December 31, 2017 and 2016 

(continued) 


The useful lives of intangible assets are assessed as either finite or indefinite. 


Intangible 


assets with finite lives are amortized over the useful economic life and assessed for impairment 

whenever there is an indication that the intangible asset may be impaired. The amortization period and 


the amortization method for an intangible asset with a finite useful life is reviewed at least at the end of 


each reporting period. Changes in the expected useful life or the expected pattern of consumption of 


future economic benefits embodied in the asset are considered to modify the amortization period or 

method, The net realizable as appropriate, value and of crude are treated oil and as refined changes products in accounting is based estimates. on the estimated The amortization selling price expense in the 

on ordinary intangible course assets of business, with finite less lives the estimated is recognized costs of in completion the statement and of the profit estimated or loss costs in necessary the expense to 

category make the that sale. is consistent with the function of the intangible assets. 

Gains Materials or losses and supplies arising are from valued derecognition using the of weighted an intangible average asset, cost if method. any, are measured as the difference 

between the net disposal proceeds and the carrying amount of the asset and are recognized in the 

statement Pipeline fill of profit or loss when the asset is derecognized. 


pipeline. b. This Investment is on the in basis a joint that venture it is not held for sale or consumed in a production process, but is 

The necessary Group to has the an operation investment, of a a facility 25% participation during more in than the one Suriname operating Gold cycle, Project and JV its (SurGold) cost cannot limited be 

partnership, recouped through whereas sale the (or Group is significantly has joint control impaired). over the This limited applies partnership. even if the The part Group of inventory invests monthly that is 

through deemed cash to be calls an item to SurGold. of property, The plant Group’s and equipment investment cannot in the limited be separated partnership physically is considered from the rest a joint of 

venture inventory. and It is valued accounted at cost for using and is the depreciated equity method. over the useful life of the related asset. 

Under the equity method, the investment in the joint venture is initially recognized at cost. The carrying 

amount n. of the Impairment investment of is non-financial adjusted to assets recognize changes in the Group’s share of net assets of the 

limited The Group partnership assesses since at each the acquisition reporting date. whether there is an indication that an asset may be impaired. 


The statement of profit or loss reflects the Group’s share of the results of operations of the limited 


partnership. Any change in OCI of the investee is presented as part of the Group’s OCI. In addition, when 


there has been a change recognized directly in the equity of the limited partnership, the Group recognizes 


its share of any changes, when applicable, in the statement of changes in equity. 


The aggregate of the Group’s share of profit or loss of the limited partnership is shown on the face of the 


statement of profit or loss outside operating profit and represents profit or loss before tax. The financial 



statements of the limited partnership are prepared for the same reporting period as the Group. 

After specific application to the asset. of the In determining equity method, fair value the Group less costs determines of disposal, whether recent it is market necessary transactions to recognize are taken an 

impairment into account. loss, If no if such any, transactions its investment can be identified, in the limited an appropriate partnership. valuation The Group model determines is used. at each 

reporting date whether there is any objective evidence that the investment in the limited partnership is 


impaired. If this is the case, the Group calculates the amount of impairment as the difference between the 


recoverable amount of the joint venture and its carrying value and recognizes the loss as ‘Share of profit 


of the participation in a JV’ in the statement of profit or loss. 


Page 63 

Page 51


52 




(continued) 


(continued) 


c. Current versus non-current classification 

AFS The Group financial presents investments assets include and liabilities equity in and the debt statement securities. of financial Equity investments position based classified on current as availablefor-salcurrent 

distinction. are those neither classified as held-for-trading nor designated at fair value through profit or loss. 

and non- 


An asset is current when it is: 


- Expected to be realized or intended to be sold or consumed in the normal operating cycle; 


- Held primarily for the purpose of trading; 

determined to be impaired, at which time, the cumulative loss is reclassified to the consolidated statement 

- Expected to be realized within twelve months after the reporting period, or 


- Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at 


least twelve months after the reporting period. 

All other assets are classified as non-current. 


A liability is current when: 


- It is expected to be settled in the normal operating cycle; 


- It is held primarily for the purpose of trading; 


- It is due to be settled within twelve months after the reporting period, or 


- There is no unconditional right to defer the settlement of the liability for at least twelve months 


after the reporting period. The Group classifies all other liabilities as non-current. 

overdrafts. 

Deferred tax assets and liabilities are classified as non-current assets and liabilities. 


This is 

d. 

the 

Fair 

category 

value 

most 

measurement 

relevant to the Group. After initial recognition, interest bearing loans and 

The 

borrowings 

Group measures 

are subsequently 

financial 

measured 

instruments 

at amortized 

and non-financial 

cost using 

assets, 

the EIR 

at fair 

method. 

value at 

Gains 

each 

and 

balance 

losses 

sheet 

are 

date. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an 


orderly 

through 

transaction 

the EIR amortization 

between market 

process. 

participants 

Amortized 

at 

cost 

the 

is 

measurement 

calculated by 

date. 

taking 

The 

into 

fair 

account 

value of 

any 

an 

discount 

asset or 

or 

a 

liability 

premium 

is 

on 

measured 

acquisition 

using 

and 

the 

fees 

assumptions 

or costs that 

that 

are 

market 

an integral 

participants 

part 

would 

of the 

use 

EIR. 

when 

The 

pricing 

EIR amortization 

the asset or 

is 

liability, 

included 

assuming 

in finance 

that 

costs 

market 

in the 

participants 

consolidated 

act 

statement 

in their economic 

of profit 

best 

or loss. 

interest. 

This category 

A fair value 

generally 

measurement 

applies 

of 

to 

a 

interest-bearing 

non-financial asset 

loans 

takes 

and borrowings. 

into account a market participant's ability to generate economic benefits from 

the asset’s highest and best use or by selling it to another market participant that would utilize the asset in 

its highest 

m. 

and 

Inventories 

best use. The Group uses valuation techniques that are appropriate in the circumstances 

and 

Petroleum 

for which 

products 

sufficient 

are valued 

data 

at 

are 

the 

available 

lower of cost 

to measure 

and net realizable 

fair value, 

value. 

maximizing the use of relevant 

observable inputs and minimizing the use of unobservable inputs. All assets and liabilities for which fair 


value is measured or disclosed in the consolidated financial statements are categorized within the fair 


value hierarchy. For assets and liabilities that are recognized in the consolidated financial statements at 

fair Finished value goods on a recurring and work basis, in progress: the Group determines whether transfers have occurred between levels in 

the • hierarchy Cost of direct by re-assessing materials and categorization labor and a (based proportion on the of lowest manufacturing level input overheads that is significant based on to the normal fair 

value operating measurement capacity as but a whole) excluding at the borrowing end of each costs reporting period. 

Page 62 

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(continued) 


e. Revenue and other income 


Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Group 


and the revenue can be reliably measured, regardless of when the payment is received. Revenue is 

measured The cost of at crude the fair oil value and of refined the consideration products is received the purchase or receivable, cost, the taking cost into of refining, account including contractually the 

defined appropriate terms proportion of payment of and depreciation, excluding depletion taxes or duty. and amortization Revenue from and the overheads sale of goods based is recognized on normal 

when operating the capacity, significant determined risks and rewards on a weighted of ownership average of basis. the goods have passed to the buyer, usually on 

delivery The net of realizable the goods. value Revenue of crude from oil the and sale refined of goods products is measured is based on at the the fair estimated value of selling the consideration 

price in the 

received ordinary course or receivable, of business, net of less returns the and estimated allowances, costs of trade completion discounts and and the volume estimated rebates. costs necessary to 

Revenue make the from sale. the sale of oil products is recognized when the significant risks and rewards of ownership 

have Materials been and transferred, supplies are which valued is considered using the weighted to occur average when title cost passes method. to the customer. This generally 

occurs when the product is physically transferred into a vessel, pipe or other delivery mechanism. 

Revenues Pipeline fill are recorded from the sales of thermal energy when the product is delivered at a fixed or 

determinable Crude oil, which price, is title necessary has transferred to bring and a pipeline collectability into working is reasonably order, assured. is treated as a part of the related 


Sales between group companies, as disclosed in the operating segment information, are based on prices 


generally equivalent to commercially available prices. 



Interest income 


For all financial instruments measured at amortized cost, interest income is recorded using the effective 

interest rate (“EIR”). The EIR is the rate that exactly discounts the estimated future cash receipts over the 


expected life of the financial instrument or a shorter period, where appropriate, to the net carrying amount 


of the financial asset. Interest income is included in finance income in the statement of profit or loss. 



Dividends 


Revenue is recognized when the Group’s right to receive the payment is established, which is generally 


when shareholders approve the dividend. 


recoverable f. Foreign amount, currencies the asset is considered impaired and is written down to its recoverable amount. In 

assessing The consolidated value in financial use, the statements estimated future are presented cash flows in are United discounted States to dollars their present (US$), value which using is also a pretax 

Group’s discount functional rate that currency reflects and current presentation market assessments currency. Each of entity the time in the value Group of money determines and the its risks own 

the 

specific functional to currency the asset. and In determining items included fair value in the less financial costs statements of disposal, of recent each market entity is transactions measured using are taken that 

into functional account. currency. If no such Within transactions the Group, can GOw2 be identified, can be considered an appropriate as foreign valuation operations, model is used. whose functional 

Impairment currency changed losses of from continuing US$ to operations the Surinamese are recognized dollars (SRD) in the effective consolidated January statement 1, 2016. of This profit change or loss 

in arose those due expense to the change categories in major consistent contracts with the previously function denominated of the impaired in US$ asset, to SRD. except Therefore, a property as it 

relates previously to GOw2, revalued transactions where the are revaluation initially recorded was taken in the to functional OCI. In currency this case, (being the SRD) impairment at the is rate also of 

exchange recognized ruling OCI at up the to date the of amount the transaction. of any previous revaluation. 

(i) Transactions and balances 

Page 63 

Page 53


54 




(continued) 


(continued) 


Transactions in foreign currencies are initially recorded by the Group entities at their respective 

AFS financial functional investments currency include rate ruling equity at and the debt date securities. of the transaction. Equity investments Monetary classified assets and as availablefor-sale 

denominated are those neither in foreign classified currencies as held-for-trading are re-translated nor designated the functional at fair value currency through rate profit exchange or loss. 

liabilities 

After initial ruling measurement, at the reporting AFS date. financial investments are subsequently measured at fair value with 


Non-monetary assets and liabilities are translated using exchange rates that existed when the 


values were determined. Exchange differences on settlement or translation of monetary items are 


recognized in the consolidated statement of profit or loss. 


to determine (ii) Foreign whether subsidiaries the ability and intention to sell them in the near term is still appropriate. 

As at the reporting date, the assets and liabilities of these subsidiaries are translated into the 

(ii) Financial presentation liabilities currency of the Group at the rate of exchange ruling at the reporting date and, their 

statements of profit or loss are translated at the weighted average exchange rates for the year. 


Non-monetary items that are measured at historical cost in foreign currency are translated using 


the exchange rates as at the date of the initial transaction. The exchange differences arising on 


the translation are taken directly to other comprehensive income. On disposal of a foreign entity, 


the deferred cumulative amount recognized in equity relating to that particular foreign entity is 


recognized in the consolidated statement of profit or loss. 

overdrafts. 

g. Taxes 


Current income tax assets and liabilities for the current period are measured at the amount expected to 


be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the 


amount are those that are enacted, or substantively enacted at the reporting date in the countries where 


the Group operates and generates taxable income. Current income tax relating to items recognized 


directly in equity is recognized in equity and not in the statement of profit or loss. Management 


periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax 


regulations are subject to interpretation, and establishes provisions where appropriate. 


Deferred tax 

Deferred m. tax Inventories is provided using the liability method on temporary differences between the tax bases of 

Petroleum assets and products liabilities are and valued their carrying at the lower amounts of cost for and financial net realizable reporting value. purposes at the reporting date. 

Raw Deferred materials: tax liabilities are recognized for all taxable temporary differences subject to certain specific 

• exceptions. Purchase cost is valued on weighted average method 

Deferred tax assets are recognized for all deductible temporary differences and carry-forward of unused 


tax losses, to the extent that it is probable that future taxable profit will be available against which the 


temporary differences and carry forward of unused tax losses can be utilized. 


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(continued) 


The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent 


that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred 


tax asset to be utilized. Unrecognized deferred tax assets are reassessed at each reporting date and are 

recognized The cost of to crude the extent oil and that refined it has become products probable is the purchase that future cost, taxable the profits cost will of refining, allow the including deferred the tax 

asset appropriate to be recovered. proportion of depreciation, depletion and amortization and overheads based on normal 


Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year 

when The net the realizable asset is value realized of crude or the oil liability and refined is settled, products based is on based tax rates on the (and estimated tax laws) selling that price have in been the 

enacted ordinary or course substantively of business, enacted less the at the estimated reporting costs date. of Deferred completion tax and relating the estimated to items recognized costs necessary outside to 

profit make or the loss sale. is recognized outside profit or loss. 

Deferred Materials tax and assets supplies and are liabilities valued using are offset, the weighted only if average a legally cost enforceable method. right exists to set off current 

income tax assets against current income tax liabilities, and the deferred taxes relate to the same taxation 

authority Pipeline fill 


Sales pipeline. tax This is on the basis that it is not held for sale or consumed in a production process, but is 

Revenues, necessary to expenses the operation and assets of a are facility recognized during more net of than the amount one operating of sales cycle, tax except: and its cost cannot be 

recouped • Where through the sales (or tax is incurred significantly on a impaired). purchase This of assets applies or services even if the is not part recoverable of inventory from that the is 

deemed taxation to be an authority, item of property, in which plant case, and the sales equipment tax is cannot recognized be separated as part of physically the cost of from acquisition the rest of 

inventory. the It asset is valued or as at part cost of and the is expense depreciated item, over as applicable the useful life of the related asset. 

• Receivables and or payables are stated with the amount of sales tax included 

The net n. amount Impairment of sales of tax non-financial recoverable from, assets or payable to, the taxation authority is included as part of 

receivables The Group assesses or payables at each in the reporting consolidated statement whether there of financial is indication position. that an asset may be impaired. 


h. Property, plant and equipment 


Construction 

generating units 

in progress, 

(CGU) fair 

plant 

value 

and 

less 

equipment 

costs of 

are 

disposal 

stated at 

and 

cost, 

its 

net 

value 

of accumulated 

in use. It is 

depreciation 

determined 

and/or 

for an 

accumulated impairment losses, if any. Such cost includes the cost of replacing parts of the property, 


plant and equipment and borrowing costs for long-term construction projects if the recognition criteria are 


met. When significant parts of property, plant and equipment are required to be replaced at intervals, the 


Group recognizes such parts as individual assets with specific useful lives and depreciates them 



accordingly. Likewise, when a major inspection is performed, its cost is recognized in the carrying amount 

of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and 


maintenance costs are recognized in the consolidated statement of profit or loss as incurred. The present 


value of the expected cost for the decommissioning of the asset after its use, is included in the cost of the 


respective asset if the recognition criteria for a provision are met. Refer to Significant accounting 


judgments, estimates and assumptions (Note 2.5) and Provisions (Note 4.7) for further information about 


the recognized decommissioning provision. 


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(continued) 


Land and buildings are measured at historical cost, less accumulated depreciation on buildings, and 

impairment AFS financial losses investments are recognized include at equity the date and of debt revaluation. securities. Equity investments classified as availablefor-sale 

Exploration are and those evaluation neither classified assets as held-for-trading nor designated at fair value through profit or loss. 

Exploration After initial and measurement, evaluation activity AFS financial involves investments the search for are hydrocarbon subsequently resources, measured the at determination fair value with of 

technical unrealized feasibility gains or and losses the assessment recognized as of commercial OCI until the viability investment of an identified is derecognized, resource. at which time, the 


Once the legal right to explore has been acquired, costs directly associated with an exploration well are 


capitalized as exploration and evaluation projects in progress until the drilling of the well is complete and 


the results have been evaluated. 


These costs include directly attributable employee remuneration, materials and fuel used, rig costs and 

payments made to contractors. 


Geological and geophysical costs are recognized in the statement of profit or loss, as incurred. 


If 

Financial 

no potentially 

liabilities 

commercial 

are classified, 

hydrocarbons 

at initial recognition, 

are discovered, 

as financial 

the exploration 

liabilities 

asset 

at fair 

is 

value 

written 

through 

off through 

profit 

the 

or 

statement 

loss, loans 

of 

and 

profit 

borrowings, 

or as a dry 

payables, 

hole. 

as appropriate. All financial liabilities are recognized initially at fair 

If value extractable and, in the hydrocarbons case of loans are and found borrowings and, subject and payables, to further net of appraisal directly attributable activity (e.g. transaction the drilling costs. of 

additional The Group’s wells), financial it is probable liabilities that include they trade can be and commercially other payables, developed, loans the and costs borrowings continue including to be carried bank 

as overdrafts. projects in progress while sufficient/continued progress is made in assessing the commerciality of the 

hydrocarbons. 

Costs Loans and directly borrowings associated with appraisal activity undertaken to determine the size, characteristics and 

commercial This is the potential category of most a reservoir relevant following to the Group. the initial After discovery initial recognition, of hydrocarbons, interest including bearing the loans costs and of 

appraisal borrowings wells are where subsequently hydrocarbons measured were at not amortized found, are cost initially using capitalized the EIR method. as projects Gains progress. and losses are 


All such capitalized costs are subject to technical, commercial and management review, as well as review 


for indicators of impairment at least once a year. This is to confirm the continued intent to develop or 


otherwise extract value from the discovery. When this is no longer the case, the costs are written off 


through the consolidated statement of profit or loss. 


When proved reserves of oil are identified and development is sanctioned by management, the relevant 

capitalized expenditure is first assessed for impairment and (if required) any impairment loss is 


recognized, then the remaining balance is transferred to oil properties. 


Other than license costs, no amortization is charged during the exploration and evaluation phase. 






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(continued) 


Oil properties 


The costs of production development such as drilling, testing and completion of development wells are 


capitalized, notwithstanding if these wells are successful or not. Capitalized costs consist of the purchase 

price The cost of materials of crude and oil and services, refined including products the is Group’s the purchase internal cost, services. the cost Capitalized of refining, costs including for wells, the 

equipment appropriate and proportion production of facilities depreciation, are depreciated depletion using and amortization the units of production and overheads (UOP) based method. on normal 


All costs for development wells, related plant and equipment, and related Asset Retirement Obligation 

(ARO) The net are realizable capitalized. value Capitalized of crude oil costs and relating refined to products investments is based in the on oil the field, estimated including selling productive price in land the 

properties, ordinary course are of depreciated business, less based the on estimated the UOP costs method, of completion generally and by the individual estimated field, costs as necessary the proved to 

developed make the sale. reserves are produced. The UOP factor is derived from the year oil production and the related 

proved developed oil reserves. 


Oil properties – assets under construction 

Pipeline fill 

Expenditure is transferred from ’Exploration and evaluation assets’ to ‘Assets under construction’ which is 


a subcategory of ‘Oil and gas properties’ once the work completed to date supports the future 


development of the asset and such development receives appropriate approvals. After transfer of the 


exploration and evaluation assets, all subsequent expenditure on the construction, installation or 


completion of infrastructure facilities such as pipelines and the drilling of development wells, including 


unsuccessful development or delineation wells, is capitalized within ‘oil properties’. 


Development expenditure is net of proceeds from the sale of oil produced during the development phase 

to the extent that it is considered integral to the development of the asset. Any costs incurred in testing 


the assets to determine whether they are functioning as intended, are capitalized, net of any proceeds 


received from selling any product produced while testing. Where these proceeds exceed the cost of 


testing, any excess is recognized in the consolidated statement of profit or loss. 


When generating a development units (CGU) project fair value moves less into costs the of production disposal and stage, its value all assets in use. included It is determined ‘Assets for under an 

construction’ individual asset, are unless then transferred the asset does to ‘Producing not generate assets’ cash which inflows is also that a are sub-category largely independent of ‘Oil properties’. of those 

The from capitalization other assets of or certain groups construction/development of assets. Where the carrying costs ceases, amount and of an costs asset are or either CGU regarded exceeds as its 

part recoverable of the cost amount, of inventory the asset or is expensed, considered except impaired for costs and which is written qualify down for to capitalization its recoverable relating amount. to ‘Oil In 

and assessing gas properties’ value in use, asset the additions, estimated improvements future cash flows or new are developments. 

discounted to their present value using a pretax 


Oil properties – producing assets and other property, plant and equipment 


(i) Initial recognition 


‘Oil and gas properties’ and ‘Other property, plant and equipment’ are stated at cost, less accumulated 

depreciation 

Impairment losses 

and accumulated 

of continuing 

impairment 

operations 

losses. 

are recognized in the consolidated statement of profit or loss 




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58 




(continued) 


(continued) 


The initial cost of an asset comprises its purchase price or construction cost (if the asset was previously 

classified AFS financial as assets investments development), include equity any and costs debt directly securities. attributable Equity to investments bringing the classified asset into as operation, availablefor-sale 

the initial are estimate those neither of the classified decommissioning as held-for-trading obligation nor and, designated for qualifying at fair value assets through (where profit relevant), or loss. 

After borrowing initial costs. measurement, The purchase AFS price financial or construction investments cost are is the subsequently aggregate amount measured paid at and fair the value fair value with 

unrealized of any other gains consideration or losses given recognized to acquire as the OCI asset. until the investment is derecognized, at which time, the 


determined (ii) Depreciation/amortization 

to be impaired, at which time, the cumulative loss is reclassified to the consolidated statement 

of Oil profit properties or loss are in finance depreciated/amortized costs and removed on a from UOP the basis OCI. over The the Group total evaluates proved developed its AFS financial reserves assets of the 

field to determine concerned. whether The the UOP ability rate and calculation intention for to sell the them depreciation/amortization in the near term is still of appropriate. field development costs 

takes into account expenditures incurred to date, together with sanctioned future development 

expenditure. 


Other property, plant and equipment are generally depreciated on a straight-line basis over their 


estimated useful lives, which is generally 25 years for the refinery, and major inspection costs are 


amortized over three to five years, which represents the estimated period before the next planned major 


inspection. 


An The item Group’s of property, financial plant liabilities and include equipment trade and and any other significant payables, part loans initially and recognized borrowings is including derecognized bank 

upon overdrafts. disposal or when no future 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 Loans the and carrying borrowings amount of the asset) is included in the consolidated statement of profit or loss when the 

asset This is is the derecognized. category most relevant to the Group. After initial recognition, interest bearing loans and 

The borrowings asset’s are residual subsequently values, useful measured lives at and amortized methods cost of depreciation/amortization using the EIR method. Gains are reviewed and losses at each are 

reporting recognized period in the and consolidated adjusted prospectively, statement of if profit appropriate. or loss when the liabilities are derecognized as well as 


(iii) premium Major on maintenance, acquisition refits, and fees inspection or costs and that repairs are an integral part of the EIR. The EIR amortization is 

Expenditure included in finance on major costs maintenance the consolidated refits, inspections statement or of repairs profit or comprises loss. This the category cost of replacement generally applies assets to 

or interest-bearing parts of assets, loans inspection and borrowings. costs and overhaul costs. Where an asset, or part of an asset that was 

separately depreciated and is now written off, is replaced and it is probable that future economic benefits 

associated m. with Inventories the item will flow to the Group, the expenditure is capitalized. Where part of the asset 

replaced Petroleum was products not separately are valued considered at the lower as of a cost component and net realizable and therefore value. not depreciated separately, the 

replacement value is used to estimate the carrying amount of the replaced asset(s) and is immediately 


written off. Inspection costs associated with major maintenance programs are capitalized and amortized 


over the period to the next inspection. All other day-to-day repairs and maintenance costs are expensed 

as Finished incurred. goods and work in progress: 



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(continued) 


Refinery, power plant and other fixed assets 


The refinery, power plant and other fixed assets are valued at cost. The capitalized costs of these assets 


are depreciated on a straight-line basis, taking into account the estimated useful lifetime of the significant 

components The cost of of crude the refinery. oil and refined products is the purchase cost, the cost of refining, including the 


Projects operating in capacity, progress determined on a weighted average basis. 

Projects The net realizable in progress value relates of crude to work oil in and progress, refined for products which at is the based date on of the completion estimated the selling cost is price capitalized in the 

to ordinary the appropriate course of category business, of less property the estimated plant and costs equipment. of completion Project and in progress the estimated is not depreciated. 

costs necessary to 


Power plant assets 


The power plant assets are depreciated on a straight line basis and as follows: 

Asset Category 

Percentage 

Pipeline Building fill hall 5% 

Crude Production oil, which hall is necessary to bring 10% a pipeline into working order, is treated as a part of the related 

Furniture 33.33% 


Tank battery 20% 

necessary Powerhouse to equipment the operation of a 5 facility - 50 % during more than one operating cycle, and its cost cannot be 

Other units 5 - 20% 



Corporate inventory. It & is Other valued fixed at cost assets and is depreciated over the useful life of the related asset. 

Land and freehold estates are not depreciated. Other properties outside the production field are being 

amortized n. on Impairment a straight line of non-financial basis. The annual assets depreciation percentages are as follows; Where applicable 

a The residual Group value assesses is taken at each into consideration. 

reporting date whether there is an indication that an asset may be impaired. 


Asset Category 

Percentage 


Building hall 10% 

generating Telecommunication units (CGU) equipment fair value less costs of disposal 20% and its value in use. It is determined for an 

individual Dock TLFasset, unless the asset does not generate cash 4% inflows that are largely independent of those 

Oil tanker 10% 


Drilling machinery 20% 

recoverable Heavy equipment amount, the asset is considered impaired and 20% is written down to its recoverable amount. In 

assessing Transportation value in equipment use, the estimated future cash flows 33.33% are discounted to their present value using a pretax 


An 

specific 

item 

to 

of 

the 

property, 

asset. In 

plant 

determining 

and equipment 

fair value 

is 

less 

derecognized 

costs of disposal, 

upon disposal 

recent market 

or when 

transactions 

no future economic 

are taken 

benefits 

into account. 

are expected 

If no such 

from 

transactions 

its use or 

can 

disposal. 

be identified, 

Any gain 

an appropriate 

or loss arising 

valuation 

on de-recognition 

model is used. 

of the asset 

(calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is 


included in the consolidated statement of profit or loss when the asset is derecognized. The residual 


values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each 


financial year end and adjusted prospectively, if appropriate. 


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(continued) 


(continued) 


i. Leases 

AFS The determination financial investments of whether include an arrangement equity and debt is, or securities. contains, Equity a lease investments is based on classified the substance as availablefor-sale 

arrangement are those at the neither inception classified date. as held-for-trading The arrangement nor designated is assessed at fair for value whether through fulfillment profit or of loss. the 

of the 

After arrangement initial measurement, is dependent on AFS the financial use of a specific investments asset are or assets subsequently or the arrangement measured at conveys fair value a right with to 

unrealized use the asset gains or assets, or losses even recognized if the asset as (or OCI assets until are) the is investment not explicitly is specified derecognized, in an arrangement. 

at which time, the 

cumulative Group as a lessee gain or loss is recognized in other operating income or expense, or the investment is 

determined Finance leases to be that impaired, transfer at to which the Group time, substantially the cumulative all loss of the is reclassified risks and benefits to the consolidated incidental to ownership statement 

of profit the leased or loss item, in finance are capitalized costs and removed at the commencement from the OCI. The of the Group lease evaluates at the fair its AFS value financial of the leased assets 

to property determine or, whether if lower, the at ability the present and intention value to of sell the them minimum the near lease term payments. is still appropriate. Lease payments are 

apportioned between finance charges and a reduction in the lease liability so as to achieve a constant 

(ii) rate Financial of interest liabilities on the remaining balance of the liability. Finance charges are recognized in finance costs 

Recognition in the consolidated and measurement 

statement of profit or loss. 

Financial A leased asset liabilities is depreciated are classified, over at the initial useful recognition, life of the asset. financial However, liabilities if there at fair is no value reasonable through certainty profit or 

loss, that the loans Group and borrowings, will obtain ownership payables, by as appropriate. the end of the All financial lease term, liabilities the asset are recognized is depreciated initially over at the fair 

value shorter and, of the in the estimated case of useful loans and life of borrowings the asset and payables, the lease net term. of directly The Group attributable has concluded transaction that costs. there 

The are no Group’s finance financial leases as liabilities at December include 31, trade 2017 and and other 2016. payables, loans and borrowings including bank 

overdrafts. 

An operating lease is a lease other than a finance lease. Operating lease payments are recognized as an 

operating expense in the consolidated statement of profit or loss on a straight-line basis over the lease 

Loans 

term. 

and borrowings 


borrowings j. are Borrowing subsequently costs measured at amortized cost using the EIR method. Gains and losses are 

recognized Borrowing costs in the directly consolidated attributable statement to of the profit acquisition, or loss when construction the liabilities or production are derecognized of an asset well that as 

through necessarily the takes EIR amortization a substantial process. period Amortized of time to get cost ready is calculated for its intended by taking use into or account sale are any capitalized discount as or 

premium part of the on cost acquisition of the respective and fees asset. or costs All other that are borrowing an integral costs part are expensed of the EIR. in The the period EIR amortization in which they is 

included occur. Borrowing finance costs consist in the consolidated of interest and statement other costs of profit that or an loss. entity This incurs category in connection generally applies with the to 

interest-bearing borrowing of funds. loans Borrowing and borrowings. costs incurred on or after the date of transition for all eligible qualifying 

assets are capitalized. 


Petroleum k. products Intangible are assets valued at the lower of cost and net realizable value. 

Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible 


assets acquired in a business combination is their fair value as at the date of acquisition. Following initial 


recognition, intangible assets are carried at cost less accumulated amortization and accumulated 

Finished 

impairment 

goods 

losses, 

and work 

if any. 

in progress: 

Internally generated intangible assets, excluding capitalized development 

• costs, Cost are of not direct capitalized. materials Instead, and labor the related and a expenditure proportion of is manufacturing recognized the overheads consolidated based statement on normal of 

profit operating or loss when capacity is but incurred. excluding The borrowing useful lives costs of intangible assets are assessed as either finite or 

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(continued) 


indefinite. Intangible assets with finite lives are amortized over their useful economic lives and assessed 


for impairment whenever there is an indication that the intangible asset may be impaired. 


The amortization period and the amortization method for an intangible asset with a finite useful life are 


reviewed at least at the end of each reporting period. Changes in the expected useful life or the expected 


pattern of consumption of future economic benefits embodied in the asset are accounted for by changing 


the amortization period or method, as appropriate, and are treated as changes in accounting estimates. 

The net amortization realizable expense value of crude on intangible oil and refined assets products with finite is based lives on is the recognized estimated in selling the consolidated 

price in the 

statement ordinary course of profit business, or loss less the expense the estimated category costs consistent of completion with and the function the estimated of the costs intangible necessary assets. to 

Intangible make the sale. assets with indefinite useful lives are not amortized, but are tested for impairment annually, 

either individually or at the cash-generating unit level. The assessment of indefinite life is reviewed 


annually to determine whether the indefinite life continues to be supportable. If not, the change in useful 

life from indefinite to finite is made on a prospective basis. Gains or losses arising from de-recognition of 

Pipeline fill 

an intangible asset are measured as the difference between the net disposal proceeds and the carrying 


amount of the asset and are recognized in the consolidated statement of profit or loss when the asset is 


derecognized. 



l. Financial instruments – recognition and measurement 


A financial instrument is any contract that gives rise to a financial asset of one entity and a financial 


liability or equity instrument of another entity. 


(i) Financial assets 




Financial assets are classified, at initial recognition, as financial assets at fair value through profit or loss, 


loans and receivables, held-to-maturity investments, available-for-sale financial assets, as appropriate. 


The Group determines the classification of its financial assets at initial recognition. All financial assets are 


recognized initially at fair value plus, in the case of assets not at fair value through profit or loss, 


transaction costs that are attributable to the acquisition of the financial asset. 




Loans and receivables 

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are 


not quoted in an active market. After initial measurement, such financial assets are subsequently 


measured at amortized cost using the effective interest rate (EIR) method, less impairment. Amortized 


cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are 


an integral part of the EIR. The EIR amortization is included in finance income in the consolidated 


statement of profit or loss. 


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62 




(continued) 


(continued) 































overdrafts. 

overdrafts. 































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(continued) 


(continued) 





















Pipeline fill 

Pipeline fill 













































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64 





(continued) 


Goodwill is tested for impairment annually as at December 31 and when circumstances indicate that the 

carrying AFS financial value investments may be impaired. include Impairment equity and debt is determined securities. for Equity goodwill investments by assessing classified the as recoverable availablefor-sale 

of are each those CGU neither to which classified the goodwill as held-for-trading relates. Where nor the designated recoverable at fair amount value of through the cash-generating 

profit or loss. 

amount 

unit After is initial less than measurement, their carrying AFS amount, financial an investments impairment loss are is subsequently recognized. measured Impairment at losses fair value relating with to 

unrealized goodwill cannot gains be or reversed losses recognized in future periods. as OCI until the investment is derecognized, at which time, the 


determined o. to Cash be impaired, and short–term at which deposits time, the cumulative loss is reclassified to the consolidated statement 

of Cash profit and or short-term loss in finance deposits costs in and the removed consolidated from statement the OCI. The of financial Group evaluates position comprise its AFS financial cash at assets banks 

to and determine on hand whether and short-term the ability deposits and intention with a to maturity sell them of in three the near months term or is less, still appropriate. which are subject to an 

insignificant risk of changes in value. For the purpose of the consolidated statement cash flows, cash and 

cash (ii) Financial equivalents liabilities consist of cash and short-term deposits as defined above, net of outstanding bank 

overdrafts Recognition as and they measurement 

are considered an integral part of the Group’s cash management. 


Restricted loss, loans Cash and borrowings, payables, as appropriate. All financial liabilities are recognized initially at fair 

Restricted value and, in cash the case is required of loans for and financing borrowings purposes and payables, as this net has of been directly the attributable requirement transaction of Staatsolie’s costs. 

financiers. The Group’s The financial restricted liabilities accounts include are used trade for and international other payables, collections loans from and our borrowings international including customers bank 

to overdrafts. deposit their payments. The accounts contain a three months’ worth of debt service and are funded 

monthly. Every three months interest and principal, if any, is paid out. After the necessary funding has 

taken Loans place, and borrowings Staatsolie can obtain the remaining cash for its operations. 


borrowings p. are Cash subsequently dividend measured at amortized cost using the EIR method. Gains and losses are 

The recognized Group in recognizes the consolidated a liability statement to make of cash profit distributions or loss when to owners the liabilities of equity are derecognized when the distribution as well as is 

authorized through the and EIR the amortization distribution process. is no longer Amortized at the cost discretion calculated of the by Group. taking into A corresponding account any discount amount or is 

recognized premium on directly acquisition in equity. and fees or costs that are an integral part of the EIR. The EIR amortization is 


interest-bearing q. Provisions loans and borrowings. 

General 

Provisions m. are Inventories recognized when the Group has a present obligation (legal or constructive) as a result of a 

past Petroleum event, products it is probable are valued that an at the outflow lower of of resources cost and net embodying realizable economic value. 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 a provision is presented in the consolidated statement of profit or loss net of any 


reimbursement. If the effect of the time value of money is material, provisions are discounted using a 

current Finished pre-tax goods rate and that work reflects, in progress: when appropriate, the risks specific to the liability. When discounting is 

used, • Cost the of increase direct materials in the provision and labor due and to the a proportion passage of time manufacturing is recognized overheads as a finance based cost on normal in the 

consolidated operating statement capacity but of profit excluding or loss. borrowing costs 

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(continued) 


Decommissioning liability 


The Group recognizes a decommissioning liability where 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, The cost of and crude a reliable oil and estimate refined of the products amount is of the obligation purchase can cost, be made. the cost of refining, including 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 recognized, the present value of the estimated costs is 

capitalized The net realizable by increasing value the of crude carrying oil and amount refined of the products related is oil based assets on to the estimated extent that selling it was price incurred the by 

the ordinary development/construction course of business, less of the estimated field. Any costs decommissioning of completion and obligations the estimated that costs arise necessary through the to 

production make the sale. of inventory are expensed when the inventory item is recognized in cost of goods sold. 

Additional disturbances which arise due to further development/construction at the oil and gas property 


are recognized as additions or charges to the corresponding assets and decommissioning liability when 

they occur. Costs related to restoration of site damage (subsequent to start of commercial production) 

Pipeline fill 

that is created on an ongoing basis during production are provided for at their net present values and 


recognized in profit or loss as production continues. 


Changes necessary in to the the estimated operation timing of a or facility cost of during decommissioning more than one are operating dealt with cycle, prospectively and its by cost recording cannot be an 

adjustment recouped through to the provision sale (or is and significantly a corresponding impaired). adjustment This applies to oil and even gas if the properties. part of inventory Any reduction that in is 

the deemed decommissioning to be an item liability of property, and, therefore, plant and any equipment deduction cannot from be the separated asset to physically which it relates, from the may rest not of 

exceed inventory. the It is carrying valued at amount cost and of is that depreciated asset. If over it does, the useful any excess life of the over related the asset. carrying value is taken 

immediately to the consolidated statement of profit or loss. 

If the change n. Impairment in estimate of results non-financial increase assets in the decommissioning liability and, therefore, an addition 

to The the Group carrying assesses value of at each the asset, reporting the Group date whether considers there whether is an indication this is an that indication an asset of impairment may be impaired. of the 

asset If any as indication a whole, exists, and if or so, when tests annual for impairment. impairment If, for testing mature for fields, an asset the is estimate required, for the the Group revised estimates value of 

oil the and asset’s gas assets recoverable net of amount. decommissioning An asset’s provisions recoverable exceeds amount the recoverable is the higher value, of an that asset’s portion or of cash the 

increase generating is charged units (CGU) directly fair to value expense. less costs of disposal and its value in use. It is determined for an 


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 recognized in the consolidated statement of profit or loss as a finance cost. 









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(continued) 


(continued) 


r. Pensions and other post–employment benefits 

AFS The Group financial operates investments defined include benefit equity pension and plans. debt securities. Re-measurements, Equity investments comprising classified of actuarial as gains availablefor-sale 

losses, the are those effect neither of asset classified ceiling as held-for-trading (excluding amounts nor designated included in at net fair interest value through on the profit net or defined loss. 

and 

After benefit initial liability) measurement, and the return AFS on financial plan assets investments (excluding are amounts subsequently included measured in net interest at fair on value the with net 

unrealized defined benefit gains liability), or losses are recognized as immediately OCI until the in the investment consolidated is derecognized, statement of at financial which time, position the 

cumulative with a corresponding gain loss debit is or recognized credit to retained other earnings operating through income OCI or in expense, the period or in the which investment they occur. is 

determined Re-measurements to be impaired, are not at reclassified which time, to the profit cumulative or loss loss in subsequent is reclassified periods. to the consolidated In addition, the statement Group 

of operates profit or other loss in long-term finance costs employee and removed benefit plans, from the of which OCI. The the Group re-measurements evaluates its are AFS recognized financial assets in the 

to profit determine or loss. whether Furthermore, ability for both and intention the defined to sell benefit them pension in the near plans term and is the still other appropriate. long-term employee 

benefit plans past service costs are recognized in profit or loss on the earlier of: 

(ii) Financial - The date liabilities of the plan amendment or curtailment 

Recognition 

And 

and measurement 

Financial 

- The 

liabilities 

date on 

are 

which 

classified, 

the Group 

at initial 

recognizes 

recognition, 

related 

as 

restructuring 

financial liabilities 

costs 

at fair value through profit or 

loss, Net interest loans and is calculated borrowings, by payables, applying as the appropriate. discount rate All to financial the net liabilities defined are benefit recognized liability or initially asset. at The fair 

value Group and, recognizes in the case the of following loans and changes borrowings the and net payables, defined net benefit of directly obligation attributable under transaction ‘cost of sales’, costs. 

The ‘administration Group’s financial expenses’ liabilities and ‘selling include and trade distribution and other expenses’ payables, in the loans consolidated and borrowings statement including of profit bank or 

overdrafts. loss (by function): 

- Service costs comprising current service costs, past-service costs, gains and losses on 

Loans and curtailments borrowings and non-routine settlements 

This - is the Net interest category expense most relevant or income to the Group. After initial recognition, interest bearing loans and 


2.4 Restatements and First-time adoption of IFRS 


through These consolidated the EIR amortization financial process. statements, Amortized for the cost year is ended calculated December by taking 31, 2017 into account and 2016, any are discount the first or 

premium Staatsolie on has acquisition prepared and in accordance fees costs with that IFRS. are For an integral periods part including of the the EIR. year The ended EIR amortization December 31, is 

included 2016 and in finance prior, Staatsolie costs in the prepared consolidated its consolidated statement of financial profit or loss. statements This category in accordance generally with applies U.S. to 

interest-bearing generally accepted loans accounting and borrowings. principles (US GAAP). During the preparation of the December 31, 2017 

and 2016 consolidated financial statements, the Group identified errors in the opening balance as at 

January m. 1, 2016 Inventories and the ending balance as at December 31, 2016, which have been restated as part of 

Petroleum the IFRS conversion products are procedures. valued at the lower of cost and net realizable value. 

Raw Accordingly, materials: Staatsolie has prepared its consolidated financial statements that comply with IFRS as at 

• December Purchase 31, cost 2017, is valued together on with weighted the comparative average method period data for the year ended December 31, 2016, 

as described in the summary of significant accounting policies. In preparing the consolidated financial 


statements, Staatsolie’s opening statement of consolidated financial position was prepared as at January 


1, 2016, Staatsolie’s date of transition to IFRS. This note explains the principal adjustments made by 


Staatsolie in restating its US GAAP financial statements, including the consolidated statement of financial 

Page 62 

Page 66






(continued) 


position as at January 1, 2016 and the consolidated financial statements for the year ended December 


31, 2016. 


The Exemptions cost of applied crude oil and refined products is the purchase cost, the cost of refining, including the 

appropriate IFRS 1, First-time proportion Adoption of depreciation, of International depletion Financial and Reporting amortization Standard, overheads allows certain based elective on normal and 

mandatory operating capacity, exemptions determined where on costs a weighted of implementing average basis. exceed the benefits of reporting. After thorough 

examination The net realizable and analysis, value of Staatsolie crude oil applied and refined the following products elective is based exemptions: 

the estimated selling price in the 

ordinary 1. Goodwill course of – business, the carrying less value the estimated of goodwill costs at transition of completion date is and not restated. the estimated costs necessary to 

make 2. the Oil sale. assets - were valued at deemed costs and are not revalued. 

3. Property plant and equipment – the Group elected to measure PPE at transition date at deemed 


cost (using historical costs). 

4. Intangible assets – the Group elected to measure capitalized software at transition dated at 

Pipeline fill 

deemed cost (using historical costs). 



Estimates 


The estimates at January 1, 2016 and at December 31, 2016 are consistent with those made for the 


same dates in accordance with US GAAP (after adjustments to reflect any differences in accounting 


policies) apart from the following items: 


Under US GAAP, a weighted average for the useful lives of the different property, plant and equipment 

components n. Impairment was calculated, of non-financial whereas IFRS assets requires the useful lives of the separate assets (varying 10, 

The 15, 30 Group years). assesses The change at each in reporting useful life date estimates whether also there impacted is an indication the provision that an for asset decommissioning, may be impaired. as 

If set any out indication the notes exists, to the or reconciliation when annual of impairment equity as at testing January for an 1, 2016 asset and is required, December the 31, Group 2016 estimates and total 

the comprehensive asset’s recoverable income for amount. the year An ended asset’s December recoverable 31, 2016. amount is the higher of an asset’s or cash 

generating The estimates units used (CGU) by the fair Group value less to present costs of the disposal estimation and balances its value in in accordance use. It is determined with IFRS for reflect an 

individual conditions asset, at January unless 1, 2016, the asset the date does of not transition generate to IFRS cash inflows and as that December are largely 31, independent 2016. of those 











Page 63 

Page 67

Page 68 


68 




(continued) Notes to the Consolidated financial statements for the years ended December 31, 2017 and 2016 

(continued) 


Group reconciliation of equity as at January 1, 2016 (date of transition to IFRS) 


x US$ 1,000 are those neither classified Notes as held-for-trading previously Restatements nor designated at fair Notes value through profit January or loss. 1, 

US GAAP 

As at 

US GAAP 

IFRS 

restated 

adjustments 

audited 

2016 

After 

Assets 

initial measurement, AFS financial investments are subsequently measured at fair value with 

Non-current assets 


Oil, exploration and producing properties 1a 313,175 12,755 325,930 Aiii 156,830 482,760 

cumulative Refining properties gain or loss is recognized 1b in 1,023,452 other operating 6,284income 1,029,736 or expense, Ai, ii or the 26,556 investment 1,056,292is 

Other property, plant and equipment 1c 158,374 (3,394) 154,980 Ai 31,676 186,656 

determined Projects progress to be impaired, at which 27 time, the 205,168 cumulative loss 11,040is reclassified 216,208 to Aiii the consolidated (216,208) statement - 

Goodwill 5,447 - 5,447 - 5,447 

of Other profit intangible or loss assets in finance costs and removed 2 12,047 from the OCI. (389) The Group 11,658 evaluates its AFS financial - 11,658 assets 

Investments Joint Venture 4 227,964 (3,063) 224,901 B (7,516) 217,385 



Recognition Trade receivables and measurement 7 118,679 (360) 118,319 - 118,319 

Prepayments and other current assets 8 52,277 (8,973) 43,304 - 43,304 


Loan receivable short-term 28 1,796 (991) 805 - 805 

loss, Short-term loans investments and borrowings, payables, as appropriate. 6,910 All financial - liabilities 6,910 are recognized - initially 6,910 at fair 

Restricted cash 3 - 6,444 6,444 - 6,444 

value Cash and, short-term in the deposits case of loans and borrowings 3 54,064 and payables, (23,432) net of 30,632 directly attributable transaction - 30,632 costs. 

Total current assets 305,230 (27,312) 277,918 885 278,803 


Total assets 2,260,976 214 2,261,190 (7,777) 2,253,413 

overdrafts. 


Retained earnings 1,095,291 26,386 1,121,677 A,B,C,D, (3,589) 1,118,088 

E 


Other capital reserves 11,360 - 11,360 - 11,360 

Total equity 1,118,755 26,386 1,145,141 (3,589) 1,141,552 




Bond 98,281 - 98,281 - 98,281 

through Term Loans the EIR amortization process. Amortized 623,191cost is calculated - 623,191 by taking into account any - discount 623,191or 

Provisions 9 125,659 (41,720) 83,939 D (4,819) 79,120 

premium Employee defined on acquisition benefit liabilities and fees or 10costs that 42,545 are an integral 13,072 part 55,617 of the EIR. E The EIR (1,902) amortization 53,715is 

Deferred tax liability 5 - 4,395 4,395 F 2,533 6,928 

included Other long in term finance liabilities costs in the consolidated statement 6,365 of profit - or loss. 6,365 This category generally - applies 6,365to 

Total non-current liabilities 896,041 (24,253) 871,788 (4,188) 867,600 








Deferred tax asset 6 10,119 (10,119) - - - 

Total non-current assets 1,955,746 27,526 1,983,272 (8,662) 1,974,610 


Inventories 71,504 - 71,504 C 885 72,389 


Equity 

Common stock 12,104 - 12,104 - 12,104 

Current liabilities 

Bank overdraft 2,560 - 2,560 - 2,560 

Trade payables 110,350 - 110,350 - 110,350 

Accruals and other liabilities 11 64,786 (2,509) 62,277 - 62,277 

Income tax payable 12 3,683 590 4,273 - 4,273 

Short-term portion of loans 64,801 - 64,801 - 64,801 

Total current liabilities 246,180 (1,919) 244,261 - 244,261 

Total liabilities 1,142,221 (26,172) 1,116,049 (4,188) 1,111,861 

Total equity and liabilities 2,260,976 214 2,261,190 (7,777) 2,253,413 



Page 62






(continued) 


Group reconciliation of equity as at December 31, 2016 



x US$ 1,000 

Notes 

US GAAP 

previously 

audited 

Restatements 

US GAAP 

restated 


Assets 

appropriate Non -current assets proportion of depreciation, depletion and amortization and overheads based on normal 

Oil, exploration and producing properties 1a 336,530 12,091 348,621 Aiii 95,714 444,335 


The Projects net in realizable progress value of crude oil 27and refined 132,140products 1,623 is based 133,763 on the estimated Aiii (133,763) selling price in -the 

Goodwill 5,447 - 5,447 - 5,447 

ordinary Other intangible course assets of business, less the 2estimated 8,434 costs of completion 407 and 8,841 the estimated costs - necessary 8,841to 

Investments in Joint Venture 4 308,719 (3,063) 305,656 B (20,350) 285,306 


Pipeline fill 

Inventories 13 67,142 (1,273) 65,869 - 65,869 

Crude Trade receivables oil, which is necessary to bring 7 a pipeline 108,606 into working (6,728) order, 101,878 is treated as a part - of the 101,878 related 

Prepayments and other current assets 8 68,387 (23,915) 44,472 - 44,472 

pipeline. Loan receivable This short-term is on the basis that it 28is not held 8,368for sale or 805consumed 9,173in a production -process, but 9,173is 

Short-term investments 14 3,754 43 3,797 - 3,797 



recouped Cash and short-term through deposits sale (or is significantly 3 impaired). 39,166 This (21,795) applies even 17,371 if the part of inventory - that 17,371is 

Total current assets 295,423 (45,493) 249,930 - 249,930 


Total assets 2,265,038 (25,193) 2,239,845 (49,422) 2,190,423 


Common n. stockImpairment of non-financial assets 12,104 - 12,104 - 12,104 

The Retained Group earnings assesses at each reporting date 1,091,139 whether there (11,162) is an indication 1,079,977 that A,B,D, 

an asset (2,700) may be impaired. 1,077,277 

E,F,G 

Other capital reserves 11,116 - 11,116 - 11,116 


Total equity 1,114,359 (11,162) 1,103,197 (2,700) 1,100,497 



generating Bond units (CGU) fair value less costs 98,475 of disposal and - its value 98,475in use. It is determined - 98,475 for an 

Term loans 591,646 - 591,646 - 591,646 

individual Provisions asset, unless the asset does 9 not 135,950 generate cash (41,716) inflows that 94,234 are largely D independent (45,947) of 48,287 those 

Employee defined benefit liabilities 10 50,271 14,394 64,665 E 404 65,069 


Other long term liabilities 15 6,544 (5,082) 1,462 - 1,462 

recoverable Total non-current amount, liabilities the asset is considered 882,886 impaired and (32,404) is written 850,482 down to its recoverable (45,543) amount. 804,939In 

assessing Current liabilities value in use, the estimated future cash flows are discounted to their present value using a pretax 

Trade discount payables rate that reflects current 16 market 91,994 assessments 4,624of the 96,618 time value of money - and the 96,618 risks 

Bank overdraft 3,713 - 3,713 - 3,713 

Provisions (short-term) - - - D 1,600 1,600 

specific 

Accruals and 

to the 

other 

asset. 

liabilities 

In determining fair 

11 

value 

91,316 

less costs of 

1,743 

disposal, 

93,059 

recent market 

E 

transactions 

221 

are 

93,280 

taken 

into 

Income 

account. 

tax payable 

If no such transactions 

12 

can be identified, 

11,739 

an appropriate 

12,006 23,745 

valuation 

H 

model is 

(3,000) 

used. 

20,745 


in Total those liabilities expense categories consistent with 1,150,679 the function (14,031) of the 1,136,648 impaired asset, except (46,722) for a 1,089,926 property 


Total equity and liabilities 2,265,038 (25,193) 2,239,845 (49,422) 2,190,423 


Notes 

IFRS 

adjustments 

As at 

December 

31, 2016 

Refining properties 1b 999,152 5,103 1,004,255 Ai, ii 58 1,004,313 

Other property, plant and equipment 1c 148,454 (2,211) 146,243 Ai, G 2,984 149,227 

Loan receivable long term 14,677 - 14,677 - 14,677 


Materials Deferred tax and asset supplies are valued using 6 the weighted 16,062 average (5,500) cost method. 10,562 F 5,935 16,497 

Total non-current assets 1,969,615 20,300 1,989,915 (49,422) 1,940,493 



Equity 

Short-term portion of loans 69,031 - 69,031 - 69,031 

Total current liabilities 267,793 18,373 286,166 (1,179) 284,987 

Page 63


70 





(continued) 


Group reconciliation of comprehensive income for the year ended December 31, 2016 


are those neither classified as held-for-trading previously nor designated US GAAP at fair value through IFRS profit December or loss. 31, 

US GAAP 

As at 

x US$ 1,000 

Notes audited Restatements restated Notes adjustments 2016 


unrealized Revenue gains or losses recognized 17 as OCI 368,291 until the investment (10,586) 357,705 is derecognized, at which - time, 357,705 the 

Cost of sales 17,18 (201,744) (50,143) (251,887) Aii, C 640 (251,247) 

cumulative 

Gross profit 

gain or loss is recognized in other 

166,547 

operating 

(60,729) 

income 

105,818 

or expense, or the 

640 

investment 

106,458 

is 

determined Other income/(expense) to be impaired, at which 19time, the cumulative 13,846 loss (389) is reclassified 13,457 to the consolidated - statement 13,457 

Expensed projects 17 (1,411) (948) (2,359) - (2,359) 

of Exploration profit or expenses loss in finance costs and 27 removed from (1,524) the OCI. (4,983) The Group (6,507) evaluates its AFS - financial assets (6,507) 

to Selling determine and distribution whether expenses the ability and 20 intention to (21,898) sell them in the (3,079) near term (24,977) is still appropriate. - (24,977) 

Other operating expenses 17,21 (81,138) 68,146 (12,992) Diii, G 1,349 (11,643) 

General and administrative expenses 17,22 (28,248) (1,630) (29,878) I (1,589) (31,467) 

Operating profit (loss) 46,174 (3,612) 42,562 400 42,962 


Finance income 23 4,810 30 4,840 - 4,840 

Finance costs 1,17,23 (46,375) (6,407) (52,782) Bi, Eii (12,340) (65,122) 


Share of profit of Suriname Gold Project JV 8,121 - 8,121 Bii (7) 8,114 

Financial Profit (loss) before liabilities income are taxclassified, at initial recognition, 12,730 as financial (9,989) liabilities 2,741 at fair value (11,947) through profit (9,206) or 

Income tax expense 12 (7,508) 6,196 (1,312) F 2,921 1,609 


Profit (loss) for the year 5,222 (3,793) 1,429 (9,026) (7,597) 


Attributable to: 


Equity holders of the parent 5,222 (3,793) 1,429 (9,026) (7,597) 

overdrafts. 

5,222 (3,793) 1,429 (9,026) (7,597) 

Basic and diluted earnings per ordinary share 

(US$ per share) 1.04 0.29 (1.52) 
















Page 62 

Page 70





(continued) 


(continued) 


Group reconciliation of other comprehensive income for the year ended December 31, 2016 



x US$ 1,000 

US GAAP 

previously 

US GAAP 

IFRS As at December 

The cost of crude oil and refined Notes products audited is Restatements the purchase restated cost, Notes the cost adjustments of refining, 31, including 2016 the 


Other comprehensive income not to be 

operating reclassified to capacity, profit or loss determined on a weighted average basis. 


The Pensions net and realizable other postretirement value of crude oil and refined products is based on the estimated selling price in the 

24 (6,556) (4,396) (10,952) 

1,845 (9,107) 

benefits 

I 


Tax effect 24 2,360 1,162 3,522 I (385) 3,137 


(4,196) (3,234) (7,430) 1,460 (5,970) 

Net other comprehensive income 

Materials (loss) not to and be reclassified supplies to are profit valued or using the (4,196) weighted (3,234) average cost (7,430) method. 1,460 (5,970) 

loss in subsequent periods 

Pipeline Other comprehensive fill income to be 

reclassified to profit or loss in 



pipeline. Unrealized gains This and is (losses) on the shortterm 

investments 

basis that it is not held for sale or consumed in a production process, but is 

25 (3,156) 43 (3,113) - (3,113) 


Tax effect 25 1,136 (127) 1,009 - 1,009 

recouped through sale (or is significantly (2,020) impaired). This (84) applies (2,104) even if the part - of inventory (2,104) that is 


Currency translation adjustment GOw2 26 (3,159) (12,147) (15,306) - (15,306) 

inventory. Tax effect It is valued at cost and is depreciated - over the - useful life - of the related asset. - - 

(3,159) (12,147) (15,306) - (15,306) 

Net other comprehensive n. Impairment income of non-financial assets 

(loss) to be reclassified to profit or loss 

(5,179) (12,231) (17,410) - (17,410) 


in subsequent periods 

If Other any comprehensive indication exists, income (loss) or when for annual impairment testing for an asset is required, the Group estimates 

(9,375) (15,465) (24,840) 1,460 (23,380) 

the year net of tax 




from 

Notes 

other 

to the 

assets 

reconciliation 

or groups of 

of 

assets. 

equity 

Where 

as at January 

the carrying 

1, 2016 

amount 

and 

of 

December 

an asset or 

31, 

CGU 

2016 

exceeds 

and total 

its 

recoverable 

comprehensive 

amount, 

income 

the asset 

for the 

is 

year 

considered 

ended December 

impaired and 

31, 

is 

2016 

written down to its recoverable amount. In 



The following restatements and presentation reclassification adjustments were made to the US GAAP 

consolidated financial statement (in thousands US$). 


1 Property, plant and equipment (PP&E) 


a. Under US GAAP, Staatsolie has recognized provisions for decommissioning its production field 


and related facilities, the refinery and the power plant on the basis of discounted expected 


expenditures. Initially an asset for decommissioning was recognized for the same amount, and 


amortized using the units of production method (UOP). Under the UOP method the asset is 


amortized in proportion to the amount of asset usage, as described in the general notes to the 

Page 63 

Page 71


72 





(continued) 


consolidated financial statement. The provision for decommissioning increases by unwinding the 

AFS financial finance investments charge to include the profit equity and and loss. debt An securities. evaluation Equity of investments the decommissioning classified as assets availablefor-sale 

performed are those neither as we classified re-measured held-for-trading the decommissioning nor designated liability, at which fair value resulted through in revised profit or asset loss. 

was 

After initial values. measurement, US GAAP AFS requires financial that investments periodically are an subsequently evaluation of measured the assumptions at fair value of with the 

unrealized decommissioning gains or losses asset recognized value and as provision OCI until needs the investment to be performed. is derecognized, Since this was at which not performed time, the 

cumulative in prior gain years, or loss this was recognized done as in at other January operating 1, 2016 income and or December expense, 31, or 2016. the investment As a result, is 

determined adjustments to be impaired, were made at which to time, decommissioning the cumulative assets loss is value reclassified and the to provision the consolidated in the respective statement 

of profit years. or loss The in finance oil, exploration costs and and removed producing from properties the OCI. The were Group increased evaluates by US$11,728 its AFS financial as at January assets 

to determine 1, 2016 whether and with the US$ ability 11,729 and intention as at December to sell them 31, in 2016, the near respectively. term is still Additional appropriate. depreciation was 

recognized for US$ 674 as at December 31, 2016 due to changes in useful lives. 


A reclassification of (US$ 2,035) was made to other intangible assets as at January 1, 2016 and 

Recognition December and measurement 

31, 2016 respectively. Furthermore a reclassification of US$ 3,063 and US$ 3,071 was 

Financial made liabilities from are investment classified, in at initial joint ventures recognition, as as at financial January liabilities 1, 2016 at and fair value December through 31, profit 2016 or 

loss, loans respectively. and borrowings, payables, as appropriate. All financial liabilities are recognized initially at fair 


The b. Group’s The refinery financial decommissioning liabilities include assets trade were and other increased payables, by US$ loans 5,970 and and borrowings US$ 4,468 including as at January bank 

overdrafts. 1, 2016 and December 31, 2016 respectively. Marketing assets amounting to US$ 314 relating to 

the asset type other property, plant and equipment were reclassified to refinery assets as at 

Loans and January borrowings 1, 2016 and December 31, 2016 from other property, plant and equipment assets. The 

This is depreciation the category included most relevant in cost of to sales the Group. was also After decreased initial recognition, with US$ 321 interest as at December bearing loans 31, 2016 and 

borrowings due are to a subsequently change in useful measured life of certain at amortized PPE asset cost categories. using the EIR method. Gains and losses are 


through c. Other EIR PPE amortization assets decreased process. Amortized by (US$ cost 3,394) is calculated and (US$ by 2,211) taking as into at account January any 1, discount 2016 and or 

premium December on acquisition 31, 2016 and respectively. fees or costs The that adjustment are an integral as at January part of the 1, 2016 EIR. of The (US$ EIR 2,249) amortization was done is 

included due in finance to the sale costs of in a the parcel consolidated of land to a statement related party, of profit N.V. or Energie loss. This Bedrijven category Suriname generally (N.V. applies EBS) to 

interest-bearing 2014. loans Staatsolie and borrowings. settled the receivable with GoS through the dividend payable. As of today, the 

transfer of the asset has not yet been finalized. Furthermore, the power plant decommissioning 

m. assets Inventories were adjusted for (US$ 831) as at January 1, 2016 and December 31, 2016 respectively. 

Petroleum Marketing products assets are valued amounting at the lower to (US$ of cost 314) and were net reclassified realizable value. to refinery assets as at January 1, 

2016 and December 31, 2016. The depreciation in cost of sales was also increased with US$ 201 


as at December 31, 2016 due to changes in the useful life of certain PPE assets. Furthermore 


GOw2 assets were decreased as at December 31, 2016 due to the effects of currency translation 

Finished adjustments goods and work for (US$865) in progress: with the corresponding entry through cost of sales 


2. The operating amortization capacity of but other excluding intangible borrowing assets costs was adjusted for (US$ 2,426) and (US$ 1,629) as at 

January 1, 2016 and December 31, 2016 respectively to present the amortization in the years they relate 

Page 62 

Page 72






(continued) 


to (see also note 22). The corresponding entries were recorded through retained earnings and general 


and administrative cost respectively. Moreover oil, exploration and producing properties were 


reclassified for US$ 2,035 (see note 1a above). 


3. appropriate Restricted proportion cash and cash of depreciation, and short term depletion deposits and amortization and overheads based on normal 

a. operating In accordance capacity, determined with US GAAP on a ASC weighted 210 average and IAS basis. 1, cash held in bank accounts which have legal 

The restrictions net realizable that value prevent of crude its general oil and use refined also may products be considered is based on restricted. the estimated Staatsolie selling has price restricted in the 

ordinary cash course for a period of business, longer less than the a year estimated which costs should of be completion classified and as non-current the estimated assets. costs This necessary was not to 

make done the previously, sale. therefore the Group reclassified those amounts from “cash and short term deposits” 

as current assets to “restricted cash” as non-current assets for US$ 14,412 and US$ 11,850 as at 


January 1, 2016 and December 31, 2016 respectively. In addition, Staatsolie has restricted cash for a 

period shorter than a year for US$ 6,444 and US$ 7,370 as at January 1, 2016 and December 31, 

Pipeline fill 

2016 respectively which should be identified within the consolidated statement of financial position, 


therefore the Group reclassified those amounts from “cash and short term deposits” to “restricted 


cash” within the current assets. 



b. In addition, cash and short-term deposits as at January 1, 2016 and December 31, 2016 was reduced 


by (US$ 2,576). This adjustment included a reclassification of US$ 750 from prepayments and other 


current assets (see note 8) to cash and an adjustment of (US$ 3,326) to profit and loss due to a 

system conversion error during the migration process from the previous accounting software to SAP. 



4. If any Investments indication in exists, joint venture or when decreased annual impairment by US$ 3,063 testing as for at January asset 1, is 2016 required, and December the Group estimates 31, 2016, 

because 

the asset’s 

the 

recoverable 

capital investment 

amount. 

of POC 

An asset’s 

has been 

recoverable 

reclassified 

amount 

to oil, 

is 

exploration 

the higher 

and 

of 

producing 

an asset’s 

properties 

or cash 

(see generating note 1a). units (CGU) fair value less costs of disposal and its value in use. It is determined for an 


5. from Deferred other assets tax liability or groups was recalculated of assets. Where based the on carrying the adjustments amount of and an separately asset or CGU disclosed exceeds under its 

section recoverable 3.3. amount, the asset is considered impaired and is written down to its recoverable amount. In 


Deferred discount tax rate asset that was reflects recalculated current and market separately assessments disclosed of under the time section value 3.3. of money and the risks 

6. 


7. 

into 

Trade 

account. 

receivables 

If no such 

decreased 

transactions 

by US$ 

can be 

360 

identified, 

and US$ 

an 

6,728 

appropriate 

as at January 

valuation 

1, 

model 

2016 

is 

and 

used. 

December 31, 

2016 respectively. The adjustment as at January 1, 2016 and as at December 31, 2016 included the 


down payments received from customers amounting to US$ 971 transferred from accrued liabilities and a 


cash payment from our subsidiary POC amounting to (US$ 1,329) reclassified from trade receivables to 


prepayments and other current assets. As at December 31, 2016 adjustments were made to increase the 


provision for doubtful accounts by (US$ 5,094), reclassify US$ 1,201 to prepayment and other current 

Page 63 

Page 73


74 




(continued) 


(continued) 


assets and record a GOw2 currency translation effect resulting in an increase of US$ 188. Furthermore 

AFS intercompany financial adjustments investments were include made equity resulting and debt in a securities. decrease of Equity US$ 261 investments as at December classified 31, as 2016. availablefor-sale 


After 8. Prepayments initial measurement, and other current AFS financial assets were investments adjusted are for (US$ subsequently 8,973) and measured (US$ 23,915) at fair as value at January with 

unrealized 1, 2016 and gains December or losses 31, recognized 2016 respectively. as OCI The until adjustment the investment as at is January derecognized, 1, 2016 and at which December time, the 31, 

cumulative 2016 includes gain a reclassification or loss is recognized of (US$ 750) in other to cash operating and short income term deposits or expense, (see note or the 3b), investment a write-off for is 

determined (US$ 2,211) to regarding be impaired, prepayments at which time, in previous the cumulative years relating loss is to reclassified procurement to the of goods consolidated and services statement and 

reclassification of profit or loss in for finance a cash costs payment and removed from trade from receivables the OCI. The amounting Group evaluates to US$ 1,329 its AFS (see financial note 7). assets The 

adjustments to determine whether as at January the ability 1, and 2016 intention also to includes sell them a in reclassification the near term is to still equity appropriate. of US$ 2,707, a 

reclassification of the investments in the Uitkijk project of US$ 11,040 to projects in progress and the 

reclassification (ii) Financial liabilities from loan receivables amounting US$ 992. 

The Recognition adjustment and measurement at December 31, 2016 relates to a reclassification adjustment for (US$ 5,348), a 

reclassification Financial liabilities of the are provision classified, for at sales initial tax recognition, and wage as tax financial from long-term liabilities liabilities at fair value totaling through (US$ profit 5,082) or 

(see loss, note loans 15) and and borrowings, a reclassification payables, of US$ as appropriate. 805 from prepayments All financial to liabilities loan receivables. are recognized initially at fair 



9. Staatsolie recognized provisions for decommissioning its production field and related facilities, the 

overdrafts. 

refinery and the power plant on the basis of discounted expected expenditures. US GAAP requires 

periodic evaluations of the assumptions used to determine the decommissioning provision. As the 


evaluation was not performed recently, it was done for fiscal years 2015 and 2016. As a result, 


adjustments were made to the decommissioning provision in the respective years. The provision for the 


production field and related facilities decreased by (US$ 39,773) and (US$ 39,836) as at January 1, 2016 


and December 31, 2016 respectively. The refinery provision was decreased by (US$ 207) as at January 


1, 2016. The power plant provision decreased by (US$ 1,740) and (US$ 1,880) as at January 1, 2016 and 


December 31, 2016 respectively. 



10. Employee benefit liabilities 

Under US GAAP, Staatsolie only recognized liabilities for the following employee benefits: 1) employee 


pension plan, 2) executive pension plan and 3) retirees medical plan. No provision was recorded in prior 


years for Staatsolie, SPCS and GOw2 for other employee benefits such as jubilee, gratuity, funeral grant 

gratuity, Raw materials: additional holiday allowances and executive excedent gratuities. The adjustment to record the 

provision • Purchase for these cost is other valued employee on weighted benefits average for Staatsolie method amounted to US$ 11,892 and US$ 12,772 as at 

January 

Finished 

1, 

goods 

2016 

and 

and 

work 

December 

in progress: 

31, 2016 respectively. Additionally, the directors insured pension plan 

was increased as at December 31, 2016 by US$ 601 due to a change in the assets of this plan. The 


adjustments for the other employee liabilities of SPCS amounted to US$ 287 and US$ 508 as at January 


1, 2016 and December 31, 2016 respectively. GOw2 only operates jubilee gratuity and retirees medical 

Page 62 

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(continued) 


plans. Adjustments of US$ 893 and US$ 513 were made as at January 1, 2016 and December 31, 2016 


respectively to record the provision related to the GOw2 employee benefit plans. 


11. The The cost accruals of crude and oil other and liabilities refined products were (decreased) is the purchase / increased cost, by the (US$ cost 2,509) of refining, and US$ including 1,743 as the at 

January appropriate 1, 2016 proportion and December of depreciation, 31, 2016, depletion respectively. and The amortization decrease and of (US$ overheads 2,509) relates based primarily on normal to 

the operating settlement capacity, of the determined liability for on the a weighted land that average was sold basis. to EBS NV (see note 1c). The net increase of 

US$ 

The net 

1,743 

realizable 

as at December 

value of crude 

31, 2016 

oil and 

relates 

refined 

to an 

products 

increase 

is 

in 

based 

GOw2 

on 

of 

the 

US$ 

estimated 

1,532 relating 

selling 

to 

price 

currency 

in the 

translation 

ordinary course 

adjustment 

of business, 

coupled 

less 

with 

the estimated 

a reduction 

costs 

in 

of 


completion 

and 

and 

SPCS 

the estimated 

of US$ 61 

costs 

and 

necessary 

US$ 222 

to 

respectively 


related to a reclassification. Furthermore an adjustment was made related to an under 

accrual of personnel costs which resulted in an increase of US$ 492 which was recognized in general and 


administrative expenses. 

Pipeline fill 

12. Income tax expense and the related income tax payable was recalculated for the adjustments made 


and separately disclosed in section 3.3. 



13. Inventories (namely materials and supplies) decreased as at December 31, 2016 by (US$ 1,273) due 


to the fact that import and transportation costs that were not attributable to purchased materials were 

expensed. deemed to This be an was item recorded of property, in other plant income and / equipment expenses. cannot be separated physically from the rest of 


14. The short-term investment in shares of Hakrinbank and Assuria increased by US$ 40 as at December 


31, 2016 due to revaluations. 



15. Reclassification of the provision for sales and wage tax amounting to US$ 5,082 from other long-term 


liabilities to prepayments and other current assets as at December 31, 2016. 



16. Trade payables increased as at December 31, 2016 by US$ 4,624 due to a write-off of a down 


payment to a vendor of US$ 1,277, increase due to intercompany adjustments of US$ 4,206 and the 


effects of currency translation adjustment of GOw2 resulting in a decrease of (US$ 860). The 



corresponding entries as it relates to the write down of payments to vendor and intercompany adjustment 

were recorded through other income / expenses whereas the currency adjustment was recorded through 


general and administrative expenses. 


17. 

Impairment 

Consolidated 

losses 

statement 

of continuing 

of profit 

operations 

or loss presentation 

are recognized in the consolidated statement of profit or loss 

Converting in those expense the presentation categories of consistent the US GAAP with the audited function statement of the of impaired profit or asset, loss from except a presentation for a property by 

“nature” previously to a revalued presentation where by the “function” revaluation caused was the taken majority to of OCI. the amounts In this case, in the the “re-statement” impairment column. is also 

These recognized adjustments in OCI up do to not the have amount any impact of any previous on the profit revaluation. or loss for the year. 

Page 

Page 

75 

63


76 





(continued) 


18. Cost of sales 

Apart AFS financial from the investments profit or loss include presentation equity and reclassifications debt securities. (see Equity note investments 17), there classified was a decrease availablefor-sale 

are to the those refinery neither expenses classified amounting as held-for-trading to US$ 3,855. nor designated Furthermore at fair there value was through an increase profit or in loss. the 

with 

regards 

production After initial expenses measurement, of US$ AFS 1,957. financial The corresponding investments entries are subsequently for both items measured were recorded at fair through value cost with 

of unrealized sales. gains or losses recognized as OCI until the investment is derecognized, at which time, the 


19. determined Other income to be impaired, / expense at which time, the cumulative loss is reclassified to the consolidated statement 

The of profit decrease or loss of in US$ finance 389 costs relates and to removed a profit of from US$ the 2,742 OCI. in The SurGold Group GoS evaluates share and its AFS a (US$ financial 3,131) assets loss 

caused to determine by a write-off whether of the freight ability costs and intention and uncollectable to sell them down in the payments. near term There is still was appropriate. also a reclassification 

of foreign exchange gains of US$ 12,905 from finance cost to other income / expenses in 2016. 


20. Selling and distribution costs 


The increase of US$ 3,077 was mainly caused by a provision made for doubtful accounts for 


prepayments to vendors. The total provision made as at December 31, 2016 amounted to US$ 3,699. 



21. The Other Group’s operating financial expenses liabilities include trade and other payables, loans and borrowings including bank 

The overdrafts. major part of the other operating expenses was reclassified to “Cost of sales”. 

22. Loans General and borrowings and administrative expenses 

Within This is this the category the most Group relevant had a to release the Group. of a provision After initial with recognition, regards to study interest grants bearing of US$ loans 1,413. and 

The borrowings other changes are subsequently to general and measured administrative at amortized expenses cost were using mentioned the EIR method. above. Gains and losses are 


23. through Finance the EIR income amortization and costs process. Amortized cost is calculated by taking into account any discount or 

The premium increase on acquisition in finance income and fees of or US$ costs 30 is that caused are an by integral the currency part of translation the EIR. adjustment The EIR amortization from GOw2. is 

The included increase finance finance costs cost in the is caused consolidated by the statement accretion of expense profit or of loss. the This dismantlement category generally assets amounting applies to 

to interest-bearing US$ 6,516. In loans addition, and borrowings. there was an increase in finance cost due to the reclassification of foreign 

currency gains to other income / expenses of US$ 12,905 in 2016. 


24. Petroleum Pensions products and other are postretirement valued at the lower benefits of cost – other and comprehensive net realizable value. income 

The restatement of US$ 4,396 in 2016 relates to evaluation of the pension plans and the introduction of 


the actuarial evaluation of other long term employee benefits such as jubilee plan, funeral grant plan, 


additional holiday allowance and pension gratuity plan. The other long term employee benefits plans are 

also Finished new goods for the and subsidiaries work in progress: SPCS and GOw2. The tax effect of US$ 1,162 is the 32.4% tax impact on 

the • restatement Cost of direct amount materials of US$ and 4,396 labor and and the a effect proportion of the of adjustment manufacturing of the overheads tax rate from based 36% on to 32.4% normal 

on the operating total unrealized capacity (gains) but excluding and losses borrowing on the costs short term investments. 

Page 

Page 

76 

62






(continued) 


25. Unrealized (gains) and losses short-term investments 


The adjustment of US$ 43 relates to stock-dividend that was received on Hakrinbank shares. 


Furthermore the tax of US$ 114 relates to the effect of the adjustment of the tax rate from 36% to 32.4%. 


26. appropriate Currency proportion translation of adjustment depreciation, GOw2 depletion and amortization and overheads based on normal 

The operating adjustment capacity, of determined US$ 12,147 on relates a weighted to revaluation average basis. that was performed. Effective January 1, 2016, 

GOw2’s The net realizable functional value currency of crude changed oil and to SRD, refined however products this is change based on was the not estimated accurately selling reflected price in in the 

previously ordinary course reported of business, 2016 consolidated less the estimated financial costs statements of completion and accordingly and the estimated the amounts costs necessary have been to 

restated. make the sale. 


27. Projects in progress 

The Group made a reclassification of the investment in the Uitkijk project from prepayments and other 

Pipeline fill 

current assets to projects in progress as at January 1, 2016 and December 31, 2016 for US$ 11,040 and 


US$ 11,047, respectively. 


The necessary Weg naar to the Zee operation exploration of project a facility was during evaluated more as than at December one operating 31, 2016. cycle, Based and its on cost this cannot evaluation be 

the recouped decision through was taken sale (or to impair is significantly this exploration impaired). project. This This applies resulted even in if a the decrease part of in inventory the projects that in is 

progress deemed to and be an an increase item of property, in exploration plant and expenses equipment of US$ cannot 5,030 be as separated at December physically 31, 2016. from Projects the rest of in 

progress inventory. of It is GOw2 valued has at cost been and decreased is depreciated by US$ over 4,394 the useful due to life the of the effects related of asset. the currency translation 

adjustment. 


28. The Loan Group Receivable assesses short-term at each reporting date whether there is an indication that an asset may be impaired. 

The If any outstanding indication exists, receivable or when relates annual to the impairment transmission testing line for phase an asset 1 that is required, one was the constructed Group estimates for the 

related the asset’s party recoverable EBS, which amount. was financed An asset’s by Staatsolie. recoverable From tThe amount outstanding is the higher loan receivable of an asset’s balance or cash US$ 

992 generating was reclassified units (CGU) to prepayments fair value less at January costs of 1, disposal 2016 and and US$ its 805 value was in reclassified use. It is determined from prepayments for an 

to individual loan receivables asset, unless short-term the asset at does December not generate 31, 2016. cash inflows that are largely independent of those 


The recoverable following amount, IFRS conversion the asset adjustments is considered were impaired made and (in US$ is written thousands). down to its recoverable amount. In 

A assessing Property, value plant in use, and equipment the estimated future cash flows are discounted to their present value using a pretax 

i. discount An evaluation rate that of reflects the decommissioning current market assessments assets was performed of the time under value IFRS1 of money and the and Group the risks remeasured 

to the asset. the In decommissioning determining fair value liability, less which costs resulted of disposal, in revised recent market asset values. transactions The production are taken 

specific 

into account. field If and no such related transactions facilities can decommissioning be identified, an assets appropriate were valuation adjusted model for (US$ is used. 36,276) as at 

December 31, 2016; no remeasurement was needed as at January 1, 2016. The refinery 


decommissioning assets were adjusted for (US$ 2,047) and (US$ 3,611) as at January 1, 2016 


and December 31, 2016 respectively. The power plant decommissioning assets were adjusted for 


(US$ 277) and (US$ 109) as at January 1, 2016 and December 31, 2016 respectively. 


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78 





(continued) 


ii. On assessing the useful lives of the refinery assets a different depreciation method between IFRS 

AFS financial and US investments GAAP was include identified. equity IFRS and requires debt securities. a component Equity depreciation investments approach classified if as components availablefor-sale 

of are an those asset neither have classified differing as patterns held-for-trading of benefit, nor whereas designated US GAAP at fair value allowed through depreciation profit or on loss. a 

After initial straight measurement, line basis. The AFS component financial depreciation investments approach are subsequently requires that measured each part at of fair an value asset item with 

unrealized with gains a cost or losses that is recognized significant in as relation OCI until to the the investment total cost is of derecognized, the item should at which be depreciated time, the 

cumulative separately. gain or Under loss is US recognized GAAP a weighted in other average operating of the income useful or lives expense, of the or different the investment components is 

determined was to calculated be impaired, (23.25 at which years). time, In addition, the cumulative the turnaround loss is reclassified and inspections to the consolidated (T&I) is scheduled statement in 

of profit 2019 or loss which in finance led to costs accelerated and removed depreciation from the for OCI. the assets The Group which evaluates will be replaced. its AFS financial The net impact assets 

to determine is that whether accumulated the ability and depreciation intention to amounting sell them in to the US$ near 1,176 term as is at still January appropriate. 1, 2016 and US$ 

1,534 as at December 31, 2016 were released to the profit and loss/retained earnings. 


iii. The “projects in progress” balance was transferred to the individual property, plant and equipment 


categories as follows: oil, exploration and production properties US$ 156,837, refining properties 


US$ 27,426 and other properties and equipment for US$ 31,952 as at January 1, 2016. As at 


December 31, 2016, the transferred balances amounted to US$ 131,058 to oil, exploration and 


production properties, US$ 959 to refining properties and US$ 840 to other properties and 


equipment. This reclassification is made for the consolidated financial statement disclosure 

overdrafts. 

purposes. 


B. This Investments is the category in associate most relevant and joint to venture the Group. After initial recognition, interest bearing loans and 

borrowings i. Under are US subsequently GAAP, Staatsolie measured previously at amortized accounted cost using for its the 25% EIR interest method. in Gains the Suriname and losses Gold are 

recognized Project in the CV consolidated (Surgold), statement as a qualifying of profit asset or loss at when net equity the liabilities value, comprising are derecognized of the as purchase well through consideration the EIR amortization and capitalized process. financing Amortized costs. is Under calculated the requirements by taking into of account IFRS, the any investment discount or in 

premium Surgold on acquisition classified and as fees a financial or costs asset, that are which an integral is not a qualifying part of the asset EIR. per The IAS EIR 23 amortization and therefore is 

included the in finance costs in are the not consolidated allowed to statement be capitalized. of profit Accordingly, loss. This the category capitalized generally finance applies cost of to 

interest-bearing US$ 7,529 loans and and US$ borrowings. 12,827 as at January 1, 2016 and December 31, 2016 respectively were 

written-off through profit and loss in the respective periods. 


ii. Furthermore, Newmont Mining Corporation, the controlling-interest party in Surgold, performed a 


US GAAP to IFRS conversion assessment on its subsidiary Surgold. This assessment resulted in 

Raw materials: a slightly different IFRS net income compared to US GAAP. Consequently, Staatsolie adjusted its 

• Purchase profit share cost is for valued its investment on weighted in Surgold, average resulting method in a loss of US$ 13 as at January 1, 2016 and 

Finished a goods loss of and US$ work 7 as in at progress: December 31, 2016. 


C. Inventories 


The primary basis of accounting for inventory is cost under both US GAAP and IFRS. As such there are 

no differences in cost valuation. Due to convergence, US GAAP measured Inventories similar to IFRS at 

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(continued) 


lower of cost and net realizable value (NRV) by issuing AS 2015-11. However, before 2017, Inventories 


are carried at the lower of cost or market (LCM) per US GAAP, whereas under IFRS, Inventories are 


carried at the lower of cost or NRV. US GAAP defined market as current replacement cost as long as 

market The cost is not of crude greater oil than and NRV refined (estimated products selling is the price purchase less reasonable cost, the costs cost of of completion, refining, including disposal and the 

transportation) appropriate proportion and is not of less depreciation, than NRV depletion reduced by and a normal amortization sales margin. and overheads As at January based 1, on 2016, normal the 

carrying operating value capacity, at cost determined according on to a IFRS weighted was average slightly higher basis. than the cost under US GAAP, therefore an 

increase The net realizable of US$ 885 value was of made crude to the oil and inventory refined balance. products is based on the estimated selling price in the 


D. Provisions 


IAS 37 outlines the accounting for provisions together with contingent assets and contingent liabilities to 

ensure Materials that and provisions supplies are are valued recognized using the only weighted when (i) average there is cost a present method. obligation resulting from past 

events, (ii) payment is probable and (iii) the amount can be estimated reliably. 

Pipeline fill 


Based on the above mentioned criteria, the following provisions resulted in re-measurements under IFRS: 


necessary i. Staatsolie to the has operation recognized of provisions a facility during for decommissioning more than one its operating production cycle, field and and its related cost cannot facilities, be 

recouped the refinery through and sale the (or power is significantly plant on the impaired). basis of This discounted applies even expected if the expenditures. part of inventory Differences that is 

deemed between to be IFRS an item and of US property, GAAP plant arose and because equipment of differences cannot be in separated the treatment physically of changes from the in rest cost of 

inventory. estimates It is and valued discount at cost rates and is associated depreciated with over the the decommissioning useful life of the liability. related The asset. production field and 

related facilities provision was reduced by (US$ 3,518) as at January 1, 2016 and (US$ 35,628) in 

2016. n. The Impairment refinery provision of non-financial was adjusted assets for (US$ 2,047) as at January 1, 2016 and (US$ 3,822) in 

The 2016. Group The assesses power at plant each provision reporting was date adjusted whether for there (US$ is 277) an indication as January that an 1, asset 2016 may and (US$ be impaired. 144) in 

If any 2016. indication exists, or when annual impairment testing for an asset is required, the Group estimates 


generating ii. A refinery units construction (CGU) fair claim value was less settled costs by of arbitrage disposal (Arbitral and its value Tribunal) in use. in 2017 It is with determined Ballast Nedam for an 

individual Infra Suriname asset, unless (BNIS) the for asset an amount does not of US$ generate 12,947. cash Under inflows US that GAAP are requirements, largely independent the claim of which those 

from originated other assets in fiscal or groups year 2015 of assets. was defined Where as “likely”, the carrying and accordingly amount of no an provision asset or was CGU recognized exceeds as its 

recoverable at January amount, 1, 2016. the asset Under is IFRS considered the claim impaired was and defined is written as probable down to and its recoverable a provision amount. should be In 

assessing recognized. value An in use, adjustment the estimated was made future at cash January flows 1, are 2016 discounted and December to their 31, present 2016 for value US$ using 1,600 a with pretax 

a discount credit to rate provision that reflects and debit current to retained market assessments earnings. As of at the December time value 31, of 2016, money this and amount the risks was 

specific shown to the as a asset. current In liability determining because fair value this case less was costs settled of disposal, in fiscal recent year 2017. market transactions are taken 


iii. GOw2 accounted for its environmental provision in accordance with US GAAP at the expected value 


of future cash outflows. The expected value was not discounted to present value, because the time 


horizon in which the environmental cleanup was planned to be completed was one-to-two years. 


During the IFRS conversion, the time horizon was revised and therefore the provision was properly 


discounted, using real discount rates, as the expenditures are not expected to be incurred for some 

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80 




(continued) 


(continued) 


time. The provision was decreased and released to the retained earnings as at January 1, 2016 for 

AFS US$ financial 577. investments In 2016 the provision include equity increased and debt with securities. finance charges Equity for investments US$ 149 recorded classified through as availablefor-sale 

and are loss. those neither classified as held-for-trading nor designated at fair value through profit or loss. 

profit 


E. unrealized Employee gains defined or losses benefit recognized liabilities as OCI until the investment is derecognized, at which time, the 

IAS cumulative 19 Employee gain or Benefits loss is outlines recognized the accounting other operating requirements income for employee or expense, benefits, or the including investment short- 

is 

determined benefits, to be post-employment impaired, at which benefits time, the such cumulative as retirement loss is reclassified benefits, other to the long-term consolidated benefits statement and 

termination of profit or loss benefits. in finance The standard costs and establishes removed from the the principle OCI. The that Group the cost evaluates of providing its AFS employee financial benefits assets 

should to determine be recognized whether the in the ability period and in intention which the to sell benefit them is in earned the near by term the employee, is still appropriate. rather than when it is 

paid or payable, and outlines how each category of employee benefits are measured, providing detailed 

guidance (ii) Financial particular liabilities about post-employment benefits. 


Based Financial on liabilities the above are mentioned classified, criteria, at initial the recognition, following provisions as financial resulted liabilities in re-measurements at fair value through under profit IFRS: or 


i. Under both US GAAP and IFRS, Staatsolie maintained the following post-employment benefit plans: 


1) employee pension plan, 2) directors insured pension plan and 3) retirees medical plan. The 


calculation of this provision is based on an actuarial evaluation. IAS 19 Employee benefits requires 

overdrafts. 

actuarial evaluation of these long-term benefits which included a number of variables such as 

discount rate assumptions and accounting for actuarial gains and losses. The application of IAS 19 


resulted in a decrease in the defined benefit obligation as at January 1, 2016 by US$ 2,443 which is 


recognized through retained earnings. 


recognized ii. In addition, in the the consolidated discount rate statement used in of calculating profit or loss the when jubilee the plan liabilities benefits, are derecognized differs between as the well two as 

through accounting the EIR standards. amortization This process. resulted Amortized in an increase cost is in calculated the provision by taking of US$ into 540 account as at January any discount 1, 2016 or 

premium and US$ on acquisition 552 as at December and fees or 31, costs 2016. that These are amounts an integral were part released of the EIR. to the The profit EIR and amortization loss/retained is 

included earnings. 

finance costs in the consolidated statement of profit or loss. This category generally applies to 


iii. Lastly, the power plant (SPCS) employee savings fund balance of US$ 221 as at December 31, 2016 

was m. reclassified Inventories out of employee defined benefits liabilities to accruals and other liabilities. 


F. Income tax 


Income tax (expenses) / income and deferred tax asset / liability was recalculated and separately 


disclosed under section 3.3. 


G. • Cost Hyperinflation of direct accounting materials and labor and a proportion of manufacturing overheads based on normal 

Suriname operating has capacity been identified but excluding as a hyperinflationary borrowing costs economy based on the three year cumulative inflation 

rates of 98% and 108%, measured at year end 2016 and 2017 respectively. Other hyperinflationary 

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(continued) 


(continued) 


characteristics of the economic environment were identified, such as (i) the general population regards 


monetary amounts in terms of a relatively stable foreign currency as prices are often quoted in stable 


foreign currency, (ii) sales and purchases on credit take place at prices that compensate for the expected 

The loss of cost purchasing of crude power, oil and and refined (ii) the products general is population the purchase prefers cost, to keep the wealth cost of in refining, non-monetary including assets the 

appropriate or in a relatively proportion stable foreign of depreciation, currency. depletion and amortization and overheads based on normal 


The functional currency of GOw2, a wholly owned subsidiary of Staatsolie, is the Surinamese dollar, 

The therefore net realizable the non-monetary value of crude assets oil and and liabilities refined of products GOw2 had is based to be revalued. on the estimated IAS 29 Financial selling price Reporting 

the 

ordinary Hyperinflationary course of business, Economies less requires the estimated management costs of to completion restate the and financial the estimated statements costs of entities necessary whose to 

make functional the sale. currency is the currency of a hyperinflationary economy, into the current purchasing power at 

the balance sheet date. The restatements resulted in an increase in PPE amounting to US$ 2,252, an 


increase in shared premiums of US$ 755 and a monetary gain of US$ 1,497 as at December 31, 2016 

which is recognized in the consolidated statement of profit or loss. 

Pipeline fill 


H. Income tax payable was recalculated for IFRS conversion adjustments (see section 3.3). 



I. Under US GAAP (ASC 715) the actuarial gains / losses for other long-term benefit plans are 


recognized as other comprehensive income, while that differs per IAS 19 under IFRS. Because the 


measurement of other long-term employee benefits is not usually subject to the same degree of 


uncertainty as the measurement of post-employment benefits, the actuarial gains / losses are recorded in 

the consolidated statement of profit or loss. This difference in treatment led to a conversion adjustment of 


the jubilee and additional holiday allowance plans under IFRS of US$610 and US$508 respectively as at 


December 31, 2016. The total adjustment amounted to US$1,118 gross of 32.4% deferred tax and the tax 


impact amounted to US$362 which are both recognized in the consolidated statement of profit or loss. In 


addition, prior service cost of US$602 for the executive pension plan of 2016 is included in the OCI under 


US GAAP while that is not the case under IFRS. The tax impact is 32.4% equaling to US$ 195. 












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82 




(continued) 


(continued) 


2.5 Significant accounting judgments, estimates and assumptions 



The preparation of the Group’s consolidated financial statements requires management to make 

judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets 


and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty 


about these assumptions and estimates could result in outcomes that require a material adjustment to the 


carrying amount of asset or liability affected in future periods. 


of 

Judgments 

profit or loss in finance costs and removed from the OCI. The Group evaluates its AFS financial assets 

to 

In 

determine 

the process 

whether 

of applying 

the ability 

the 

and 

Group’s 

intention 

accounting 

to sell them 

policies, 

in the near 

management 

term is still appropriate. 

has made the following 

judgments, which have the most significant effect on the amounts recognized in the consolidated financial 

(ii) 

statements: 

Financial liabilities 


Operating lease commitments — group as lessee 


The Group has entered into commercial car and vessel leases. The Group has determined, based on an 


evaluation of the terms and conditions of the arrangements, such as the lease term not constituting a 


substantial portion of the economic life of the cars and vessels, and the present value of the minimum 


lease payments not amounting to substantially all of the fair value of the cars and vessels, that it does not 

overdrafts. 

retain all the significant risks and rewards of ownership of these cars and vessels, and accounts for the 

contracts as operating leases. 


This 

Investment 

is the 

in 

category 

Joint Venture 

most relevant to the Group. After initial recognition, interest bearing loans and 

borrowings 

Judgment is 

are 

required 

subsequently 

to determine 

measured 

when 

at 

the 

amortized 

Group has 

cost 

joint 

using 

control 

the 

over 

EIR 

an 

method. 

arrangement, 

Gains and 

which 

losses 

requires 

are 

recognized 

an assessment 

in the 

of 

consolidated 

the relevant 

statement 

activities 

of 

and 

profit 

when 

or loss 

the decisions 

when the liabilities 

in relation 

are 

to 

derecognized 

those activities 

as well 

require 

as 

through 

unanimous 

the 

consent. 


The Group 

process. 

has determined 

Amortized 

that 

cost 

the 

is calculated 

relevant activities 

by taking 

for 

into 

its 

account 

joint arrangements 

any discount 

are 

or 

premium 

those relating 

on acquisition 

to the operating 

and fees 

and 

or 

capital 

costs that 

decisions 

are an 

of 

integral 

the arrangement, 

part of the EIR. 

including 

The 

the 

EIR 

approval 

amortization 

of the 

is 

included 

annual capital 

in finance 

and 

costs 

operating 

in the 

expenditure 

consolidated 

work 

statement 

program 

of profit 

and budget 

or loss. 

for 

This 

the 

category 

joint arrangement, 

generally applies 

and the 

to 


approval of chosen 

loans 

service 


providers for any major capital expenditure as required by the joint operating 

agreements applicable to the entity’s joint arrangements. The considerations made in determining joint 

control are 

m. 

similar 

Inventories 

to those necessary to determine control over subsidiaries, as set out in Note 2.3b. 

Petroleum 

Judgment is 

products 

also required 

are valued 

to classify 

at the 

a 

lower 

joint 

of 

arrangement. 

cost and net 

Classifying 

realizable value. 

the arrangement requires the Group 

Raw to assess materials: their rights and obligations arising from the arrangement. Specifically, the Group considers: 

• Purchase • The structure cost is valued of the joint on weighted arrangement average – whether method it is structured through a separate vehicle 

Finished • When goods the and arrangement work in progress: is structured through a separate vehicle, the Group also considers the 

• Cost 

rights 

of direct 

and obligations 

materials and 

arising 

labor 

from: 

and a proportion of manufacturing overheads based on normal 

operating 

- 

capacity 

The legal 

but 

form 

excluding 

of the 

borrowing 

separate vehicle 

costs 

- The terms of the contractual arrangement 

- Other facts and circumstances, considered on a case by case basis 

Page 62 

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(continued) 


This assessment often requires significant judgment. A different conclusion about both joint control and 


whether the arrangement is a joint operation or a joint venture, may materially impact the accounting 


treatment. 


Estimates appropriate and proportion assumptions of depreciation, depletion and amortization and overheads based on normal 

The operating key assumptions capacity, determined concerning a the weighted future average and other basis. key sources of estimation uncertainty at the 

reporting The net realizable date, that value have of a crude significant oil and risk refined of causing products a material is based adjustment on the estimated to the carrying selling amounts price in the of 

assets ordinary and course liabilities of business, within the less next the financial estimated year, costs are of described completion below. and The the Group estimated based costs its necessary assumptions to 

and make estimates the sale. on parameters available when the consolidated financial statements were prepared. 

Existing circumstances and assumptions about future developments, however, may change due to 


market changes or circumstances arising beyond the control of the Group. Such changes are reflected in 

the assumptions when they occur. 

Pipeline fill 


Functional currency 


The functional currency for the parent entity and each of its subsidiaries, is the currency of the primary 


economic environment in which the entity operates. The functional currency for GOw2 is Surinamese 


dollar (SRD). The functional currency of Staatsolie, SPCS and Ventrin is the US dollar (US$). 


Determination of functional currency may involve certain judgements to identify the primary economic 


environment and the parent entity reconsiders the functional currency of its entities if there is a change in 

events and conditions which determined the primary economic environment. 



Decommissioning liability 


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, estimates of the extent and costs of 


decommissioning activities, the emergence of new restoration techniques or experience at other 


production sites, cost increases as compared to the inflation rates of 3% (2016: 3%), and changes in 



discount rates of 8% (2016: 10%). The expected timing, extent and amount of expenditure may also 

change, for example, in response to changes in oil and gas 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 Impairment losses which of would continuing affect operations future financial are recognized results. The in the provision consolidated reporting statement date of profit represents or loss 

management’s in those expense best categories estimate of consistent the present with value the of function the future of decommissioning the impaired asset, costs except required. for a property 



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84 





(continued) 


Environmental risk liability 

Liabilities AFS financial for environmental investments include costs are equity recognized and debt when securities. a clean-up Equity is investments probable and classified the associated availablefor-sale 

be are reliably those estimated. neither classified Generally, as held-for-trading the timing of recognition nor designated of these at fair provisions value through coincides profit with or loss. the 

costs 

can 

commitment After initial measurement, to a formal plan AFS of action financial or, investments if earlier, on are divestment subsequently or on closure measured of inactive at fair value sites. with The 

amount unrealized recognized gains or is losses the best recognized estimate as of OCI the until expenditure the investment required. is derecognized, If the effect of at the which time time, value the of 

money cumulative is material, gain or the loss amount is recognized in is other present operating value income of the estimated or expense, future or expenditure. the investment is 


Contingent of profit or loss liabilities in finance costs and removed from the OCI. The Group evaluates its AFS financial assets 

Contingent to determine liabilities whether may the ability arise and from intention the ordinary to sell course them in of the business near term in is relation still appropriate. to claims against the 

Group, including legal, contractual and other claims. By their nature, contingencies will be resolved only 

when (ii) Financial one or liabilities more uncertain future events occur or fail to occur. The assessment of the existence, and 

potential Recognition quantum, and measurement 

of contingencies inherently involves the exercise of significant judgment and the use of 

estimates Financial liabilities regarding are the classified, outcome of at future initial events. recognition, as financial liabilities at fair value through profit or 


Recoverability value and, in the of case assets of loans and borrowings and payables, net of directly attributable transaction costs. 

The Group’s assesses financial each liabilities asset include or cash trade generating and other unit payables, (CGU) (excluding loans and goodwill, borrowings which including is assessed bank 

annually overdrafts. regardless of indicators) in each reporting period to determine whether any indication of 

impairment exists. Where an indicator of impairment exists, a formal estimate of the recoverable amount 

is Loans made, and which borrowings is considered to be the higher of the fair value less cost of disposal (FVLCD) and valuein-use 

This is (VIU). the category The assessments most relevant require to the the use Group. of estimates After initial and assumptions recognition, interest such as long-term bearing loans oil prices and 

(considering borrowings are current subsequently and historical measured prices, at amortized price trends cost and using related the EIR factors), method. discount Gains rates, and losses operating are 

costs, recognized future in capital the consolidated requirements, statement decommissioning of profit or costs, loss when exploration the liabilities potential, are derecognized reserves and as operating well as 

performance through the EIR (which amortization includes process. production Amortized and sales cost volumes). is calculated These by taking estimates into account and assumptions any discount are or 

subject premium to on risk acquisition and uncertainty. and fees Therefore, costs there that are is a an possibility integral that part changes of the EIR. in circumstances The EIR amortization will impact is 

these included projections, in finance which costs may in the impact consolidated the recoverable statement amount of profit assets or loss. and/or This category CGUs. generally applies to 


Units of production (UOP) depreciation of oil assets 

Oil properties m. Inventories are depreciated using UOP method over total proved developed and undeveloped 

Petroleum hydrocarbon products reserves. are This valued results at the in lower a depreciation/amortization of cost and net realizable charge value. proportional to the depletion of 

the anticipated remaining production from the field. 






Page 62 

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(continued) 


The life of each item, which is assessed at least annually, has regard to both its physical life limitations 


and 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 The cost of and crude estimates oil and of refined future products capital is expenditure. the purchase The cost, calculation the cost of of refining, the UOP including rate the of 

depreciation/amortization appropriate proportion of will depreciation, be impacted depletion to the extent and amortization that actual production and overheads in the based future is on different normal 

from operating current capacity, forecast determined production on based a weighted on total average proved basis. reserves, or future capital expenditure estimates 

change. The net realizable Changes to value prove of crude reserves oil and could refined arise due products to changes is based in on the the factors estimated or assumptions selling price used in the in 

estimating ordinary course reserves, of business, including: less the estimated costs of completion and the estimated costs necessary to 

make • the The sale. effect on proved reserves of differences between actual commodity prices and commodity 

price assumptions 


• Unforeseen operational issues 

Pipeline fill 

Defined benefit plans (pension benefits) 


The cost of defined benefit pension plans and other post-employment medical benefits and the present 


value of the pension obligation are determined using actuarial valuations. An actuarial valuation involves 


making various assumptions which may differ from actual developments in the future. These include the 


determination of the discount rate, future salary increases, mortality rates and future pension increases. 


Due to the complexity of the valuation, the underlying assumptions and its long-term nature, a defined 


benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at 

each reporting date. 


The Group parameter assesses most subject at each to reporting change date is the whether discount there rate. is In an determining indication that the an appropriate asset may discount be impaired. rate, 

management If any indication considers exists, or the when interest annual rates impairment of government testing for bonds an asset in is currencies required, the consistent Group estimates with the 

currencies the asset’s of recoverable the post-employment amount. An benefit asset’s obligation recoverable with at amount least an is ‘AA’ the higher rating or of above, an asset’s set or by cash an 

internationally generating units acknowledged (CGU) fair value rating less agency, costs of and disposal extrapolated and its as value needed in use. along It is the determined yield curve for an to 

correspond individual asset, with unless the expected the asset term does of the not defined generate benefit cash inflows obligation. that The are underlying largely independent bonds are of further those 

reviewed from other for assets quality. or Those groups having of assets. excessive Where credit the spreads carrying are amount removed of an from asset the analysis or CGU of exceeds bonds on its 

which recoverable the discount amount, rate the is asset based, is on considered the basis impaired that they do and not is represent written down high to quality its recoverable bonds. amount. In 

The assessing mortality value rate in is use, based the on estimated publicly future available cash mortality flows are tables discounted for the specific to their present countries. value Those using mortality a pretax 

discount tend to rate change that only reflects at intervals current in market response assessments to demographic of the changes. time value Future of money salary increases and the risks and 

tables 

pension specific to increases the asset. are In determining based on expected fair value future less costs inflation of disposal, rates for recent the market respective transactions countries. are Further taken 

details into account. about pension If no such obligations transactions are can provided be identified, in Note 4.8. an appropriate valuation model is used. 





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86 





(continued) 


Hydrocarbon reserve and resource estimates 

Hydrocarbon AFS financial reserves investments are estimates include equity of the and amount debt securities. of hydrocarbons Equity that investments can be economically classified as and availablefor-sale 

are from those the neither Group’s classified oil properties. as held-for-trading The Group estimates nor designated its commercial at fair value reserves through and profit resources or loss. 

legally 

extracted 

based After initial on information measurement, compiled AFS by financial appropriately investments qualified are persons subsequently relating to measured the geological at fair and value technical with 

data unrealized on the gains size, or depth, losses shape recognized and grade as OCI of the until hydrocarbon the investment body is and derecognized, suitable production at which techniques time, the 

and cumulative recovery gain rates. or Commercial loss is recognized reserves in are other determined operating using income estimates or expense, of oil in place, or the recovery investment factors is 

and determined future commodity to be impaired, prices, at the which latter time, having the cumulative an impact loss on the is reclassified total amount to of the recoverable consolidated reserves statement and 

the of profit proportion or loss of in the finance gross costs reserves and removed that are from attributable the OCI. to The the Group host government evaluates its under AFS the financial terms assets of the 

production-sharing to determine whether agreements the ability (PSAs). and intention Future to development sell them in the costs near are term estimated is still appropriate. using assumptions as to 

the number of wells required to produce the commercial reserves, the cost of such wells and associated 

production (ii) Financial facilities, liabilities and other capital costs. 

The Recognition economic and tests measurement for the December 31, 2017 reserve volumes were based on a future projection of 

crude Financial oil prices liabilities using are crude classified, oil prices at initial forecasted recognition, by PIRA as Energy financial group liabilities as the at reference fair value price. through profit or 


Average price of actual crude sales and the PIRA price premise for 2017 are the same requiring no 


adjustment for price differential. The same oil price premise was applied for all reserve categories less a 


transfer premium. A shrinkage factor of 1% was also applied to capture losses in delivery of crude to the 

overdrafts. 

refinery. 
















Page 62 

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(continued) 


(continued) 


Average price differential between the PIRA crude price forecast and actual crude price realized by the 


Group in 2016 was US$ 0.24/Bbl. The current long-term PIRA crude oil prices used in the estimation of 


the commercial reserves are listed in the table below. 


appropriate 

Year 

proportion 

US$/Bbl 

of depreciation, depletion and amortization and overheads based on normal 

operating 2018 capacity, 48.74 determined on a weighted average basis. 

2019 44.62 


2020 36.42 


2021 41.00 

make 2022 the sale. 44.26 

2023 47.19 


2024 50.21 

2025 52.88 

Pipeline 2026fill 

55.28 

Crude 2027 oil, which 57.30 is necessary to bring a pipeline into working order, is treated as a part of the related 

pipeline. 2028 This is 59.05 on the basis that it is not held for sale or consumed in a production process, but is 

2029 60.94 


2030 62.65 


2031 64.29 

deemed 2032to be an 65.87 item of property, plant and equipment cannot be separated physically from the rest of 

inventory. 2033 It is valued 67.57 at cost and is depreciated over the useful life of the related asset. 

2034 69.21 

2035n. Impairment 70.88 of non-financial assets 

The 

The carrying 

Group assesses 

amount of 

at 

oil 

each 

properties 

reporting 

at 

date 

December 

whether 

31, 

there 


is 

and 

an indication 

2016 is shown 

that an 

in 

asset 

Note 4.1. 

may be impaired. 















Page 63 

Page 87


88 




(continued) 


(continued) 


As the economic assumptions used may change and as additional geological information is obtained 

AFS during financial the operation investments of a field, include estimates equity of and recoverable debt securities. reserves Equity may investments change. Such classified changes as may availablefor-sale 

the Group’s are reported those neither financial classified position as and held-for-trading results, which nor include: designated at fair value through profit or loss. 

impact 

• After The initial carrying measurement, value of exploration AFS financial and evaluation investments assets; are oil subsequently properties; property, measured plant at and fair equipment; value with 

unrealized and goodwill gains may or losses be affected recognized due to as changes OCI until in estimated the investment future cash is derecognized, flows. at which time, the 

• cumulative Depreciation gain or and loss amortization is recognized charges in other in the operating consolidated income statement or expense, of profit or or the loss investment may change is 

determined where such to be charges impaired, are at determined which time, the using cumulative the UOP loss method, is reclassified or where to the the useful consolidated life of the statement related 

of profit assets or loss change in finance (Note 4.1). costs and removed from the OCI. The Group evaluates its AFS financial assets 

• 

to determine 

Provisions 

whether 

for decommissioning 

the ability and intention 

may require 

to sell 

revision 

them in 

- 

the 

where 

near 

changes 

term is still 

to reserves 

appropriate. 

estimates affect 

expectations about when such activities will occur and the associated cost of these activities (Note 

(ii) Financial 

4.7). 

liabilities 

• Recognition The recognition and measurement and carrying value of deferred tax assets may change due to changes in the 

Financial judgments liabilities regarding are classified, the existence at initial of recognition, such assets as and financial estimates liabilities of at the fair likely value recovery through profit such or 

loss, assets loans (Note and borrowings, 3.3). payables, as appropriate. All financial liabilities are recognized initially at fair 


Deferred The Group’s tax financial liabilities include trade and other payables, loans and borrowings including bank 

overdrafts. Judgment is required to determine which arrangements are considered to be a tax on income as opposed 

to an operating cost. Judgment is also required to determine whether deferred tax assets are recognized 

Loans in the and consolidated borrowings statement of financial position. Deferred tax assets, including those arising from 

This unutilized is the tax category losses, most require relevant the Group to the to assess Group. the After likelihood initial recognition, that the Group interest will bearing generate loans sufficient and 

borrowings taxable earnings are subsequently in future periods, measured in order at amortized to utilize recognized cost using the deferred EIR method. tax assets. Gains Judgment and losses is also are 

recognized required in respect in the consolidated of the application statement of existing of profit tax or laws loss in when each the jurisdiction. liabilities are derecognized as well as 


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, commodity prices, reserves, operating costs, 


closure and rehabilitation costs, capital expenditure, dividends and other capital management 

transactions). To the extent that future cash flows and taxable income differ significantly from estimates, 


the ability of the Group to realize the net deferred 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 

Raw limit the materials: ability of the Group to obtain tax deductions in future periods. 





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(continued) 


Oil properties 


The application of the Group’s accounting policy for exploration and evaluation expenditure requires 


judgment to determine whether future economic benefits are likely from future either exploitation or sale, 

or The whether cost of activities crude oil have and not refined reached products a stage is which the purchase permits a cost, reasonable the cost assessment of refining, of the including existence the 

of appropriate reserves. The proportion determination of depreciation, of reserves depletion and resources and amortization is, in itself, and estimation overheads process based that on involves normal 

varying operating degrees capacity, of determined uncertainty on depending a weighted on average how the basis. resources are classified. These estimates directly 

impact The net when realizable the Group value of defers crude exploration oil and refined and products evaluation is based expenditure. on the estimated The deferral selling policy price requires in the 

management ordinary course to of make business, certain less estimates the estimated and assumptions costs of completion about future and the events estimated and costs circumstances, necessary to in 

particular, make the sale. 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 capitalized, 


information becomes available suggesting that the recovery of the expenditure is unlikely, the relevant 

capitalized amount is written off in the statement of profit or loss in the period when the new information 

Pipeline fill 

becomes available. 




2.5.1 Changes in accounting policies and disclosures 


New deemed and to amended be an item standards of property, and plant interpretations and equipment cannot be separated physically from the rest of 

The inventory. Group It applied is valued for at the cost first and time is depreciated certain amendments over the useful to the life standards, of the related which asset. are effective for annual 

periods beginning on or after January 1, 2017. The Group has not early adopted any standards, 

interpretations n. Impairment or amendments of non-financial that have been assets issued but are not yet effective. 

The nature Group assesses and the impact at each of each reporting amendment date whether is described there is below: an indication that an asset may be impaired. 


the Amendments asset’s recoverable to IAS 7 Statement amount. An of Cash asset’s Flows: recoverable Disclosure amount Initiative is the higher of an asset’s or cash 

generating The amendments units (CGU) require fair entities value to less provide costs disclosure of disposal of changes and its in value their in liabilities use. It arising determined from financing for individual activities, asset, including unless both the changes asset does arising not from generate cash cash flows inflows and non-cash that are largely changes independent (such as of foreign those 

from exchange other gains assets or or losses). groups The of assets. amendments Where have the carrying no effect amount on the of Group’s an asset consolidated or CGU exceeds financial its 

position recoverable and amount, the consolidated the asset statement is considered of cash impaired flows and is written down to its recoverable amount. In 


discount rate to IAS that 12 reflects Income current Taxes: market Recognition assessments of Deferred of the Tax time Assets value for of Unrealized money and Losses the risks 

Amendments 

The specific amendments to the asset. clarify In determining that an entity fair needs value to less consider costs of whether disposal, tax recent law restricts market the transactions sources of are taxable taken 

profits into account. against If which no such it may transactions make deductions can be identified, on the reversal an appropriate of deductible valuation temporary model difference is used. related to 

unrealized Impairment losses. of Furthermore, continuing operations the amendments are recognized provide guidance in the consolidated how an statement entity should of profit determine or loss 

future in those taxable expense profits categories and explain consistent the circumstances with the function in which of the taxable impaired profit asset, may include except the for recovery a property of 

some previously assets revalued for more where than their carrying revaluation amount. was taken to OCI. In this case, the impairment is also 


Page 63 

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90 




(continued) 


(continued) 


The Group applied amendments retrospectively. However, the amendments have no effect on the 

Group’s AFS financial financial investments position and include performance equity and as debt the securities. Group has Equity no deductible investments temporary classified differences as availablefor-sale 

that are are those in the neither scope classified of the amendments. 

as held-for-trading nor designated at fair value through profit or loss. 

or 

assets 


Amendments unrealized gains to or IFRS losses 12 recognized Disclosure as of OCI Interests until the in Other investment Entities: is derecognized, Clarification at of which the scope time, the of 

disclosure cumulative requirements gain or loss is in recognized IFRS 12 in other operating income or expense, or the investment is 

The determined amendments to be impaired, clarify that which the disclosure time, the cumulative requirements loss in is IFRS reclassified 12, other to the than consolidated those in paragraphs statement 

B10–B16, of profit or apply loss in to finance entity’s costs interest and removed in a subsidiary, from the OCI. a joint The venture Group or evaluates an associate its AFS (or financial a portion assets of its 

interest to determine a whether joint venture the ability or an and associate) intention to that sell is them classified in the near (or included term is still in appropriate. 

a disposal group that is 

classified) as held for sale. As at December 31, 2017 the Group classified its interest in Suriname Gold 

Project (ii) Financial CV, a liabilities 25% participating interest, as a joint venture (see Note 4.4), but these amendments did not 

affect Recognition the Group’s and measurement 

consolidated financial statements. 





overdrafts. 
















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(continued) 


(continued) 


Section 3. Results for the year 



This section provides additional information that is most relevant in explaining the Group’s consolidated 


performance during the year. 


• Segment information (Note 3.1) 


• Information about key items comprising operating profit/loss (Note 3.2) 

The • net The realizable calculation value of of income crude tax oil (Note and refined 3.3) products is based on the estimated selling price in the 

ordinary • Earnings course of per business, share (Note less 3.4) the estimated costs of completion and the estimated costs necessary to 

make 

• 

the sale. 

Dividends paid and proposed (Note 3.5) 

3.1 Segment information 


For management purposes, Staatsolie is organized into reportable segments that include three operating 

Pipeline fill 

segments and a corporate segment. 


pipeline. The three This operating is on segments the basis are: that it is not held for sale or consumed in a production process, but is 

necessary • Upstream: to the operation this segment of a facility is responsible during more for exploring, than one operating developing, cycle, producing and its and cost transporting cannot be 

recouped crude through oil to sale the refinery. (or is significantly impaired). This applies even if the part of inventory that is 

deemed • Downstream: to be an item is of responsible property, plant for and refining equipment the crude cannot oil, be marketing, separated selling, physically and from distributing the rest the of 

inventory. related It is valued oil products. at cost and Furthermore, is depreciated trading over which the useful is related life of to the trading related fuel asset. products and selling 

these products to wholesale, retail and bunkering customers. Lastly, part of this segment is also 

n. the Impairment 96 megawatt of thermal non-financial power plant assets operation, which delivers the electric power to the single 

The Group source assesses customer, at each the reporting national electricity date whether company there EBS. is an indication that an asset may be impaired. 

If any • indication Gold Mining: exists, the or Group when annual has impairment investment testing a joint for venture an asset that is required, is involved the in Group the exploration, estimates 

the asset’s development recoverable and amount. exploitation An asset’s of the Merian recoverable Gold amount mine which is the regularly higher reviewed of an asset’s by the or Chief cash 

generating Operating units (CGU) Decision fair Maker value (“CODM”). less costs of disposal and its value in use. It is determined for an 


from These other functions assets have or groups been defined of assets. Where the operating the carrying segments amount of the of an Group asset because or CGU they exceeds are the its 

recoverable segments: amount, the asset is considered impaired and is written down to its recoverable amount. In 

assessing 1. That value engage in use, in business the estimated activities future from cash which flows revenues are discounted are earned to their and present expenses value are using incurred. a pretax 

discount 2. Whose rate operating that reflects results current are regularly market assessments reviewed by of the the board time of value executive of money directors and the to make risks 

specific to decisions the asset. about In determining resources to fair be value allocated less to costs the segment of disposal, and recent assess market its performance. transactions are taken 

into 3. account. For which If no such discrete transactions financial information can be identified, is available. an appropriate valuation model is used. 


The corporate segment are the functional departments of the Group that consists of Petroleum Contracts 


and all other corporate administrative functions. 


The board of executive directors (which collectively is considered to be the Chief Operating Decision 


Maker) monitors the operating results of its business units separately for the purpose of making decisions 

Page 63 

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92 




(continued) 


(continued) 


about resource allocation and performance assessment. Segment performance is evaluated based on 

AFS operating financial profit investments or loss and include is measured equity and consistently debt securities. with operating Equity investments profit or loss classified in the as consolidated availablefor-sale 

financial are statements. those neither classified as held-for-trading nor designated at fair value through profit or loss. 


Corporate - 

unrealized 

x US$ 1,000 

gains or losses recognized as OCI until the investment is derecognized, 

Total 


adjustments 

Upstream Downstream Gold mining Corporate 

Consolidated 

Year ended December 31, 2017 

segments 

cumulative gain or loss is recognized in other operating income or expense, or 

& 

the investment is 

eliminations 


Revenue 

of External profit customers or loss in finance costs and - removed 433,678 from the -OCI. The Group - evaluates 433,678 its AFS - financial 433,678assets 

Inter segment crude 272,697 (272,697) - - - - - 


Inter segment other - 156,313 - - 156,313 (156,313) - 

Total revenue 272,697 317,294 - - 589,991 (156,313) 433,678 

(ii) Income/(expenses) Financial liabilities 

Depreciation (38,436) (54,108) - (755) (93,299) - (93,299) 

Amortization (2,037) - - (780) (2,817) - (2,817) 

Recognition 

Accretion 


(4,118) (579) - - (4,697) - (4,697) 

Share of profit of Suriname Gold 

Financial liabilities are classified, -at initial recognition, - 63,725 as financial - liabilities 63,725 at fair value - through 63,725 profit or 

Project JV 


EBITDA* 213,683 22,974 91,995 (26,320) 302,332 (16,915) 285,417 


The 

Segment 

Group’s 

profit (loss) 

financial 

(before tax) 

liabilities 

169,091 

include trade 

(34,133) 

and other 

63,725 

payables, 

(87,498) 

loans 

111,185 


(16,915) 

including 

94,270 

bank 

overdrafts. 

Income tax expense - (9,380) - (23,945) (33,325) 206 (33,119) 

Segment net profit (loss) for the 

169,091 (43,513) 63,725 (111,443) 77,860 (16,709) 61,151 

Loans year and borrowings 

This Total assets is the category most relevant 626,766 to 1,274,676 the Group. 277,306 After initial 459,664 recognition, 2,638,412 interest (427,525) bearing 2,210,887 loans and 


recognized 

Other disclosures 

in the consolidated statement of profit or loss when the liabilities are derecognized as well as 

Investments in Suriname Gold 

- - 277,306 - 277,306 - 277,306 

through Project JV the EIR amortization process. Amortized cost is calculated by taking into account any discount or 

Capital expenditure 111,450 20,690 - 221 132,361 - 132,361 











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(continued) 


(continued) 




x US$ 1,000 

Year ended December 31, 2016 Upstream Downstream Gold mining Corporate 


Revenue 

appropriate External customers proportion of depreciation, - depletion 357,705 and -amortization - and 357,705 overheads based - on 357,705 normal 

Inter segment crude 181,571 (181,571) - - - - - 



Income/(expenses) 


Depreciation and impairment of PPE (38,016) (56,317) - (1,295) (95,628) - (95,628) 

make Amortization the of sale. intangible assets - - - (2,817) (2,817) - (2,817) 

Pipeline fill 

Crude 

Segment 

oil, 

profit 

which 

(loss) (before 

is necessary 

tax) 87,662 

to bring a pipeline 

(38,691) 

into 

8,114 

working 

(57,203) 

order, is treated 

(118) 

as a part 

(9,088) 

of the 

(9,206) 

related 


Income tax expense - (9,993) - 11,602 1,609 - 1,609 


Segment net profit (loss) for the 

87,662 (48,684) 8,114 (45,601) 1,491 (9,088) (7,597) 

recouped year through sale (or is significantly impaired). This applies even if the part of inventory that is 

deemed Total assets to be an item of property, 588,669plant 1,289,535 and equipment 285,306 cannot 383,291 be separated 2,546,801 physically (354,962) from the 2,191,839 rest of 


Project JV n. Impairment of non-financial assets 

Capital expenditure 39,456 6,589 - 436 46,481 - 46,481 



Adjustments and eliminations 


generating • Finance units income (CGU) and fair costs, value and less fair costs value of gains disposal and and losses its on value financial use. assets It is are determined not allocated for an to 

individual individual asset, unless segments the asset the does underlying not generate instruments cash are inflows managed that are on a largely group independent basis. of those 

from • other Capital assets expenditure or groups consists of assets. of additions Where of the property, carrying plant amount and equipment of an asset and or intangible CGU exceeds assets its 

recoverable including amount, assets the from asset the is acquisition considered of impaired subsidiaries. and is written down to its recoverable amount. In 

assessing • Inter-segment value in use, revenues the estimated are eliminated future cash on flows consolidation are discounted to their present value using a pretax 


*Explanation of non-IFRS measures 


The Group discloses one financial measure, namely earnings before interest, taxes, depreciation and 


amortization (EBITDA), that is not prepared in accordance with IFRS and is therefore considered a non- 


IFRS financial measure. The Group calculated EBITDA by taking the net income and adding back 


interest, taxes, depreciation, and amortization. As EBITDA is used by management as a key performance 


indicator, the Group believes that it is useful to be presented to the readers of the consolidated financial 


statements. 

Page 63 

Page 93 

Total 

segments 

Corporate - 

adjustments 

& 

eliminations 

Consolidated 

Inter segment other - 118,966 - - 118,966 (118,966) - 

Total revenue 181,571 295,100 - - 476,671 (118,966) 357,705 

Accretion (5,434) (595) - - (6,029) - (6,029) 

Share of profit of Suriname Gold 

Materials and supplies are valued -using the weighted - average 8,114 cost method. 

- 8,114 - 8,114 

Project JV 

EBITDA* 131,062 21,719 12,494 (2,336) 162,939 (9,088) 153,851 

Other disclosures 

Investments in Suriname Gold 

- - 285,306 - 285,306 - 285,306


94 




(continued) 


(continued) 


Geographic information 

AFS Revenues financial from investments external customers include equity and debt securities. Equity investments classified as availablefor-sale 

x US$ 1,000 are those neither classified as held-for-trading nor designated at fair 2017 value through 2016 profit or loss. 

After Suriname initial measurement, AFS financial investments are subsequently 234,178 measured at fair 175,426 value with 

unrealized Guyana gains or losses recognized as OCI until the investment is derecognized, 79,838 at which 54,408 time, the 

Other Caribbean Territories 54,650 41,876 


Trinidad and Tobago 45,673 68,572 

determined United States to be impaired, at which time, the cumulative loss is reclassified to 11,355 the consolidated 9,431 statement 

Europe 3,984 4,715 


Middle East and Asia 4,000 3,277 

to Total determine revenue whether per consolidated the ability and intention statement to sell of them profit in or the loss near term is 433,678 still appropriate. 357,705 


The revenue information above is based on the location of the customers. In addition, revenue from one 

Recognition customer domiciled and measurement in Guyana amounted to US$ 57,884 (2016: US$ 44,431), arising from sales by the 

Financial downstream liabilities operating are segment. classified, at initial recognition, as financial liabilities at fair value through profit or 


value Non-current and, in operating the case assets of loans and borrowings and payables, net of directly attributable transaction costs. 

The x US$ Group’s 1,000financial liabilities include 2017trade and other 2016 payables, loans As and at January borrowings 1, 2016 including bank 

overdrafts. Suriname 1,624,306 1,603,972 1,734,571 

Trinidad and Tobago 2,669 2,744 2,795 

Total 1,626,975 1,606,716 1,737,366 



Non-current assets for this purpose consist of property, plant and equipment and intangible assets. Only 


Ventrin, the subsidiary domiciled in Trinidad and Tobago, has non-current operating assets outside of 


Suriname. 












Page 62 

Page 94





(continued) 


(continued) 


Components of Revenue 



xUS$ 1,000 2017 2016 

The Own cost refined of products crude oil (gross) and refined products 368,595 is the purchase 259,800 cost, the cost of refining, including the 

appropriate Intersegment proportion sales of depreciation, (129,923) depletion and amortization (103,464) and overheads based on normal 

Local refined products (net) 238,672 156,336 


The Trading net activities realizable (gross) value of crude oil and 156,899 refined products 170,598 is based on the estimated selling price in the 

Intersegment sales (10,581) (12,067) 


Trading activities (net) 146,318 158,531 


Materials 

Electric energy 

and supplies 

(gross) 

are valued using the 

64,189 

weighted average 

50,094 

cost method. 

Intersegment sales (15,801) (11,059) 

Electric energy (net) 48,388 39,035 

Pipeline fill 

Crude Other revenues oil, which (gross) is necessary to bring a pipeline 307 into working 5,066 order, is treated as a part of the related 

Intersegment sales (7) (1,263) 


Other revenues (net) 300 3,803 


recouped Total revenues through sale (or is significantly 433,678 impaired). This 357,705 applies even if the part of inventory that is 


Revenues inventory. It consist valued of at the cost sales and of is petroleum depreciated products, over the electric useful life energy of the and related trade asset. activities of petroleum 

products. Petroleum products are generally being sold at prevailing market prices. Revenues are 

recognized n. Impairment when products of non-financial are delivered, assets which occurs when the customer has taken title and has 

assumed The Group the assesses risks and at each rewards reporting of ownership, date whether prices there are is an fixed indication or determinable that an asset and may collectability be impaired. is 

If reasonably any indication assured. exists, or when annual impairment testing for an asset is required, the Group estimates 


Sales between group companies (intersegment sales) are based on prices generally equivalent to 


commercially available prices. 












Page 63 

Page 95


96 





(continued) 


3.2 Information about key items comprising operating profit/loss 


Selling are and those distribution neither classified expenses as held-for-trading nor designated at fair value through profit or loss. 


unrealized x US$ 1,000 gains or losses recognized as OCI until the investment 2017is derecognized, 2016 at which time, the 

cumulative Freight gain or loss is recognized in other operating (12,367) income or expense, (13,853) or the investment is 

Employee benefits expense* (2,641) (2,590) 


Bad debt expense - (4,823) 

of 

External 

profit or 

services 

loss in finance costs and removed from the OCI. The 

(3,683) 

Group evaluates its 

(2,785) 

AFS financial assets 

to Depreciation determine whether and amortization the ability and of PPE intention to sell them in the near (65) term is still appropriate. (130) 

Maintenance expense (616) (219) 

(ii) 

Insurance 

Financial 

costs 

liabilities 

(97) (127) 

Utility expenses (11) (11) 

Recognition Donations and measurement 

- (8) 

Financial Travel expenses liabilities are classified, at initial recognition, as financial (18) liabilities at fair value (3) through profit or 

Other expenses (427) (428) 


Total (19,925) (24,977) 



overdrafts. General and administrative expenses 

x US$ 1,000 2017 2016 

Loans 

Employee 


benefits expense* (17,012) (14,547) 

This External is the services category most relevant to the Group. After initial (4,500) recognition, interest (10,363) bearing loans and 

borrowings Depreciation are and subsequently amortization measured of PPE at amortized cost using (1,573) the EIR method. (4,131) Gains and losses are 

recognized 

Maintenance 

in the 

expense 

consolidated statement of profit or loss when the 

(299) 

liabilities are derecognized 

(232) 

as well as 

Insurance costs (880) (391) 


Freight (817) - 

premium Utility expenses on acquisition and fees or costs that are an integral part (554) of the EIR. The (321) EIR amortization is 

included Donations in finance costs in the consolidated statement of profit or (278) loss. This category (107) generally applies to 

interest-bearing GOw2 rebranding loans and borrowings. 

(89) (212) 

Travel expenses (54) (12) 

Other expenses (1,111) (1,151) 


Total (27,167) (31,467) 



* When compared with the “Employee benefits expense” disclosure, the amounts differ due to the additional presentation of “car 

• lease Purchase benefit expense”. cost is valued on weighted average method 




Page 62






(continued) 


selling Employee price in benefits the ordinary expense course of business, less estimated costs of completion and the estimated 




appropriate Included in proportion cost of sales of depreciation, depletion and amortization and overheads based on normal 

operating 

Wages, salaries, 

capacity, 

emoluments 

determined on 

and 

a weighted 

other benefits 

average basis. 

(34,090) (29,281) 

Employers contribution of employee pension benefits (3,861) (3,578) 

The Medical net realizable expenses value of crude oil and refined products is based on the (1,634) estimated selling price (981) in the 

Safety and traning expenses (989) (1,033) 

ordinary 

Car lease 

course 

benefit 

of business, less the estimated costs of completion and 

(2,766) 

the estimated costs 

(2,635) 

necessary to 

make Other the personnel sale. expenses (557) (274) 

Sub total (43,897) (37,782) 


Included in Exploration expenses 

Wages, salaries, emoluments and other benefits (1,026) (983) 

Pipeline Employers fill contribution of employee pension benefits (97) (120) 

Crude Medical oil, expenses which is necessary to bring a pipeline into working order, is treated (35) as a part of the (25) related 

Safety and traning expenses (5) - 

pipeline. 

Car lease 

This 

benefit 

is on the basis that it is not held for sale or consumed in 

(78) 

a production process, 

(93) 

but is 

necessary Sub total to the operation of a facility during more than one operating (1,241) cycle, and its cost (1,221) cannot be 


Included in Selling and distribution expenses 

deemed Wages, to salaries, be an item emoluments of property, and plant other and benefits equipment cannot be separated (2,321) physically from (2,253) the rest of 

inventory. Employers It is contribution valued at cost of employee and is depreciated pension benefits over the useful life of the related (212) asset. (240) 

Medical expenses (85) (52) 

Safety and traning expenses (20) (42) 

Car lease n. benefit Impairment of non-financial assets 

(101) (117) 

Other personnel expenses (3) (3) 


Sub total (2,742) (2,707) 


Included in Other operating expenses 


Wages, salaries, emoluments and other benefits (1,483) (1,020) 

generating Other personnel units (CGU) expenses fair value less costs of disposal and its value in (190) use. It is determined (120) for an 

individual Sub total asset, unless the asset does not generate cash inflows that are (1,673) largely independent (1,140) of those 

from 

Included 

other 

in 

assets 

General 

or groups 

and administrative 

of assets. Where 

expenses 

the carrying amount of an asset or CGU exceeds its 

recoverable Wages, salaries, amount, emoluments the asset is and considered other benefits impaired and is written down (13,824) to its recoverable (11,239) amount. In 

Employers contribution of employee pension benefits (918) (1,156) 


Safety discount and traning rate that expenses reflects current market assessments of the time (531) value of money and (43) the risks 

Medical expenses (1,520) (1,735) 

specific 

Car lease 

to the 

benefit 

asset. In determining fair value less costs of disposal, recent 

(483) 

market transactions 

(970) 

are taken 

Other personnel expenses (220) (375) 

into Sub account. total If no such transactions can be identified, an appropriate valuation (17,496) model is used. (15,518) 


Grand total (67,049) (58,368) 




Page 63


98 





(continued) 


Depreciation of PPE and amortization of intangible assets 


x US$ 1,000 are those neither classified as held-for-trading nor designated at fair 2017 value through profit 2016 or loss. 


Included in cost of sales 

unrealized Depreciation gains and or amortization losses recognized upstream as OCI until the investment is derecognized, (40,455) at which (37,957) time, the 

cumulative Depreciation gain downstream or loss is recognized in other operating income or (54,000) expense, or the investment (56,163) is 

Sub total (94,455) (94,120) 


of Included profit or in loss Exploration in finance costs expenses and removed including from dry the holes OCI. The Group evaluates its AFS financial assets 

Depreciation upstream-exploration (17) (59) 


Sub total (17) (59) 

(ii) Included Financial in liabilities Selling and distribution expenses 

Depreciation downstream (65) (130) 

Recognition Sub total and measurement 

(65) (130) 


Included in General and administrative expenses 

loss, Depreciation loans and and borrowings, amortization payables, corporate as appropriate. All financial liabilities (1,535) are recognized initially (4,112) at fair 

value Depreciation and, in the downstream case of loans and borrowings and payables, net of directly attributable (38) transaction (19) costs. 

Sub total (1,573) (4,131) 


overdrafts. Included in Other operating expenses 

Depreciation downstream (6) (5) 

Sub total (6) (5) 


This Grand is the total category most relevant to the Group. After initial recognition, (96,116) interest bearing (98,445) loans and 


recognized Finance income 

the consolidated statement of profit or loss when the liabilities are derecognized as well as 


premium x US$ 1,000 on acquisition and fees or costs that are an integral part of the 2017 EIR. The EIR amortization 2016 is 

Interest income on loans 959 3,460 


Other interest income 1,059 1,380 


Total finance income 2,018 4,840 


Petroleum Finance products costs are valued at the lower of cost and net realizable value. 


Raw Interest materials: on borrowings 

• Accretion Purchase expenses cost is valued on weighted average method 

Bank and other finance charges 

(63,800) 

(4,697) 

(280) 

(58,600) 

(6,067) 

(455) 

Finished Total finance goods and costs work in progress: 

(68,777) (65,122) 



Page 62





(continued) 


(continued) 


Other (expense)/income 


costs x US$ to 1,000 sell. 


Sales tax provision (6,389) - 

The Government cost of crude of Suriname oil and share refined SurGold products is the purchase (11,985) cost, the cost of refining, 2,742 including the 

appropriate Settlement proportion of BNIS claim of depreciation, depletion and amortization (9,440) and overheads - based on normal 

Third party claims (1,486) - 


Interest on late payments (2,619) - 

The 

Insurance 

net realizable 

claim income 

value of crude oil and refined products is 

2,000 

based on the estimated 

- 

selling price in the 

(Loss) / Gain on foreign currency transactions (1,364) 8,445 

ordinary 

Disposal 

course 

of fixed 

of 

assets 

business, less the estimated costs of completion 

- 

and the estimated 

(618) 

costs necessary to 

make Sale of the lease sale. data package - (1,200) 

Other income 7,646 4,088 

Materials Total other and (expense)/income supplies are valued using the weighted average (23,637) cost method. 13,457 

Pipeline Other (expense) fill / income as at December 31, 2017 and 2016 comprise income / (expense) from several 

Crude sources. oil, The which significant is necessary items in to 2017 bring relates a pipeline to: 1) into management working order, evaluated is treated the sales as a tax part receivable of the related taken 

pipeline. in the sales This tax is returns on the for basis previous that it years is not and held based for sale on communication or consumed in and a confirmation production process, received but from is 

necessary the tax authority, to the operation recognized of a provision facility during of US$ more 6,389; than 2) one the operating GoS share cycle, in SurGold and its cost which cannot was be an 

recouped expense of through US$ 11,985 sale (or for is significantly Staatsolie because impaired). the This revenues applies which even if GoS the earned part of inventory with their that 4.8% is 

deemed participating to be interest, an item exceeded of property, their plant part and of equipment the cash cannot calls paid be separated and 3) BNIS physically had a from claim the against rest of 

inventory. Staatsolie It regarding is valued civil at cost technical and is tasks depreciated they performed over the for useful the life refinery of the expansion related asset. project. The claim was 

settled with a net impact of US$ 9,440. 


The significant items in 2016 relate to: 1) a gain on foreign currency transactions on sales and purchases 


executed in SRDs and 2) the GoS’ share in SurGold which was an income of US$ 2,742 because the 


cash calls exceeded the 4.8% participating interest in SurGold. 














Page 63 

Page 99


100 





(continued) 


3.3 Income tax 


The major are components those neither of classified income tax as for held-for-trading the year ended nor 2017 designated are as follows: at fair value through profit or loss. 


unrealized Consolidated gains statement or losses of recognized profit or loss as OCI until the investment is derecognized, at which time, the 

cumulative x US$ 1,000gain or loss is recognized in other operating income 2017or expense, 2016 or the investment is 


Current income tax: 


to Current determine tax expense whether the ability and intention to sell them in the near (25,726) term is still appropriate. (8,333) 

Tax expense (income) relating to changes in accounting policies 

(IFRS) and restatements and equity items (6,480) (9,539) 


Recognition Deferred tax: and measurement 


Income relating to origination and reversal of temporary differences 

loss, loans and borrowings, payables, as appropriate. All financial liabilities (913) are recognized 19,481 initially at fair 


Income tax (expense)/credit reported in the consolidated 

The statement Group’s of profit financial or loss liabilities include trade and other payables, (33,119) loans and borrowings 1,609 including bank 

overdrafts. 

A reconciliation between tax expense and the accounting profit / (loss) multiplied by Staatsolie’s domestic 

Loans tax rate and is as borrowings follows. 

This x US$ is 1,000 the category most relevant to the Group. After initial recognition, 2017interest bearing 2016 loans and 


Accounting profit / (loss) before income tax 94,270 (9,206) 


At Staatsolie's statutory tax rate of 32.4% for Staatsolie and 36% 

through for the subsidiaries the EIR amortization process. Amortized cost is calculated by taking (33,119) into account any 1,609 discount or 

premium Tax expense on acquisition (income) relating and fees to changes or costs in that accounting are an integral policies part of the EIR. The EIR amortization is 

included 

and corrections 

in finance 

of errors 

costs in the consolidated statement of profit or loss. This category 

- 

generally 

- 

applies to 

Effect of unrecognized credits - - 


Tax (expense)/credit at the effective income tax rate 

reported m. in Inventories the consolidated statement of profit or loss (33,119) 1,609 


Effective tax rate 35.1% 17.5% 






Page 62 

Page 100






(continued) 


Consolidated statement of other comprehensive income 





Deferred tax related to items recognized in other 


comprehensive income during the year: 


Net loss/gain on gains and losses from equity instruments (14) 1,009 


Net loss/gain on remeasurement gains and losses on defined 

ordinary benefit plans course of business, less the estimated costs of completion and the estimated (8,255) costs necessary 3,137 to 


Income tax recognized in other comprehensive income (8,269) 4,146 


Pipeline Reconciliation fill of deferred tax asset / (liability) 




necessary Opening balance to the operation as of January of a facility 1 during more than one operating cycle, 16,497 and its cost cannot (6,928) be 

recouped Tax income/(expense) through sale (or during is significantly the period recognized impaired). This in profit applies or loss even if the (913) part of inventory 19,279 that is 

Tax (expense)/income during the period recognized in other 


comprehensive income (8,269) 4,146 


Closing n. balance Impairment as at of December non-financial 31 assets 

7,315 16,497 


If Deferred any indication income exists, tax at or December when annual 31 impairment relates to the testing following: for an asset is required, the Group estimates 


generating units (CGU) fair value less costs of disposal and Consolidated its value in use. statement It is determined of financial for an 

individual asset, unless the asset does not generate cash inflows that are largely position independent of those 



recoverable Deferred tax amount, assets the asset is considered impaired and is written down to its recoverable amount. In 

assessing Short-term value investments use, the estimated future cash flows are discounted to their (649) present value using (635) a pretax 


Other property, plant and equipment (1,314) (647) 

Accruals and other liabilities - 638 

specific Provisions to the asset. In determining fair value less costs of disposal, recent (1,528) market transactions (1,013) are taken 

into Employee account. defined If no such benefit transactions liabilities can be identified, an appropriate valuation 10,806 model is used. 18,154 


Deferred tax asset (net) related to income tax 

in those expense categories consistent with the function of the impaired 7,315 asset, except for a 16,497 property 



Page 63


102 




(continued) 


(continued) 


Tax losses carry forward 



Ventrin is subject to the fiscal regime of Trinidad and Tobago, and has accumulated tax losses of 

approximately US$ 16,453 as at December 31, 2017, (2016: US$ 15,254) available for offset against 


future taxable profits. These losses have no expiry date. As at year end, no deferred tax asset was 


recognized for these tax losses as it is not probable that sufficient future taxable profit will be available to 


allow the deferred tax asset to be utilized. 



3.4 Earnings per share 


Basic earnings (loss) per share is calculated by dividing the net profit for the year attributable to ordinary 

shareholders of the Group by the weighted average number of ordinary shares outstanding during the 


year. 


Financial liabilities are classified, at initial recognition, as financial liabilities at fair 2017 value through profit 2016or 

Net profit (loss) attributable to ordinary shareholders (US$'000) 61,151 (7,597) 


Weighted average number of ordinary shares (number of shares - million) 5,000 5,000 

value Basic and, earnings the (loss) case per of ordinary loans and share borrowings (US$ cents and per payables, thousand net shares) of directly attributable 12.23 transaction (1.52) costs. 


overdrafts. There have been no other transactions involving ordinary shares or potential ordinary shares between the 

reporting date and the date of authorization of these consolidated financial statements. 



3.5 Dividends paid and proposed 


recognized x US$1,000 in the consolidated statement of profit or loss when the liabilities are derecognized 2017 as well 2016 as 


Declared and paid during the year: 

premium Cash dividends on acquisition ordinary and shares: fees or costs that are an integral part of the EIR. The EIR amortization is 

included Final dividend in finance for 2016 : costs US$ 0.0 in per the share consolidated (2015: US$ statement 1.45) of profit or loss. This category - generally applies 7,228to 

Interim dividend for 2017: US$ 0.0 per share (2016: US$ 0.0 per share) - - 


- 7,228 

Proposed m. for Inventories 

approval at the annual general meeting: 

Note: below dividends have been recognized in the Financial 

Petroleum statements products in line with are the valued dividend at policy the lower with the of cost shareholders and net realizable value. 

Dividends on ordinary shares: 


Final (proposed) dividend for 2017: US$ 0.0 per share (2016:US$ 0.0 per share) - - 


Finished Final dividends goods on and ordinary work in shares progress: are subject to approval at the annual general shareholders’ meeting. 



Page 62 

Page 102




(continued) 


Inventories Notes the are Consolidated stated at financial the lower statements of cost and for the net years realizable ended value. December Net 31, realizable 2017 and value 2016 is (continued) the estimated 


Section 4. Invested capital 


The 4.1 cost Oil, of exploration crude oil and refined and producing products is properties 

the purchase cost, the cost of refining, including the 


operating capacity, determined Land on & Lease a weighted Building and average Machine basis. & Abandonment 

Well & 

Exploration & 

xUS$ 1,000 

hold improvement Structure Equipment Costs Equipment Pipelines 

Evaluation 

Grand Total 

Cost 

At January 1, 2016 7,357 20,359 50,800 73,668 607,298 11,264 4,320 526 78,599 79,258 933,449 

Additions - 2 23 - 65 - 3 - 39,219 142 39,454 

Adjustments * - - - (31,415) - - - - 7 - (31,408) 

Capitalized from PIP to PPE current Year 1,919 46 1,940 - 52,481 - 6 6 (57,231) (2,049) (2,882) 





Pipeline fill 



Depreciation 





Net book value: n. Impairment of non-financial assets 



* Adjustments to abandonment cost relates to changes in the decommissioning provision 




Other 

Fixed 

Assets 

Production 

Projects in 

Progress 

Exploration 

Projects in 

Progress 

Disposals /Desinvestment current year - - (32) - (15) - (13) (1) - - (61) 

Internal transfers - - - - - - (4) - - - (4) 

Expense to P&L - - - - - - - - (1,105) (4,461) (5,566) 

At December 31, 2016 9,276 20,407 52,731 42,253 659,829 11,264 4,312 531 59,489 72,890 932,982 

Additions - 6 316 - - - 92 89 109,933 1,013 111,449 

Adjustments * - - - (2,383) - - (98) - - - (2,481) 

Capitalized from PIP to PPE current Year - 1,053 (157) 37,237 87,286 - 7 - (124,984) - 442 

Disposals /Desinvestment current year - - - - (36) - (2) - - - (38) 

Internal transfers - - (122) - (5) - - - - - (127) 

Expense to P&L - - - - - - - - (1,157) (1,613) (2,770) 

At December 31, 2017 9,276 21,466 52,768 77,107 747,074 11,264 4,311 620 43,281 72,290 1,039,457 

At January 1, 2016 - (16,241) (43,383) (36,548) (338,917) (11,264) (3,822) (514) - - (450,689) 

Depreciation current year - (765) (3,871) (3,973) (29,150) - (247) (11) - - (38,017) 

Depreciation disinvestment current year - - 32 - 9 - 13 1 - - 55 

Internal transfers - - - - - - 4 - - - 4 

At December 31, 2016 - (17,006) (47,222) (40,521) (368,058) (11,264) (4,052) (524) - - (488,647) 

Depreciation current year - (703) (2,197) (170) (35,163) - (185) (17) - - (38,435) 

Depreciation disinvestment current year - - - - 19 - 2 - - - 21 

Internal transfers - - 121 - 3 - - - - - 124 

At December 31, 2017 - (17,709) (49,298) (40,691) (403,199) (11,264) (4,235) (541) - - (526,937) 

At January 1, 2016 7,357 4,118 7,417 37,120 268,381 - 498 12 78,599 79,258 482,760 

At December 31, 2016 9,276 3,401 5,509 1,732 291,771 - 260 7 59,489 72,890 444,335 

At December 31, 2017 9,276 3,757 3,470 36,416 343,875 - 76 79 43,281 72,290 512,520



Notes Staatsolie to the Maatschappij Consolidated Suriname financial N.V. statements for the years ended December 31, 2017 and 2016 

(continued) 

Notes to the Consolidated financial statements for the years ended December 31, 2017 and 2016 (continued) 

Inventories 4.2 Refining are stated properties at the lower of cost and net realizable value. Net realizable value is the estimated 



Land & Lease Building 

Abandon 

Other 

hold and Machine & ment 

Fixed Projects in Grand 

x US$ 1,000 

improvement Structure Equipment Costs Pipelines Assets Progress Total 

The Cost cost of crude oil and refined products is the purchase cost, the cost of refining, including the 

appropriate At January 1, 2016 proportion of depreciation, depletion and 9,774 amortization 1,083,786 and 11,983 overheads 8,559 based 33,249 on normal 2,567 27,427 1,177,345 

Additions - - - - - 1 - 1 

operating Adjustments* capacity, determined on a weighted average basis. - - - (3,730) - - - (3,730) 

Capitalized from PIP to PPE and Expensed current Year - 23,389 607 - - 14 (24,310) (300) 

The Disposals net /Desinvestment realizable value current of year crude oil and refined products - is based (1,767) on the estimated - -selling price - in the (5) - (1,772) 

Expense to P&L - - - - - - (1,820) (1,820) 

ordinary 

At December 

course 

31, 2016 

of business, less the estimated costs of 

9,774 

completion 

1,105,408 

and the 

12,590 

estimated 

4,829 


33,249 2,577 

to 

1,297 1,169,724 

make Additions the sale. 

Adjustments* 

- 

- 

- 

(9,277) 

- 

- 

- 

2,776 

- 

- 

37 

- 

16,720 

- 

16,757 

(6,501) 

Materials Capitalized from and PIP supplies to PPE and are Expensed valued using current the Yearweighted average - cost 14,769 method. 155 - - - (14,933) (9) 

Expense to P&L - - - - - - (1,949) (1,949) 

At December 31, 2017 9,774 1,110,900 12,745 7,605 33,249 2,614 1,135 1,178,022 

Depreciation 

Pipeline fill 

At January 1, 2016 (1,666) (103,736) (8,698) - (4,523) (2,430) - (121,053) 

Crude Depreciation oil, current which year is necessary to bring a pipeline into working - (47,400) order, is treated (879) as a (342) part of (1,240) the related (90) - (49,951) 

Adjustments - 2,878 322 - - - - 3,200 

pipeline. Depreciation This disinvestment is on the current basis year that it is not held for sale - or consumed 2,388 in a - production - process, - but is 5 - 2,393 

necessary At December to 31, the 2016 operation of a facility during more (1,666) than one (145,870) operating (9,255) cycle, and (342) its cost (5,763) cannot (2,515) be 

- (165,411) 

Depreciation current year - (45,131) (915) (187) (1,240) (51) - (47,524) 

recouped Adjustments through sale (or is significantly impaired). This - applies 1,043even if the - part of - inventory - that is - - 1,043 

Depreciation disinvestment current year - - - - - - - - 


At December 31, 2017 (1,666) (189,958) (10,170) (529) (7,003) (2,566) - (211,892) 

inventory. Net book value: It is valued at cost and is depreciated over the useful life of the related asset. 

At January 1, 2016 8,108 980,050 3,285 8,559 28,726 137 27,427 1,056,292 

At December 31, 2016 8,108 959,538 3,335 4,487 27,486 62 1,297 1,004,313 

At December n. 31, Impairment 2017 of non-financial assets 8,108 920,942 2,575 7,076 26,246 48 1,135 966,130 


* Adjustments to abandonment cost relates to changes in the decommissioning provision 




individual asset, unless the asset does not generate cash inflows that are largely independent of those



Notes Staatsolie to the Maatschappij Consolidated Suriname financial N.V. statements for the years ended December 31, 2017 and 2016 

(continued) 


Inventories 4.3 Other are stated property, at the lower plant of and cost and equipment net realizable value. Net realizable value is the estimated 



x US$ 1,000 

Land & Leasehold Building and 

Improvement Structure 

Machine & 

Equipment 

The Cost cost of crude oil and refined products is the purchase cost, the cost of refining, including the 







Abandonment 

costs 

Well & 

Equipment 

Other Fixed 

Assets 

Pipeline fill 













Projects in 

Progress 

Grand Total 

At January 1, 2016 36,660 38,272 124,388 203 1,869 12,531 31,952 245,875 

Additions - 1,246 1,141 - - 338 4,301 7,026 

Capitalized from PIP to PPE and Expensed current Year - 21 (13) - - 137 (2,533) (2,388) 

Translation adjustment on Cost (387) (2,462) (5,205) - - (940) (1,291) (10,285) 

Internal transfers - - 4,157 - - 4 (30,967) (26,806) 

Expense to P&L - - - - - - (99) (99) 

Disposals /Desinvestment current year - - (1,720) (121) (957) (20) - (2,818) 

At December 31, 2016 36,273 37,077 122,748 82 912 12,050 1,363 210,505 

Additions - 146 163 97 - 405 3,343 4,154 

Capitalized from PIP to PPE and Expensed current Year - - - - - 2 (707) (705) 

Translation adjustment on Cost 143 550 1,417 - - (174) (3,031) (1,095) 

Internal transfers - - 121 - 5 - - 126 

Expense to P&L - - - - - - (101) (101) 

Disposals /Desinvestment current year - - (5) - (2) - (7) 

At December 31, 2017 36,416 37,773 124,444 179 917 12,281 867 212,877 

Depreciation and impairment 1 January 2016 (575) (15,718) (29,890) - (1,494) (11,542) - (59,219) 

Depreciation current year (16) (1,592) (8,481) (21) (28) (722) - (10,860) 

Depreciation disinvestment current year - - 542 - 824 19 - 1,385 

Translation adjustment on Accummulated Depreciation 98 2,308 4,117 - - 897 - 7,420 

Internal transfer - - - - - (4) - (4) 

At December 31, 2016 (493) (15,002) (33,712) (21) (698) (11,352) - (61,278) 

Depreciation current year (15) (1,665) (6,258) (2) (13) (430) - (8,383) 

Translation adjustment on Accummulated Depreciation (32) (90) (593) - - - - (715) 

Internal transfer - - (121) - (4) - - (125) 

Depreciation Disinvestment/Internal transfer current year - - (77) - - 2 - (75) 

At December 31, 2017 (540) (16,757) (40,761) (23) (715) (11,780) - (70,576) 

Net book value: 

At January 1, 2016 36,085 22,554 94,498 203 375 989 31,952 186,656 

At December 31, 2016 35,780 22,075 89,036 61 214 698 1,363 149,227 

At December 31, 2017 35,876 21,016 83,683 156 202 501 867 142,301


106 




(continued) 


(continued) 


4.4 Capital Investment in joint venture 



On 14 November 2014 Staatsolie entered as a limited partner with an interest of 25% into the partnership 

‘Suriname Gold Project C.V.’. Newmont Suriname LLC, a subsidiary of Newmont Mining Corporation, is 


the managing partner with a 75% interest in this partnership. Newmont Suriname LLC is a limited liability 


company formed pursuant to the laws of the State of Delaware, United States of America. 


determined The Suriname to be Gold impaired, Project at C.V. which encompasses time, the cumulative the exploration, loss is reclassified development to and the consolidated exploitation of statement the gold 

of mine profit ‘Merian’, or loss which in finance is a gold costs deposit and removed located from in the the eastern OCI. The part Group of Suriname evaluates close its to AFS the financial French Guiana assets 

to border. determine Construction whether of the the ability Merian and Gold intention project to (the sell them current in mine) the near began term after is still the appropriate. right of exploitation was 

granted. Suriname Gold Project C.V. commenced commercial gold production on October 1, 2016. 

(ii) The Financial Suriname liabilities Gold Project CV partnership is financed through monthly cash calls (capital contributions) 

which is the mechanism to fund approved operating costs and capital expenditures. Each partner is 


responsible for funding the partnership for its portion based on its participating interest. 


loss, Monthly loans the and partnership borrowings, allocates payables, capital as appropriate. contributions All which financial is the liabilities total compensation are recognized received initially by at fair the 

value partnership and, in in the exchange case of loans for selling and borrowings the partnership’s and payables, gold net production of directly attributable to transaction each partner costs. in 

The proportion Group’s to financial its respective liabilities participating include trade interest. and Staatsolie’s other payables, maximum loans exposure and borrowings to loss from including its interest bank 

overdrafts. in the Suriname Gold Project CV partnership equals the annual capital contributions. 

The Group’s interest in the Suriname Gold Project CV is accounted for in the consolidated financial 

Loans statements and borrowings using the equity method. The summarized financial information of the joint venture and 

This reconciliation is the category with the most carrying relevant amount to the of Group. the investment After initial and recognition, share in the interest profit bearing of the loans JV in and the 

borrowings consolidated are financial subsequently statements measured are set at out amortized below: cost using the EIR method. Gains and losses are 


through the EIR amortization process. Amortized cost is calculated by taking into account As at any January discount 1, 


or 

2016 

premium Summarized on statement acquisition of and financial fees position or costs of that Suriname are an Gold integral part of the EIR. The EIR amortization is 

included Project CV: in finance costs in the consolidated statement of profit or loss. This category generally applies to 

Current assets, including cash and cash equivalents $26,700 (2016: 


132,384 166,030 39,417 

$50,488) and inventories $78,691 (2016: $55,555) 

Non-current assets 1,063,955 1,067,057 876,221 

Current liabilities, including accounts payable $22,125 (2016: $9,521) 


(69,079) (80,497) (34,666) 

and due to related parties $19,053 (2016: $46,534) 

Petroleum Non-current products liabilities are valued at the lower of cost and net realizable (18,037) value. (11,368) (11,432) 

Partnership capital 1,109,223 1,141,222 869,540 


Proportion of the Group's ownership 25% 25% 25% 

• Carrying Purchase amount cost of is the valued investment on weighted average method 277,306 285,306 217,385 




Page 62





(continued) 


(continued) 



selling Summarised price statement in the ordinary of profit course or loss of Suriname business, Gold less Project estimated CV: costs of completion and the estimated 

costs Revenue to sell. 

643,136 117,154 

Cost of Sales (237,710) (33,810) 

Administrative expenses, including depreciation $109,818 (2016: $17,520) (136,224) (47,698) 


Management Fee (14,302) (3,189) 

appropriate Profit before tax proportion of depreciation, depletion and amortization 254,900 and overheads 32,457 based on normal 

Group's share of the profit for the year 63,725 8,114 



The Group had no contingent liabilities or capital commitments relating to its interest in the Suriname 


Gold Project CV as at December 31, 2017 and 2016 and January 1, 2016. The joint venture had no 


contingent liabilities or capital commitments as at December 31, 2017 and 2016 and January 1, 2016. 


Taking into account the structure and control of this partnership, Staatsolie’s interest is accounted for at 

the net equity value. The contribution of GoS of US$ 63,087, which represents a 4.8% beneficial 

Pipeline fill 

ownership in Suriname Gold Project C.V., relates to their financial contributions made in 2016 on 


Staatsolie’s behalf to the limited partnership agreement with Newmont Suriname LLC. These financial 


contributions were made by GoS as Staatsolie had limited funds available due to the sharp decline in oil 


prices in 2016. Those contributions are recognized as a current account with GoS as disclosed in note 


6.4 and was repaid in 2018 (note 8.1). The Suriname Gold Project C.V. as at December 31, 2017 and 


2016, were based on audited figures. 


















Page 63 

Page 107


108 




(continued) 


(continued) 


4.5 Goodwill and other intangible assets 


are those neither classified as held-for-trading Other nor intangible designated assets at fair value through profit or loss. 

E&P Data 

After initial measurement, AFS financial investments are subsequently Information measured at fair value with 

unrealized gains or losses recognized as OCI until the ERP investment Management is derecognized, at which time, the 

x US$ 1,000 

Goodwill implementation system Total 

cumulative Cost gain or loss is recognized in other operating income or expense, or the investment is 

At 1 January 2016 5,447 12,048 2,037 19,532 


Additions - - - - 

of Acquisition profit or of loss a sbusidiary in finance costs and removed - from the OCI. The - Group evaluates - its AFS -financial assets 

At 31 December 2016 5,447 12,048 2,037 19,532 

to Additions determine whether the ability and intention - to sell them in the - near term is still appropriate. - 

Acquisition of a sbusidiary - - - - 

Discontinued operations - - - - 

(ii) At 31 Financial December liabilities 2017 5,447 12,048 2,037 19,532 

Recognition Amortization and impairment measurement 

At 1 January 2016 - 1,205 1,222 2,427 

Financial Amortization liabilities are classified, at initial -recognition, as financial 2,410 liabilities 407 at fair value 2,817 through profit or 

At 31 December 2016 - 3,615 1,629 5,244 


Amortization - 2,409 408 2,817 

value Impairment and, in the case of loans and borrowings - and payables, - net of directly -attributable transaction - costs. 

At 31 December 2017 - 6,024 2,037 8,061 


overdrafts. 

Net book value 

At 31 December 2017 5,447 6,024 - 11,471 

At 31 December 2016 5,447 8,433 408 14,288 


At 1 January 2016 5,447 10,843 815 17,105 



Other intangible assets 


The balance at December 31, 2017 and 2016 of other intangible assets represents capitalized computer 


software with regard to ERP implementation of SAP and is amortized on a straight line basis over a 


remaining period of 3 years. 



Impairment testing of goodwill 

The Group performed its annual impairment test as at December 31, 2017 and 2016. The Group 


considered the overall decline in crude oil prices, oil construction and development activities around the 


world in 2015 and 2016 as potential indicators for impairment. 

Goodwill 


acquired through business combinations with indefinite live has been allocated to one CGU 

(GOw2). • Purchase The carrying cost is valued value on (net weighted assets including average method Goodwill) of this CGU is US$ 38,344 as at December 

31, Finished 2017, goods US$ 32,089 and work as at in progress: December 31, 2016 and US$ 34,756 as at January 1, 2016. 



Page 62 

Page 108






(continued) 


The recoverable amount of the GOw2 CGU of US$ 44,415 as at January 1, 2016, US$ 61,637 as at 


December 31, 2016 and US$ 69,570 as at December 31, 2017 has been determined based on a valuein-use 

(VIU) calculation using cash flow projections from financial budgets approved by senior 


The management cost of crude covering oil and a five-year refined period. products The is projected the purchase cash cost, flows the have cost been of updated refining, to including reflect the 

appropriate decreased demand proportion for of finished depreciation, oil products. depletion The and post-tax amortization weighted and average overheads cost of based capital on (WACC) normal 

operating discount rate capacity, applied determined to the cash on flow a weighted projections average is 12.27% basis. (2016: 12.40%), and cash flows beyond the 

The five-year net realizable period are value extrapolated of crude using oil and a 2% refined growth products rate that is based is the on same the as estimated the long-term selling average price in fuel the 

ordinary consumption course growth of business, rate for less the petroleum the estimated products costs sector. of completion As a result and of the the estimated analysis, costs management necessary did to 

make not identify the sale. an impairment for this CGU. The GOw2 CGU forms part of the downstream reportable 

segment. Applying a pre-tax WACC discount rate 20.04% (2016: 19.39%) to the cash flow projections 


provides the same VIU for the CGU. 

Pipeline fill 

Key assumptions used in value-in-use calculations 


The calculation of VIU for the GOw2 CGU is most sensitive to the following key assumptions: 


- Gross margin 


- Discount rates 


- Oil prices 


- Market share during the budget period 


- Growth rate used to extrapolate cash flows beyond the budget period 


Gross margins 


Gross margins are based on average values achieved in the three years preceding the start of the budget 


period. These are increased over the budget period for anticipated improvements in the efficiency of 


operations. An increase of 2% per annum was applied based on economic growth (quantities) of the 


CGU. 



Discount rates 


Discount rates represent the current market assessment of the risks specific to each CGU, taking into 



consideration the time value of money and individual risks of the underlying assets that have not been 

incorporated in the cash flow estimates. The discount rate calculation is based on the specific 


circumstances of the Group and its operating segments and is derived from its WACC, with appropriate 


adjustments made to reflect the risks specific to the CGU. The WACC takes into account both debt and 

equity, Impairment weighted losses 47.21% of continuing (2016: operations 46.83%) debt are versus recognized 52.79% in the (2016: consolidated 53.17%)equity, statement due of to profit the debt or loss to 

equity in those structure expense of the categories Group. The consistent cost of with equity the is function derived from of the the impaired expected asset, return except on investment for a property by the 

Group’s previously investors. revalued The where cost the of debt revaluation is based was on the taken interest-bearing to OCI. In this borrowings case, the the Group impairment is obliged is also to 


Page 63 

Page 109


110 




(continued) 


(continued) 


service. Segment-specific risk is incorporated by applying individual beta factors. The beta factors are 

AFS evaluated financial annually investments based on include publicly equity available and debt market securities. data. Equity investments classified as availablefor-sale 

Oil prices are those neither classified as held-for-trading nor designated at fair value through profit or loss. 

After Long term initial forecasted measurement, oil prices AFS are financial based on investments management’s are estimates subsequently and available measured market at fair data. value with 


cumulative Market share gain assumptions or loss is recognized in other operating income or expense, or the investment is 

determined These assumptions to be impaired, are important at which because time, the as cumulative well as loss using is industry reclassified data to for the growth consolidated rates statement (as noted 

of below), profit management or loss in finance assesses costs how and removed the CGU’s from position, the OCI. relative The to Group its competitors, evaluates its might AFS change financial over assets the 

to forecast determine period. whether Management the ability expects and intention the Group’s to sell share them of in the oil near retail term products is still appropriate. market to be stable over 

the forecast period. 


Recognition 

Growth rate 

and 

estimates 

measurement 

Financial 

Rates are 

liabilities 

based on 

are 

economic 

classified, 

growth 

at initial 

rates, 

recognition, 

growth domestic 

as financial 

product 

liabilities 

and relevant 

at fair 

published 

value through 

research. 

profit or 


value 

Sensitivity 

and, in 

to 

the 

changes 

case of 

in 

loans 

assumptions 

and borrowings and payables, net of directly attributable transaction costs. 

The 

With 

Group’s 

regard to 

financial 

the assessment 

liabilities include 

of VIU 

trade 

for the 

and 

GOw2 

other 

CGU, 

payables, 

management 

loans and 

believes 

borrowings 

that 

including 

there are 

bank 

no 

overdrafts. 

reasonably possible changes in any of the above key assumptions that would cause the carrying value of 

the CGU to materially exceed its recoverable amount. 


4.6 Impairment testing of other non-current assets 


borrowings 

Management 

are 

considered 

subsequently 

the overall 

measured 

decline 

at amortized 

in crude oil 

cost 

prices, 

using 

oil 

the 

construction 

EIR method. 

and development 

Gains and losses 

activities 

are 

recognized 

around the 

in 

world 

the consolidated 

in 2015 and 

statement 

2016 as 

of 

potential 

profit or 

indicators 

loss when 

for 

the 

impairment, 

liabilities are 

therefore 

derecognized 

an impairment 

as well as 

through 

analysis 

the 

for 

EIR 

two 

amortization 

CGUs (three 

process. 

oil fields 

Amortized 

and the 

cost 

refinery) 

is calculated 

was performed. 

by taking 

As 

into 

a 

account 

result of 

any 

the 

discount 

analysis, 

or 

premium 

management 


did not identify 

and 

an 

fees 

impairment 

or costs that 

for the 

are 

CGUs. 

an integral part of the EIR. The EIR amortization is 










Page 62 

Page 110



Notes 


to the 

Maatschappij 

Consolidated 

Suriname 

financial statements 

N.V. 

for the years ended December 31, 2017 and 2016 

(continued) 


Inventories 4.7 Provisions 

are stated at the lower of cost and net realizable value. Net realizable value is the estimated 



Decomissioning 

Decomissioning Decomissioning Environmental Other 

production field & 

refinery 

power plant 

risk 

provisions 

The x US$ cost 1,000 of crude oil and refined products facilities is the purchase cost, the cost of refining, including the 

Total 

At January 1, 2016 66,283 8,559 203 2,475 1,600 79,120 

appropriate Arising during the proportion year of depreciation, depletion and - amortization and - overheads based - on normal 149 - 149 

Write-back of unused provisions - - - - - 


Discount rate adjustment & imputed interest (31,563) (3,729) (121) (36) - (35,449) 

Unw inding of discount 5,342 709 16 - - 6,067 

The Utilisation net realizable value of crude oil and refined products - is based on - the estimated selling - price in the - - - 

At December 31, 2016 40,062 5,539 98 2,588 


1,600 49,887 

Arising during the year - - - 157 1,758 1,915 


Write-back of unused provisions - - - - - 

Discount rate adjustment & imputed interest 35,242 2,776 101 36 - 38,155 

Materials Unw inding of and discount supplies are valued using the weighted 4,118 average cost method. 569 10 - - 4,697 

Utilisation - - - - (1,600) (1,600) 

At December 31, 2017 79,422 8,884 209 2,781 1,758 93,054 

Pipeline fill 

Comprising: 

Crude Current at oil, January which 1, 2016 is necessary to bring a pipeline into - working order, is - treated as a part - of the related - - - 

Non-current at January 1, 2016 66,283 8,559 203 2,475 1,600 79,120 

pipeline. This is on the basis that it is not held for 66,283 sale or consumed 8,559in a production 203 process, but 2,475 is 

- 

necessary Comprising: to the operation of a facility during more than one operating cycle, and its cost cannot be 

1,600 79,120 

Current at December 31, 2016 - - - - 1,600 1,600 

recouped 

Non-current at 

through 

December 

sale 

31, 2016 

(or is significantly impaired). 

40,062 

This applies even 

5,539 

if the part of inventory 

98 

that 

2,588 

is 

- 48,287 

deemed to be an item of property, plant and equipment 40,062 cannot be separated 5,539 physically 98 from the rest of 2,588 

Comprising: 

1,600 49,887 

inventory. Current at December It is valued 31, 2017 at cost and is depreciated over the - useful life of the - related asset. - - - - 

Non-current at December 31, 2017 79,422 8,884 209 2,781 1,758 93,054 

79,422 8,884 209 2,781 1,758 93,054 








112 





(continued) 


Decommissioning AFS financial investments provision include equity and debt securities. Equity investments classified as availablefor-sale 

Group are makes those neither full provision classified for the as held-for-trading future cost of decommissioning nor designated at oil fair wells value and through production profit facilities, or loss. 

The 

on After a discounted initial measurement, basis on the AFS installation financial of investments those wells are and subsequently facilities. The measured decommissioning at fair value provision with 

represents unrealized gains the present or losses value recognized of decommissioning as OCI until costs the investment relating to is oil derecognized, and gas properties, at which which time, are the 

expected cumulative to gain be incurred or loss up is to recognized 2055, when in the other producing operating oil properties income or are expense, expected or to the cease investment operations. is 

These determined provisions to be have impaired, been at created which time, based the on cumulative the Group’s loss internal is reclassified estimates. to the consolidated statement 

In 

of profit 

addition, 

or loss 

the 

in 

Group 

finance 

makes 

costs 

full 

and 

provision 

removed 

for 

from 

the 

the 

future 

OCI. The 

cost 

Group 

of decommissioning 

evaluates its AFS 

the 

financial 

refinery, 

assets 

on a 

discounted 

to determine 

basis 

whether 

on the 

the 

installation 

ability and 

of 

intention 

the refinery. 

to sell 

The 

them 

decommissioning 

in the near term 

provision 

is still appropriate. 

represents the present 

value of decommissioning costs relating to the refinery, which are expected to be incurred up to 2040, 

when 

(ii) Financial 

the refinery 

liabilities 

expected to cease operations. This provision has been created based on the Group’s 

internal Recognition estimates and measurement 

utilizing a third party estimating the dismantlement cost. 

Lastly, Financial the liabilities Group makes are classified, full provision at initial for recognition, the future as cost financial of decommissioning liabilities at fair the value power through plant, profit on or a 

discounted loss, loans and basis borrowings, on the installation payables, of as the appropriate. power plant. All The financial decommissioning liabilities are recognized provision represents initially at the fair 

present value and, value in the of decommissioning case of loans and costs borrowings relating and to the payables, power plant, net of which directly are attributable expected transaction to be incurred costs. up 

to The 2055, Group’s when financial the power liabilities plant expected include trade to cease and operations. other payables, This provision loans and has borrowings been created including based bank on 

the overdrafts. Group’s internal estimates utilizing a third party estimating the dismantlement cost. 

Assumptions based on the current economic environment have been made, which management believes 


form a reasonable basis upon which to estimate the future liability. These estimates are reviewed 


regularly to take into account any material changes to the assumptions. However, actual 


decommissioning costs will ultimately depend upon future market prices for the necessary 

decommissioning 

recognized in the 

works 

consolidated 

required 

statement 

that will reflect 

of profit 

market 

or loss 

conditions 

when the 

at 

liabilities 

the relevant 

are derecognized 

time. Furthermore, 

as well 

the 

as 


timing of decommissioning is likely to depend on when the fields cease to produce at economically viable 


rates. This, in turn, will depend upon future oil and gas prices, which are inherently uncertain. 


The discount rate used in the calculation of the provision as at December 31, 2017 is 8.38% (2016: 

10.28%). interest-bearing loans and borrowings. 

Other provisions 


A provision at fair value of US$ 1,758 as at December 31, 2017 (US$ 1,600 as of December 31, 2016 


and January 1, 2016) mainly comprise provisions for litigation or contractual claims. The claims are 

subject Raw materials: to legal arbitration and are not expected to finalize during 2018. This amount remained 

unchanged • Purchase at the cost reporting is valued date. on weighted average method 

Environmental Finished goods risk and provision work in progress: 

GOw2 • Cost purchased of direct Chevron materials in and 2011 labor which and included a proportion their of marketing manufacturing activities overheads in Suriname based of on 22 normal petrol 

stations operating and 3 capacity oil terminals. but excluding These sites borrowing will be remediated costs in a nine year timeframe. The present value of 

the estimated costs as at December 31, 2017 is US$ 2,781 (December 31, 2016 is US$ 2,588 and 

Page 62





(continued) 


(continued) 


January 1, 2016 is US$ 2,475). The amount recognized is the best estimate calculated by management 


of the expenditure required. 


The 

4.8 

cost 

Employee 

of crude oil 

defined 

and refined 

benefit 

products 

liabilities 

is the purchase cost, the cost of refining, including the 


operating The Group capacity, has three determined types of employee on a weighted benefit average plans, basis. namely pensions, post-employment benefits and 

other long-term employee benefit plans. A summary of the net employee benefit liabilities for the different 


benefits are shown in the table below. 



As at December 31, As at December 31, As at January 1, 

x US$ 1,000 

Materials and supplies are valued using the weighted 2017average cost method. 2016 

2016 

Pension Plans 

Employee pension plan 13,487 34,121 29,231 

Pipeline Executive fill pension plan 646 1,197 628 

GOw2 retiree pension plan 96 112 129 

Crude 

Post-employment 

oil, which is 

benefit 

necessary 

plans 

to bring a pipeline into working 

- 

order, is treated as a part of the related 

- 

pipeline. Retiree This Medical is on Plan the Staatsolie basis that it is not held for sale 13,506 or consumed in 15,441 a production process, 10,116 but is 

Retiree Medical plan GOw2 492 424 783 

necessary Retiree Medical to the Plan operation SPCSof a facility during more than 240 one operating cycle, 222and its cost cannot 143 be 

recouped Pension through gratuity Staatsolie sale (or is significantly impaired). This 2,965applies even if 2,734 the part of inventory 2,522 that is 

Pension gratuity SPCS 18 15 12 

deemed Funeral to grant be an plan item Staatsolie of property, plant and equipment cannot 894 be separated 833 physically from the 763 rest of 

inventory. Funeral grant It is valued plan SPCS at cost and is depreciated over the useful 8 life of the related 7asset. 

5 

Supplementary Provision Board 

733 646 589 

members 

Other long-term employee benefit plans - - 


Jubilee gratuity Staatsolie 6,602 6,430 6,072 

The Jubilee Group gratuity assesses SPCS at each reporting date whether there 103 is an indication that an 87asset may be impaired. 71 

Jubilee gratuity GOw2 93 89 111 


Additional holiday allowance Staatsolie 2,839 2,681 2,485 


generating Additional units holiday (CGU) allowance fair value SPCSless costs of disposal 30 and its value in use. 30It is determined for 55 an 

individual asset, unless the asset does Total not generate cash 42,752 inflows that are 65,069 largely independent 53,715 of those 


Pensions and other post-employment benefit plans 


The Group has two defined benefit pension plans (funded), one for the employees and one for the 



directors. The employee pension plan is a final salary plan and requires contributions to be made to a 

separately administered fund. The directors’ pension plan is an insured plan. In addition, the Group 


provides certain post-employment benefits to employees (unfunded) such as healthcare, excedent 


gratuity, funeral grants, pension gratuity, jubilee and additional holiday allowances. 





Page 63 

Page 113


114 



(continued) 

Pensions Available-for-sale (AFS) financial investments 

Employee pension plan 



The employee pension plan provides entitlements to retirement and disability pension for the benefit of 

the participant and widow’s, widower's and orphans’ pension for the benefit of the survivors. The pension 


entitlements are accrued time-proportionately. 


The pension entitlements are determined according to a formula based on the pensionable salary and an 


employee accrual rate of 2% per annum. The last pensionable salary also applies to past service. Hence, 


increase of pensionable salary in future years will lead to an increase of accrued pension entitlements. 


According to the formal terms of the plan, for every year the pensionable salary is determined by the 


Board of the pension fund according to a formula. 

The (ii) Financial pension liabilities base percentage for financial year 2016 has been set at l00% of the base salary. The 

pension base percentage for financial year 2017 has not yet been determined by the Board of the 


pension fund. The annual actuarial valuation, taking into account the funding as at December 31, 2016 


and the salary increased as at January 1, 2017, has led to the conclusion that a pension base percentage 


of 100% is possible for financial year 2017. Therefore, it is assumed that pensionable salary for 2017 will 


be set at 100% of the salary as at January 1, 2017. 


The overdrafts. retirement pension commences upon reaching the retirement age of 60. However, a retirement age 

of 55 applies to employees in certain special categories. The retirement pension amounts to a maximum 

of Loans 70% and of the borrowings pension base on the retirement date. The pension accrual rate is 2%. 


Annually, the pensions in payment and deferred pensions are adjusted on the basis of excess interest, 


which is the difference between the return on the pension assets and the actuarial interest of 4%, which is 


used to determine the present value of the pension obligations of the fund. 


The 

premium 

employee 


pension 

and 

plan 

fees 

is administered 

or costs that are 

by the 

an integral 

“Stichting 

part 

Pensioenfonds 

of the EIR. The 

voor 

EIR 

Werknemers 

amortization 

of 

is 

Staatsolie Maatschappij Suriname N.V.” (Pension Fund for Employees of Staatsolie Maatschappij 


Suriname N.V.), for which Staatsolie has entered into an agreement with the fund. 


The plan is financed by contributions and by the returns on the plan assets. The employer’s and 

employee’s m. Inventories 

contributions are limited to a maximum percentage of the participant’s salary as set by the 

labor Petroleum agreement. products are valued at the lower of cost and net realizable value. 






Page 114 62





(continued) 

Inventories 

Employee pension 

are 

plan 

stated at the lower of cost and net realizable value. Net realizable value is the estimated 

selling 2017 changes price in the in defined the ordinary benefit obligation course and fair of value business, of the plan assets. less estimated costs of completion and the estimated 

Pension cost charged to profit or 

Remeasurement gains/(losses) in other comprehensive income 


loss 

Return on 

plan 

The cost of crude oil and refined products is the purchase assets cost, changes the cost changes of refining, including the 

Sub-total 

Sub total 

Service Net Interest 

Benefits (excluding arising from arising from Experience 

x US$ 1,000 

appropriate proportion 

1.1.2017 


included 

cost 

depletion 

in 

expense 

and amortization and overheads based on 

included 

paid 

normal 

in 

amounts 

adjustments 

profit or loss 

OCI 

included in 


Defined benefit 

net interest 

expense) 

Actuarial 

changes in 

demographic 

assumptions 


obligation 


Fair value of plan 

make 

assets 

the sale. 


Pipeline fill 

Sub-total 

Sub total 



Crude oil, which 1.1.2016 is necessary to bring included a pipeline in into working order, is treated as a part of the included related in 

cost expense 

paid amounts changes in changes in adjustments 


OCI 

included in demographic financial 


net interest assumptions assumptions 

expense) 



obligation 




assets 



Actuarial 

changes in 

financial 

assumptions 

Contribution by 

employer 


employee 


(139,070) (7,159) (6,258) (13,417) 1,172 - - 23,707 1,807 25,514 - - (125,801) 

104,949 4,849 4,849 (1,172) (3,099) - - - (3,099) 5,090 1,697 112,314 

Benefit liability (34,121) (7,159) (1,409) (8,568) - (3,099) - 23,707 1,807 22,415 5,090 1,697 (13,487) 

2016 changes in the defined benefit obligation and fair value of the plan assets. 

Return on 

plan 

assets 

Actuarial 

changes 

Actuarial 

changes 


employer 


employee 

31.12.2016 

(122,487) (6,297) (5,634) (11,931) 947 - - (5,266) (333) (5,599) - - (139,070) 

93,256 4,442 4,442 (947) 629 - - - 629 5,677 1,892 104,949 

Benefit liability (29,231) (6,297) (1,192) (7,489) - 629 - (5,266) (333) (4,970) 5,677 1,892 (34,121) 








116 





(continued) 


The major categories of the employee pension plan assets at fair value are, as follows: 

AFS x US$ financial 1,000 investments include equity and debt 2017securities. 2016 Equity January investments 1, 2016 classified as availablefor-sale 

Investments are quoted those in neither active markets: classified as held-for-trading nor designated at fair value through profit or loss. 

Securities in foreign mutual funds 6,625 5,964 6,227 


Unquoted investments: 

Equity instruments (international) 5,997 5,817 6,447 


cumulative Available-for-sale gain instruments or loss is recognized in other 1,876 operating income 475 or expense, 447 or the investment is 

Property 44,499 44,499 39,145 


Loans receivables 26,071 28,012 28,964 

Term deposits 14,404 11,404 6,904 

Net other receivables 447 2,818 72 

Cash and cash equivalents 12,395 5,960 5,050 



Fair value of assets 112,314 104,949 93,256 



Executive Financial liabilities pension are plan classified, at initial recognition, as financial liabilities at fair value through profit or 

The loss, executive loans and pension borrowings, plan payables, is a final pay as appropriate. scheme; the All pension financial base liabilities is equal are to recognized the salary. initially The pension at fair 

plan value provides and, in the entitlements case of loans to retirement and borrowings and disability and payables, pension net for of the directly benefit attributable of the participant transaction and costs. their 

widow's/widower's The Group’s financial and liabilities orphans’ include pension trade for the and benefit other of payables, their spouse loans and and children. borrowings including bank 

The overdrafts. retirement pension commences upon reaching the age of 60 and amounts to: 

1. for Board members designated by Staatsolie: at retirement 70% of the last salary; 

2. Loans for and other borrowings Board members: per year of service, up to a maximum of 28 years of service, 2.5% of the 

This last is salary. the category most relevant to the Group. After initial recognition, interest bearing loans and 


The recognized pension in entitlements the consolidated are accrued statement time-proportionately. of profit or loss when The the disability liabilities pension are derecognized is equal to the as potential well as 

retirement through the pension. EIR amortization The widow’s/widower’s process. Amortized pension cost is is 70% calculated of the by (potential) taking into retirement account any pension. discount Upon or 

termination premium on of acquisition employment and of fees a participant or costs who that has are an participated integral part in the of scheme the EIR. for The less EIR than amortization 3 years, the is 

contributions included in finance paid by costs the in director the consolidated shall be refunded. statement As of soon profit as or a loss. participant This category who has generally participated applies in the to 

plan interest-bearing for at least 3 loans years, and the borrowings. director shall be entitled to the pension entitlements accrued up to the date of 

termination of employment. It is noted that the 3-year period on the basis of the “Wet Pensioenfondsen en 

Voorzieningsfondsen” m. Inventories should be reduced to one year or less. 

Pensions Petroleum in products payment are and valued deferred at the pensions lower of may cost be and increased net realizable in the value. event of a "general increase in the 

cost Raw of materials: living". This possibility has not been applied yet. Pensions in payment and deferred pensions shall, 

in • any Purchase case, be cost adjusted is valued annually on weighted on the basis average of profit method sharing based on excess interest, arising from the 

agreement with the insurance company. 


The • Cost pension of direct entitlements materials arising and labor from and the a plan proportion are insured of manufacturing with Assuria overheads Levensverzekeringen based on normal N.V. 

(Assuria), operating for capacity which Staatsolie but excluding has borrowing entered into costs an agreement with, which provides for profit sharing 

based on excess interest on assets of Assuria. 

Page 62




(continued) 

Inventories The participants are stated and Staatsolie at the lower contribute of cost to and the net financing realizable of this value. plan. Net The realizable participants value contribute is the estimated a set 

selling percentage price of in their salary. ordinary Other course costs of of business, the plan are less fully estimated borne by costs Staatsolie. of completion and the estimated 


The plan asset value for this insured executive pension plan consist of the insurance policy covering 

The participants. cost of As crude the oil insurance and refined policy products exactly is matches the purchase the amount cost, and the timing cost of of refining, the accrued including pension the 

appropriate entitlements proportion of the participants, of depreciation, the fair value depletion of the and insurance amortization policy has and been overheads set at the based present on value normal of 

operating the related capacity, obligations determined excluding on any a weighted effects of average future salary basis. increases. 


x US$ 1,000 2017 2016 January 1, 2016 


make Fair value the sale. of assets 3,947 2,818 2,520 


Pipeline fill 























Page 117 63



Staatsolie Notes to the Maatschappij Consolidated Suriname financial N.V. statements for the years ended December 31, 2017 and 2016 

Notes (continued) to the Consolidated financial statements for the years ended December 31, 2017 and 2016 (continued) 

Executive pension plan 


2017 changes in the defined benefit obligation and fair value of the plan assets. 




loss 


Return on 

plan 

The cost of crude oil and refined products is the purchase 

assets 

cost, 

changes 

the cost 

changes 

Sub-total 

of refining, including Sub total the 



x US$ 1,000 1.1.2017 

included in 

included in 

appropriate proportion 

cost 


expense 

depletion 

paid 

profit or loss and 

amounts 

amortization 

changes 

and 

in changes 

overheads 

in adjustments 

based on OCI normal 





expense) 

Actuarial 

The obligation net realizable value of crude oil and refined products is based on the estimated selling price in the 

ordinary Fair value of plan course of business, less the estimated costs of completion and the estimated costs necessary to 

assets 



Actuarial 

Pipeline fill 

Sub-total 

Sub total 


Benefits 

Experience 

1.1.2016 

included in 

included in 

cost expense 

paid amounts changes in changes in adjustments 

Crude oil, which is necessary to bring profit a or pipeline loss into working order, is treated as a part of the OCI 


related 


pipeline. This is on the basis that it is not held for sale 

expense) 

or consumed in a production process, but is 


necessary 

obligation 

to the operation of a facility during more than one operating cycle, and its cost cannot be 



assets 




employer 


employee 


(4,015) (254) (181) (435) - - - (220) 77 (143) - (4,593) 

2,818 - 155 155 - (282) (282) 1,224 32 3,947 

Benefit liability (1,197) (254) (26) (280) - (282) - (220) 77 (425) 1,224 32 (646) 


Return on 

plan 

assets 

(excluding 

Actuarial 

changes 

arising from 

Actuarial 

changes 

arising from 


employer 


employee 

31.12.2016 

(3,146) (769) (142) (911) - - (58) 100 42 - (4,015) 

2,518 117 117 22 - - - 22 131 30 2,818 

Benefit liability (628) (769) (25) (794) - 22 - (58) 100 64 131 30 (1,197) 












(continued) 


GOw2 retiree pension plan 


GOw2 has a long-term pension obligation regarding eight former Chevron retirees and widowers. The 


payment to those retirees are made by GOw2 out of funds deposited by Chevron at the time of the 


acquisition in 2011. The remaining balance as at December 31, 2017 is US$ 95, while the remaining 


balance as at December 31, 2016 and January 1, 2016 are US$ 112, and US$ 129, respectively. 


Post-employment The net realizable value benefits of crude oil and refined products is based on the estimated selling price in the 

Retiree ordinary medical course of plan business, less the estimated costs of completion and the estimated costs necessary to 

Retired make the employees sale. of Staatsolie, GOw2 and SPCS whose employment was terminated due to reaching 

the retirement age after a specified number of years of service, as well as those who are part of their 


family, shall be entitled to medical care at the expense of the Group. Entitlements shall also be granted to 

retired employees of Staatsolie whose employment was terminated due to disability with the entitlement 

Pipeline fill 

to a disability pension, as well as those who are part of their family at that time. There is no requirement 


for a minimum service. 



Pension gratuity plan 


Staatsolie and SPCS employees are eligible for a gratuity upon retirement. The amount of the gratuity 


depends on the years of service. Permanent employees whose service until the retirement date is at least 


10 years, shall be eligible for the gratuity. 


Funeral grants plan 


In the event of death of a retired employee of Staatsolie and SPCS, whose employment was terminated 


due to reaching the retirement age after a specified number of service years and in the event of death of 


their spouse, a funeral grant shall be paid by Staatsolie. Retired employees whose employment was 


terminated due to disability with the entitlement to a disability pension, as well as those who are part of 


their family at that time are also eligible to the funeral grant plan and there is no requirement for a 


minimum service. 




Excedent gratuity plan (Supplementary provision for board members) 

Board members shall be eligible for an excedent gratuity upon retirement or earlier honorable termination 


of employment with Staatsolie. The amount of the excedent gratuity shall depend on the number of years 


of service, including years of service at Staatsolie before the date of appointment as board member, if 


applicable. 




Page 63





Notes (continued) to the Consolidated financial statements for the years ended December 31, 2017 and 2016 (continued) 

Retiree medical plan Staatsolie 


selling 2017 changes price in the in defined the ordinary benefit obligation course and of fair business, value of the plan less assets. estimated costs of completion and the estimated 



loss 

Return on 

plan 


assets changes 

Sub-total 

Change in 


Benefits (excluding arising from Experience 

appropriate x US$ 1,000 proportion 1.1.2017 of depreciation, depletion included in and amortization and overheads based exchange on normal 

cost expense 

paid amounts 

adjustments 


rate 

operating capacity, determined on a weighted average basis. included in 

net interest 

expense) 

The Defined net benefit realizable value of crude oil and refined products is based on the estimated selling price in the 

obligation 


make 

Fair value 

the 

of plan 

sale. 


Actuarial 

changes in 

financial 

assumptions 

Pipeline fill 

Actuarial 

Crude oil, which is necessary to bring a pipeline into working assets order, is changes 

Sub-total 

treated as a part of 

Change 

the related 

in 


Benefits (excluding arising from Experience 

1.1.2016 

included in 

exchange 

pipeline. This is on the basis cost that expense it is not held for sale paid or amounts consumed changes in a in production adjustmentsprocess, but is 


rate 

included in financial 

necessary to the operation of a facility during more than one net interest operating assumptions cycle, and its cost cannot be 

expense) 

recouped 


through sale (or is significantly impaired). This applies even if the part of inventory that is 

obligation 


inventory. 


It is valued at cost and is depreciated over the useful life of the related asset. 







Sub total 

included in 

OCI 


employer 


(21,834) (1,249) (975) (2,224) 122 - 3,338 152 240 3,730 - (20,206) 

assets 

6,393 - 291 291 (116) (89) - - - (89) 221 6,700 

Benefit liability (15,441) (1,249) (684) (1,933) 6 (89) 3,338 152 240 3,641 221 (13,506) 



Return on 

plan 

Sub total 

included in 

OCI 


employer 

31.12.2016 

(16,165) (907) (722) (1,629) 112 - (3,765) (387) - (4,152) - (21,834) 

assets 

6,049 - 275 275 (103) (59) - - - (59) 231 6,393 

Benefit liability (10,116) (907) (447) (1,354) 9 (59) (3,765) (387) - (4,211) 231 (15,441)



Notes Notes to to the the Consolidated financial statements for for the the years ended December 31, 2017 and 2016 

(continued) 

The Inventories plan asset are value stated of at the the Staatsolie lower of cost retiree and medical net realizable plan is value. provided Net by realizable the insurance value company is the estimated where 

the selling plan price assets in are the incorporated ordinary course in an of annuity business, insurance less estimated policy. The costs fair value of completion of plan assets and the is the estimated sum of 

the costs surrender to sell. value and the estimated excess interest, as shown below: 




Surrender value 6,621 6,276 5,951 

operating Excess interest capacity, determined on a 81weighted 117 average basis. 98 

Fair value of assets 6,702 6,393 6,049 



Retiree medical plan others 



in US$ GOw2 SPCS Total GOw2 SPCS Total 

Defined benefit obligation as at 

Materials and supplies are valued (423,847) using the (221,957) weighted average (645,804) cost method. (783,047) (143,393) (926,440) 

January 1 

Interest cost (47,968) (9,889) (57,857) (48,233) (6,453) (54,686) 

Pipeline fill 

Current service cost (36,750) (36,455) (73,205) (35,033) (22,009) (57,042) 

Crude Net benefit oil, which is necessary to bring a pipeline into working order, is treated as a part of the related 

(84,718) (46,344) (131,062) (83,266) (28,462) (111,728) 

expense(recognized in P&L) 


necessary Benefits paid to the operation of a facility 2,146 during - more than 2,146 one operating 1,082 cycle, and - its cost 1,082cannot be 


Currency translation 4,222 2,211 6,433 361,390 - 361,390 

deemed Experience to different be an than item assumed of property, 7,965 plant and (12,192) equipment (4,227) cannot be separated 26,509 physically (5,802) from 20,707the rest of 

Changes in assumptions 2,543 38,320 40,863 53,485 (44,300) 9,185 


Sub total included in OCI 14,730 28,339 43,069 441,384 (50,102) 391,282 


n. Impairment of non-financial (491,689) assets (239,962) (731,651) (423,847) (221,957) (645,804) 

December 31 
















Page 63


122 





(continued) 


Funeral grant benefits 



Defined benefit are those obligation neither as classified at as held-for-trading nor designated at fair value through profit or loss. 

in US$ Staatsolie SPCS Total Staatsolie SPCS Total 

(832,772) (6,620) (839,392) (763,419) (5,291) (768,710) 

January 1 


unrealized Interest cost gains or losses recognized (37,360) as OCI until (298) the investment (37,658) is derecognized, (34,247) (238) at which (34,485) time, the 

cumulative Current service gain cost or loss is recognized (41,047) in other (1,090) operating (42,137) income or (37,845) expense, or (796) the investment (38,641) is 

Net benefit expense(recognized in 

determined to be impaired, at which time, (78,407) the cumulative (1,388) loss (79,795) is reclassified (72,092) to the consolidated (1,034) (73,126) 

P&L) 

statement 


Benefits paid 879 - 879 - - - 


Experience different than assumed (10,031) (364) (10,395) (12,009) (209) (12,218) 

Changes in assumptions 26,806 244 27,050 14,748 (86) 14,662 


Sub total included in OCI 16,775 (120) 16,655 2,739 (295) 2,444 



(893,525) (8,128) (901,653) (832,772) (6,620) (839,392) 

Financial December liabilities 31 are classified, at initial recognition, as financial liabilities at fair value through profit or 




Pension gratuity benefits 


overdrafts. 

x US$1 Staatsolie SPCS Total Staatsolie SPCS Total 


(2,734,095) (15,041) (2,749,136) (2,522,391) (11,797) (2,534,188) 

January 1 


This Interest is cost the category most relevant (120,970) to the Group. (677) After (121,647) initial recognition, (111,073) interest bearing (531) loans (111,604) and 

Current service cost (161,902) (2,140) (164,042) (143,977) (1,717) (145,694) 

borrowings Net benefit are subsequently measured at amortized cost using the EIR method. Gains and losses are 

(282,872) (2,817) (285,689) (255,050) (2,248) (257,298) 

recognized 

expense(recognized 

in the consolidated 

in P&L) 

statement of profit or loss when the liabilities are derecognized as well as 

through Benefits paid the EIR amortization process. 75,927 Amortized -cost is calculated 75,927 by taking 68,055 into account - any discount 68,055or 

premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization 

- 

is 

Experience different than assumed (23,558) (83) (23,641) 40,434 (227) 40,207 

included Changes in in assumptions finance costs in the consolidated - statement - of profit - or loss. This (65,143) category generally (769) applies (65,912) to 


Sub total included 

loans 

in OCI 


(23,558) (83) (23,641) (24,709) (996) (25,705) 


(2,964,598) (17,941) (2,982,539) (2,734,095) (15,041) (2,749,136) 

December 

m. 

31 

Inventories 







Page 62






(continued) 


Supplementary provision board members 

selling x US$1 price in the ordinary course of business, 2017 less estimated 2016 costs of completion and the estimated 

costs Defined to benefit sell. obligation as at January 1 (646,212) (588,938) 

The Interest cost cost of crude oil and refined products (29,079) is the purchase (26,502) cost, the cost of refining, including the 

Current service cost (38,632) (37,277) 

appropriate Net benefit expense(recognized proportion of depreciation, in P&L) depletion (67,711) and amortization (63,779) and overheads based on normal 


Benefits paid - - 


Experience different than assumed (19,326) 16,067 

ordinary Changes in course assumptions of business, less the estimated costs - of completion (9,562) and the estimated costs necessary to 

make Sub total the included sale. in OCI (19,326) 6,505 

Materials Defined benefit and supplies obligation are as at valued December using 31 the weighted (733,249) average (646,212) cost method. 

Pipeline fill 

Other long-term employee benefits 


pipeline. Jubilee gratuity This is on plan the basis that it is not held for sale or consumed in a production process, but is 

necessary Staatsolie, to SPCS the operation and GOw2 of employees a facility during are eligible more than to receive one operating a jubilee cycle, gratuity and based its cost on a cannot specified be 

recouped number of through service years. sale (or The is amount significantly of the impaired). gratuity depends This applies on the even jubilee if the and part varies of with inventory the numbers that is 

deemed of service to years be an as item stated of property, in the labor plant agreement. and equipment cannot be separated physically from the rest of 


Jubilee benefits 


x US$1 Staatsolie SPCS GOw2 Total Staatsolie SPCS GOw2 Total 



(6,429,764) (87,307) (88,708) (6,605,779) (6,072,395) (70,605) (110,857) (6,253,857) 

The January Group 1 assesses at each reporting date whether there is an indication that an asset may be impaired. 


Interest cost (195,105) (3,929) (9,674) (208,708) (179,644) (3,177) (6,865) (189,686) 

Current service cost (513,215) (11,620) (8,488) (533,323) (447,343) (10,143) (4,982) (462,468) 

Net benefit expense(recognized 

in P&L) 

(708,320) (15,549) (18,162) (742,031) (626,987) (13,320) (11,847) (652,154) 



individual Benefits paid asset, unless the 962,453 asset does not - generate 6,895 cash 969,348 inflows that 884,634 are largely - independent - of 884,634 those 

from Currency other translation assets or groups of - assets. - Where the 883 carrying 883 amount of - an asset - or CGU 51,163 exceeds 51,163 its 

Experience different than assumed (378,782) (444) 5,865 (373,361) (576,828) (1,909) (16,239) (594,976) 

Changes in assumptions (47,565) - - (47,565) (38,188) (1,473) (928) (40,589) 

Sub total included in the P&L (426,347) (444) 6,748 (420,043) (615,016) (3,382) 33,996 (584,402) 



December 31 



(6,601,978) (103,300) (93,227) (6,798,505) (6,429,764) (87,307) (88,708) (6,605,779) 







Page 63 

Page 123


124 





(continued) 


Additional holiday allowances 



Staatsolie and SPCS employees are eligible for an additional holiday allowance for a set number of 

months of salary based on their years of service as stated in the labor agreement. 



cumulative Additional holiday gain allowance or loss is recognized in 2017 other operating income or expense, 2016 or the investment is 

x US$1 Staatsolie SPCS Total Staatsolie SPCS Total 



(2,680,707) (29,703) (2,710,410) (2,485,054) (55,465) (2,540,519) 

of January profit or 1 loss in finance costs and removed from the OCI. The Group evaluates its AFS financial assets 


Interest cost (89,298) (910) (90,208) (78,643) (1,540) (80,183) 

Current service cost (1,243,907) (12,359) (1,256,266) (1,080,187) (8,580) (1,088,767) 

(ii) Net Financial benefit liabilities 

(1,333,205) (13,269) (1,346,474) (1,158,830) (10,120) (1,168,950) 

expense(recognized in P&L) 


Benefits paid 1,530,076 20,938 1,551,014 1,471,270 40,529 1,511,799 


loss, Experience loans different and borrowings, than assumed payables, (354,859) as appropriate. (8,068) (362,927) All financial (503,878) liabilities are (4,612) recognized (508,490) initially at fair 

value Changes and, in assumptions in the case of loans and borrowings - - and payables, - net of (4,215) directly attributable (35) transaction (4,250) costs. 

Sub total included in the P&L (354,859) (8,068) (362,927) (508,093) (4,647) (512,740) 


overdrafts. 


(2,838,695) (30,102) (2,868,797) (2,680,707) (29,703) (2,710,410) 

December 31 
















Page 62






(continued) 


The significant assumptions used in determining pension, post-employment healthcare and other longterm 

employee benefit obligations for the Group’s plans are shown below: 



The cost of crude oil and refined products is the purchase % cost, the cost % of refining, including % the 

Discount rate: 

appropriate Staatsolie employee proportion pension of plan depreciation, depletion and amortization 4.6% and overheads 4.5% based 4.2% on normal 

Staatsolie retiree medical plan 12.5% 4.5% 4.5% 


The Staatsolie net realizable jubilee benefits value of crude oil and refined products is 3.1% based on the estimated 3.2% selling price 3.1% in the 

Staatsolie periodic additional holiday allow ance 4.5% 4.5% 4.5% 

ordinary 

Executive 

course 

pension 

of 

plan 

business, less the estimated costs of completion 

4.5% 

and the estimated 

4.5% 


4.5% 

to 

make 

Supplementary 

the sale. 

Provision Board members 4.5% 4.5% 4.5% 


2017 2016 January 1, 2016 

Staatsolie funeral grant plan for retirees 4.5% 4.5% 4.5% 

Staatsolie pension gratuity 4.5% 4.5% 4.5% 

GOw 2 retiree medical plan 12.5% 11.5% 11.5% 

GOw 2 jubilee benefits 12.5% 11.5% 11.5% 

SPCS retiree medical plan 12.5% 4.5% 4.5% 

Pipeline SPCS funeral fill grant plan for retirees 4.5% 4.5% 4.5% 

SPCS pension gratuity 4.5% 4.5% 4.5% 

Crude SPCS oil, jubilee which benefits is necessary to bring a pipeline into working 4.5% order, is treated 4.5% as a part of the 4.5% related 

SPCS periodic additional holiday allow ance 4.5% 4.5% 4.5% 


necessary Future consumer to the price operation index increases: of a facility during more than one operating cycle, and its cost cannot be 

Staatsolie employee pension plan & Executive pension plan 3.0% 3.0% 3.0% 

recouped Staatsolie through jubilee benefits sale (or is significantly impaired). This applies 3.0% even if the 3.0% part of inventory 3.0% that is 

Staatsolie & SPCS retiree medical plan 11.0% 3.0% 3.0% 


Staatsolie & SPCS funeral grant plan for retirees 3.0% 3.0% 3.0% 

inventory. Staatsolie It & is SPCS valued pension at cost gratuity and is depreciated over the useful 3.0% life of the related 3.0% asset. 3.0% 

Staatsolie & SPCS periodic additional holiday allow ance 3.0% 3.0% 3.0% 

Supplementary Provision Board members 3.0% 3.0% 3.0% 

GOw 2 retiree medical plan 11.0% 10.0% 10.0% 


GOw 2 jubilee benefits 11.0% 10.0% 10.0% 


Future salary increases: 

If any Staatsolie indication employee exists, pension or when plan & Executive annual impairment pension plantesting for 3.0% an + asset age related is required, merit - for the all Group three years estimates 

Staatsolie & SPCS jubilee benefits 

3.0% + age related merit - for all three years 

the 


asset’s 

& 

recoverable 

SPCS pension 

amount. 

gratuity 

An asset’s recoverable amount 

3.0% + age 

is the 

related 

higher 

merit - 

of 

for 

an 

all three 

asset’s 

years 

or cash 

generating Staatsolie & units SPCS (CGU) periodic fair additional value holiday less costs allow ance of disposal and its value in use. It is determined for an 

3.0% + age related merit - for all three years 

individual Supplementary asset, Provision unless Board the asset members does not generate cash inflows 3.0% + that age related are largely merit - independent for all three years of those 

GOw 2 jubilee benefits 26% + merit 26% + merit 21% + merit 


Healthcare cost increase rate: 


Staatsolie & SPCS retiree medical plan 13.0% 5.0% 5.0% 

assessing GOw 2 retiree value medical in use, planthe estimated future cash flows are discounted 13.0% to their 10.0% present value using 10.0% a pretax 

Life discount expectation rate for retirees that reflects at the age current of 60: market assessments Years of the time value Years of money and Years the risks 

Staatsolie employee pension plan & Executive pension plan 


Male 18.4 18.4 17.8 

into Female account. If no such transactions can be identified, an appropriate 21.0 valuation 21.0 model is used. 20.7 

Post-employment healtcare & other long-term benefit plans 


Male 18.4 18.4 17.8 

in Female those expense categories consistent with the function of 21.0 the impaired asset, 21.0 except for a 20.7 property 



Page 63


126 



(continued) 

The Available-for-sale average duration (AFS) of the financial various investments employee benefit obligations at the end of the reporting periods is 

presented AFS financial below. investments include equity and debt securities. Equity investments classified as availablefor-sale 

are those neither classified as held-for-trading 2017 nor designated 2016 at fair value January through 1, 2016 profit or loss. 

Weighted average life of the plans: 


Staatsolie employee pension plan 19 20 21 


Staatsolie retiree medical plan 22 21 21 

cumulative Staatsolie funeral gain grant or loss plan for is retirees recognized in other 27operating income 27 or expense, or 27 the investment is 

determined Staatsolie pension to be gratuity impaired, at which time, the cumulative 9 loss is reclassified 9 to the consolidated 9 statement 

of Staatsolie profit or jubilee loss in benefits finance costs and removed from 7 the OCI. The Group 7 evaluates its AFS 7 financial assets 

Staatsolie periodic additional holiday allow ance 1 1 1 


Executive pension plan 15 16 17 

Supplementary Provision Board members 5 6 7 


GOw 2 retiree medical plan 19 20 20 


GOw 2 jubilee benefits 7 7 8 


loss, SPCS loans retiree and medical borrowings, plan payables, as appropriate. 34 All financial liabilities 35 are recognized 36 initially at fair 

SPCS funeral grant plan for retirees 

value and, in the case of loans and borrowings and 41 payables, net of 42 directly attributable 42transaction costs. 

SPCS pension gratuity 21 22 22 


SPCS jubilee benefits 10 11 11 

overdrafts. 

SPCS periodic additional holiday allow ance 3 2 1 


A quantitative sensitivity analysis for significant assumptions on the pension, post-employment healthcare 


and other long-term employee benefits as at December 31, 2017 and 2016 is shown below. The 


sensitivity analyses are presented in US$. 



Staatsolie employee pension plan 


The effect of a 1 percentage point change in the assumed discount rate, the assumed salary increases 


and the pension adjustment on the defined benefit obligation are: 


Assumptions Pension adjustment Discount rate Future salary increases 

Sensitivity 1% 

1% 

1% 

1% 

1% 

1% 

level m. Inventories Increase Decrease Increase Decrease Increase Decrease 

2017 15,989,569 (13,457,090) (20,194,171) 25,996,374 


9,577,072 (8,438,706) 

2016 20,203,549 (16,748,469) (23,807,170) 31,003,560 10,961,542 (9,669,060) 






Page 126 62




Maatschappij 

Maatschappij 

Suriname 

Suriname 

N.V. 

N.V. 



(continued) 

(continued) 


Executive pension plan 


The effect of a 1 percentage point change in the assumed discount rate and the assumed salary 


increases on the defined benefit obligation are: 


Assumptions Discount rate 

Future salary increases 

appropriate Sensitivityproportion 1% of depreciation, 1% depletion and 1% amortization 1% and overheads based on normal 

operating level capacity, Increase determined on Decrease a weighted average Increase basis. Decrease 

2017 (595,536) 728,625 234,617 (220,421) 

The net 2016 realizable value (554,220) of crude oil 681,790 and refined products 245,949 is based (229,740) on the estimated selling price in the 


make Staatsolie the sale. medical retiree plan 

The effect of a 1 percentage point change in the assumed discount rate and assumed medical cost 


inflation on the defined benefit obligation are: 

Assumptions Discount rate 

Medical cost inflation 

Pipeline fill 

1% 

1% 

1% 

1% 

Crude Sensitivity oil, which levelis necessary Increaseto bring Decrease a pipeline into working Increase order, is treated Decrease as a part of the related 

pipeline. 2017 This is on the (3,561,356) basis that it is 4,669,039 not held for sale 4,452,180 or consumed in (3,478,493) 

a production process, but is 

necessary 2016 to the operation (3,928,231) of a facility 5,186,001 during more than 5,101,720 one operating cycle, (3,944,694) and its cost cannot be 


GOw2 medical retiree plan 


The effect of a 1 percentage point change in the assumed discount rate and assumed medical cost 


inflation on the defined benefit obligation are: 

Assumptions Discount rate Medical cost inflation 


1% 1% 

1% 1% 

The 

Sensitivity 

Group assesses 

level 

at Increase each reporting Decrease date whether there Increase is an indication Decrease that an asset may be impaired. 

If any indication 2017 exists, or (78,229) when annual 100,826 impairment testing 95,850 for an asset (76,144) is required, the Group estimates 

2016 (68,814) 88,795 84,397 (66,986) 


generating SPCS medical units retiree (CGU) plan fair value less costs of disposal and its value in use. It is determined for an 

individual The effect asset, of a 1 unless percentage the asset point does change not generate in the assumed cash inflows discount that rate are largely and assumed independent medical of those cost 

from 

inflation 

other 

on 

assets 

the defined 

or groups 

benefit 

of 

obligation 

assets. Where 

are: 

the carrying amount of an asset or CGU exceeds its 


Assumptions Discount rate Medical cost inflation 

assessing value in use, the 1% estimated 1% future cash flows 1% are discounted 1% to their present value using a pretax 

discount rate that 

Sensitivity level 

Increase 

reflects current 

Decrease 

market assessments 

Increase 

of 

Decrease 

the time value of money and the risks 

2017 (63,971) 91,495 88,073 (63,179) 

specific 2016 to the asset. In determining (61,980) fair 90,249 value less costs 87,246 of disposal, (61,461) recent market transactions are taken 






Page 63


128 




(continued) 


(continued) 


Staatsolie funeral grant plan 

AFS The effect financial of a investments 1 percentage include point change equity and in the debt assumed securities. discount Equity rate investments and assumed classified funeral as grant availablefor-sale 

increase are on those the defined neither benefit classified obligation as held-for-trading are: nor designated at fair value through profit or loss. 

After 

Assumptions 

initial measurement, Discount AFS ratefinancial investments Funeral grant are increase subsequently measured at fair value with 

unrealized gains or 1% losses recognized 1% as OCI 1% until the investment 1% is derecognized, at which time, the 


Increase Decrease Increase Decrease 


2017 (195,922) 270,373 260,695 (193,198) 

determined 

2016 

to be impaired, 

(185,916) 

at which 

257,608 

time, the cumulative 

248,569 

loss is 

(183,473) 

reclassified to the consolidated statement 


to SPCS determine funeral whether grant plan the ability and intention to sell them in the near term is still appropriate. 

The effect of a 1 percentage point change in the assumed discount rate and assumed funeral grant 

(ii) increase Financial on the liabilities defined benefit obligation are: 

Assumptions Discount rate Funeral grant increase 

Recognition and measurement 1% 1% 

1% 

1% 


Financial liabilities Increase are classified, Decrease at initial recognition, Increaseas financial Decrease liabilities at fair value through profit or 

2017 (2,574) 3,956 3,863 (2,571) 

loss, loans 2016 and borrowings, (2,134) payables, 3,310as appropriate. 3,235 All financial (2,133) liabilities are recognized initially at fair 


Staatsolie pension gratuity plan 


The effect of a 1 percentage point change in the assumed discount rate and assumed salary increase on 

overdrafts. 

the defined benefit obligation are: 

Assumptions Discount rate Future salary increases 


1% 1% 

1% 1% 

This Sensitivity is the level category Increase most relevant Decrease to the Group. Increase After initial Decrease recognition, interest bearing loans and 

borrowings 2017 are subsequently (232,138) measured 267,703 at amortized 283,256 cost using (249,663) the EIR method. Gains and losses are 

2016 (226,174) 260,950 275,346 (242,482) 



SPCS pension gratuity plan 







1% 1% 

1% 1% 




2017 (3,197) 3,993 4,083 (3,314) 


2016 (2,778) 3,494 3,568 (2,876) 






Page 62 

Page 128





(continued) 


(continued) 


Staatsolie jubilee plan 





The Assumptions cost of crude oil and Discount refined rateproducts is Future the purchase salary increases cost, the cost of refining, including the 

appropriate proportion 1% of depreciation, 1% depletion and 1% amortization 1% 


and overheads based on normal 



2017 (448,557) 513,033 537,075 (478,662) 

The net 2016 realizable value (432,375) of crude oil 493,553 and refined products 517,627 is based (462,147) on the estimated selling price in the 


SPCS jubilee plan 



Materials the defined and benefit supplies obligation are valued are: using the weighted average cost method. 


1% 1% 

1% 1% 

Pipeline Sensitivity fill level 


Crude 2017 oil, which is necessary (8,902) 10,472 to bring a pipeline 10,931 into working (9,451) order, is treated as a part of the related 

2016 (8,118) 9,572 9,954 (8,582) 


necessary GOw2 jubilee to plan the operation of a facility during more than one operating cycle, and its cost cannot be 

recouped The effect through of a 1 percentage sale (or is point significantly change in impaired). the assumed This discount applies rate even and if assumed the part of salary inventory increase that on is 

deemed the defined to benefit an item obligation of property, are: plant and equipment cannot be separated physically from the rest of 

inventory. Assumptions It is valued Discount at cost and rate is depreciated Future over salary the useful increases life of the related asset. 

1% 1% 

1% 1% 



2017 n. Impairment (5,554) of non-financial 6,247 assets 6,364 (5,762) 

The Group 2016 assesses (5,359) at each reporting 6,008date whether 6,018 there is an indication (5,470) that an asset may be impaired. 


Staatsolie periodic additional holiday allowance plan 







from other assets or 1% groups of 1% assets. Where 1% the carrying 1% amount of an asset or CGU exceeds its 




2017 (34,511) 35,469 49,027 (48,464) 



2016 (33,995) 34,988 47,753 (47,148) 

specific SPCS periodic to the asset. additional In determining holiday allowance fair value plan less costs of disposal, recent market transactions are taken 

into The account. effect of a If 1 no percentage such transactions point change can be in identified, the assumed an appropriate discount rate valuation and assumed model is salary used. increase on 





1% 1% 

1% 1% 


previously revalued Increase where the Decrease revaluation was Increase taken to Decrease OCI. In this case, the impairment is also 

2017 (847) 882 1,019 (993) 


2016 (493) 515 652 (636) 

Page 63 

Page 129


130 


Notes to to the the Consolidated financial statements for the years ended December 31, 2017 and 2016 

(continued) 

Available-for-sale Supplementary provision (AFS) financial board members investments plan 

AFS The effect financial of a investments 1 percentage include point change equity and in the debt assumed securities. discount Equity rate investments and assumed classified salary increase availablefor-sale 

the defined are benefit those neither obligation classified are: as held-for-trading nor designated at fair value through profit or loss. 

on 

After Assumptions initial measurement, Discount AFS ratefinancial investments Future salary are increases subsequently measured at fair value with 

1% 1% 

1% 1% 

unrealized Sensitivity level gains or losses recognized as OCI until the investment is derecognized, at which time, the 


cumulative 2017 gain or (34,444) loss is recognized 37,295 in other 41,132 operating (38,583) income or expense, or the investment is 

determined 2016 to be impaired, (36,094) at which 39,310 time, the cumulative 42,734 loss (39,828) is reclassified to the consolidated statement 


The sensitivity analyses above have been determined based on a method that extrapolates the impact on 


the defined benefit obligation as a result of reasonable changes in key assumptions occurring at the end 

of the reporting period. The sensitivity analyses are based on a change in a significant assumption, 


keeping all other assumptions constant. The sensitivity analyses may not be representative of an actual 

Recognition change in the and defined measurement benefit obligation as it is unlikely that changes in assumptions would occur in 

Financial isolation from liabilities one another. are classified, at initial recognition, as financial liabilities at fair value through profit or 


The following payments are expected contributions to the defined benefit plan (employee pension plan) in 


future years: 


overdrafts. x US$ 1,000 2017 2016 January 1, 2016 

Within the next 12 months (next annual reporting period) 5,397 5,087 5,238 

Betw een 2 and 5 years 25,081 23,641 22,284 

Betw een 5 and 10 years 38,506 37,180 35,698 


Beyond 10 years 85,417 93,580 101,505 

This Total is expected the category payments most relevant to the Group. After 154,401 initial recognition, 159,488 interest 164,725 bearing loans and 


The following payments are expected contributions to the defined benefit plan (executive pension plan) in 


future years: 



premium Within the on next acquisition 12 months (next and annual fees or reporting costs period) that are an integral 134 part of the 1,224 EIR. The EIR 131 amortization is 

Betw een 2 and 5 years 579 563 1,640 

included 

Betw een 

in 

5 and 

finance 

10 years 

costs in the consolidated statement of profit 

828or loss. This 

803category generally 

780 

applies to 

interest-bearing Beyond 10 years loans and borrowings. 

959 1,135 1,305 

Total expected payments 2,500 3,725 3,856 


4.9 Capital commitments and other contingencies 


Raw Operating materials: lease commitments 

• The Purchase Group has cost entered is valued into operating on weighted leases average on certain method motor vehicles and vessels. 

These leases have an average life of three years with renewal terms. 




Page 130 62




(continued) 

Future Inventories minimum are stated lease at payments the lower under of cost non-cancellation and net realizable operating value. leases Net realizable as at December value is 31, the 2017 estimated and 

2016 selling are, price as follows: in the ordinary course of business, less estimated costs of completion and the estimated 


The x US$ cost 1,000 of crude oil and refined products is the purchase 2017 cost, the 2016 cost of refining, including the 

Within one year 6,295 6,764 


After one year but not more than five years 5,457 4,118 

operating capacity, determined on a weighted average basis. 11,752 10,882 


Other contractual obligations / commitments 




Within one year 6,916 3,563 

After one year but not more than five years 844 3,045 


7,760 6,608 

Sales 

Pipeline 

contractual 

fill 

obligations 

The 

Crude 

Group 

oil, which 

has sales 

is necessary 

obligations 

to 

of 

bring 

US$ 

a 

13,986 

pipeline 

as at 

into 

December 

working order, 

31, 2017 

is treated as a part of the related 



necessary Within one to year the operation of a facility during more than 9,816 one operating 29,088 cycle, and its cost cannot be 

After one year but not more than five years 4,170 4,131 


13,986 33,219 



Legal claim contingency 

The Group also has a legal claim relating to a lease contract where there is not enough probability to 


reasonably recommend a provision. The case is not pending in the courts of Suriname nor have been 


entered into arbitration. The case has been reviewed by the in-house legal department. Based hereon it is 


advised to the Group that the case is only possible, but not probable that the action will succeed. 


Accordingly, no provision for any liability has been made in these consolidated financial statement for this 


case. 


The Group currently has legal claims amounting to US$ 1,384 (exclusive of interest and judicially 


imposed penalties) relating to labor related matters pending in the courts of Suriname of which a 


provision 

of 



US$ 190 as at December 31, 2017 is recorded in these consolidated financial statements. Based on legal 

advice obtained, management is of the view that the Group is in a strong and defendable position and 


that no further provision is required. 






Page 131 63


132 



(continued) 


Section 5. Capital and debt structure 

5.1 Issued capital and reserves 



The authorized share capital of Staatsolie as the parent of the Group amounts to US$12,104 as at 


December 31, 2017 and is divided into 5 million shares of which each amount to US$12.23 per thousand 


shares. During the year, the authorized share capital remained unchanged. 


determined Issued capital to be is as impaired, follows: at which time, the cumulative loss is reclassified to the consolidated statement 

of 

xUS$ 

profit 

1,000 

or loss in finance costs and removed 


from the OCI. 

2016 

The Group evaluates 

As at January 

its AFS 

1, 2016 

financial assets 

to Ordinary determine share whether capital the ability and intention to sell them in the near term is still appropriate. 

5,000,000 ordinary shares 12,104 12,104 12,104 

(ii) Reserve Financial for liabilities environment risk 

Recognition 

The environmental 


risk reserve is a reserve taken against environmental risk claims based on damages 

Financial 

which may 

liabilities 

result from 

are classified, 

an environmental 


disaster in the 

as financial 

execution 

liabilities 

of ocean 

at 

freight 

fair value 

cargo 

through 

deliveries. 

profit or 

In 

loss, 

addition, 

loans 

damages 

and borrowings, 

to the environment 

payables, as 

due 

appropriate. 

to onshore 

All 

well 

financial 

operations 

liabilities 

are 

are 

also 

recognized 

appropriated 

initially 

for in 

at 

this 

fair 

value 

reserve. 

and, 

Based 

in the 

on 

case 

historical 

of loans 

information 


and experience, 

and payables, 

the 

net 

Group 

of directly 

believes 

attributable 

that an annual 

transaction 

addition 

costs. 

of 

The 

US$ 

Group’s 

500,000 

financial 

is sufficient, 

liabilities 

which 

include 

is decided 

trade 

by 

and 

the board 

other 

of 

payables, 

directors. 

loans and borrowings including bank 

overdrafts. 

Reserve for committee of sports facilities 

Loans As decided and borrowings by the shareholder, a portion of the profit attributable to the shareholder is retained in a Sport 

This Fund is to the support category corporate most social relevant responsibility to the Group. in the After area initial of sports. recognition, On behalf interest of the bearing sole shareholder, loans and 

borrowings the GoS, a are committee subsequently “Sport measured Development at amortized Fund” cost was using established the EIR on method. April Gains 2013 and to conform losses are to 

recognized governance in principles. the consolidated The committee, statement of composed profit or loss of representatives when the liabilities from are the derecognized GoS and Staatsolie, as well as 

through provides the guidelines EIR amortization for submission process. of Amortized proposals, cost approves is calculated and monitors by taking the into allocation account of any funds. discount Every or 

premium year, the shareholder on acquisition decides and fees how or much costs to that withdraw are an from integral this reserve. part of the EIR. The EIR amortization is 


interest-bearing Other allocation loans / (withdrawal) and borrowings. 

Included in the other reserves as at December 31, 2017 is an amount of US$ 13,520, net of tax, which is 

a credit m. to the Inventories Government of Suriname (“GoS”) for amounts previously invoiced by, and paid to, SPCS 

Petroleum for energy products delivered, are but valued that, ultimately, the lower was of cost less and than net the realizable minimum value. energy output, as specified in the 

Power Purchase Agreement (PPA) between GoS and SPCS. 






Page 132 62




(continued) 


5.2 Capital management 


For the purpose of the Staatsolie’s capital management, capital includes issued capital and all other 


equity reserves attributable to the equity holders. The main objective of the capital management of 


Staatsolie is to ensure a financial structure that optimizes the cost of capital, maximizes the performance 


of its shareholder and allows access to financial markets at a competitive cost to cover its financing needs 


that supports sustainable growth and ensuring healthy capital ratios to be in compliance with the financial 

The covenants net realizable to support value the of business. crude oil and refined products is based on the estimated selling price in the 

ordinary In order to course achieve of business, this overall less objective, the estimated the Group’s costs of capital completion management, and the amongst estimated other costs things, necessary aims to 

make ensure the that sale. it meets the financial covenants attached to its interest-bearing loans and borrowings that 

Materials form part and of its supplies capital are structure valued using requirements. the weighted Breaches average in cost the method. financial covenants would permit the 

lenders to immediately call interest-bearing loans and borrowings. There have been no breaches in the 

Pipeline financial fill covenants of any interest-bearing loans and borrowings in the current or prior period. 

Crude The two oil, main which financial is necessary covenants to monitored bring a pipeline by the into Group working are: order, is treated as a part of the related 

pipeline. • The interest This is coverage on the basis ratio that which it is is not calculated held for by sale dividing or consumed the consolidated in a production EBITDA by process, the financial but is 

necessary expenses to the and operation income. For of 2017 a facility this ratio during was more 4.60 than (2016: one 2.84); operating the minimum cycle, and permitted its cost is 3.50. cannot be 

recouped • Consolidated through leverage sale (or is ratio significantly which is impaired). calculated This by dividing applies the even consolidated if the part of Total inventory Debt by that the is 

deemed 

consolidated 

to be an 

EBITDA. 

item of property, 

For 2017 

plant 

this ratio 

and 

was 

equipment 

1.58 (2016: 

cannot 

3.28); 

be separated 

the maximum 

physically 

permitted 

from 

is 

the 

2.50. 

rest of 


In 2016 Staatsolie requested lenders to waive any default or event of default arising from such failure to 

deliver the audited consolidated financial statements and the compliance certificate with the covenants. A 


waiver was executed to the credit agreement to reflect the requests. 



5.3 Financial instruments 


Interest-bearing loans and borrowings 

generating Bond units (CGU) fair value less costs of disposal and its value in use. It is determined for an 

individual asset, unless the asset does not generate cash inflows that are largely As at independent January 1, of those 

x US$ 1,000 Maturity 2017 2016 2016 

from Local other Bond assets or groups of assets. May-20 Where the carrying 98,668 amount 98,475 of an asset or CGU 98,281exceeds its 


Term loans 

assessing value in use, the estimated future cash flows are discounted to their present As at January value 1, using a pretax 

x US$ discount 1,000 rate that reflects current Maturity market assessments 2017of the time 2016 value of money 2016 and the risks 

Loan facility DSB Jan-18 9,657 8,468 - 

specific Corporate to term the loan asset. In determining fair Nov-19 value less costs 259,844 of disposal, 296,353 recent market transactions 570,686 are taken 

Loan SPCS Nov-21 78,288 97,798 117,306 


Loan Government of Suriname Oct-26 258,412 258,058 - 

Impairment Balance as at losses December of continuing 31 operations are recognized 606,201 in the consolidated 660,677 statement 687,992 of profit or loss 

in Current those portion expense of the categories loans consistent with the function 105,361 of the impaired 69,031 asset, except 64,801 for a property 


Non current portion of the loans 500,840 591,646 623,191 


Page 133 63


134 



(continued) 

Local Available-for-sale Bond (AFS) financial investments 

The AFS five-year financial investments 7% unsecured include coupon equity bond and matured debt securities. on May 14, Equity 2015. investments On this day classified Staatsolie as availablefor-sale 

five-year are those 7.75% neither unsecured classified coupon as held-for-trading bond and raised nor designated US$ 99,142. at fair The value applicable through annual profit interest or loss. 

issued a 

second 

rate After is initial 7.75%. measurement, A coupon was AFS sold financial for US$ investments 100 each. The are maturity subsequently date of measured this second at bond fair is value May with 14, 

2020. 

unrealized 

Interest 

gains 

will 

or 

be 

losses 

paid semi-annually 

recognized as 

on 

OCI 

May 

until 

14 and 

the 

November 

investment 

14 

is 

each 

derecognized, 

year. 


As cumulative December gain 31, or loss 2017, is unamortized recognized debt in other arrangement operating fees income amounted or expense, to US$ 474. or the The investment amortization is 

of determined debt arrangement to be impaired, fees for at 2017 which amounted time, the cumulative US$ 193 (2016: loss is US$ reclassified 194) and to is the presented consolidated under statement finance 

cost of profit in the or consolidated loss in finance statement costs and of removed profit or loss. from the OCI. The Group evaluates its AFS financial assets 


Term loans 

Loan (ii) Financial facility liabilities 

This 

Recognition 

regards 

and 

a bullet 

measurement 

loan of US$ 9,657 obtained in June 2016 from “De Surinaamsche Bank N.V”. The 

initial 

Financial 

maturity 

liabilities 

date 

are 

of the 

classified, 

loan was 

at 

December, 

initial recognition, 

30 2017. 

as 

This 

financial 

was 

liabilities 

extended 

at 

with 

fair 

one 

value 

month 

through 

to January 

profit or 

30, 

loss, 

2018. 

loans 

The 

and 

applicable 

borrowings, 

annual 

payables, 

interest 

as 

rate 

appropriate. 

is 7.0%. 

All 

The 

financial 

interest 

liabilities 

is being paid 

are recognized 

on a quarterly 

initially 

basis. 

at fair 

A 

parcel 

value and, 

of unoccupied 

in the case 

land 

of loans 

was given 


as a collateral 

and 

to 

payables, 

the bank. 

net of directly attributable transaction costs. 


Corporate term loan 

overdrafts. 

On September 28, 2015 Staatsolie refinanced the corporate five year loan for an initial amount of 

US$ 600,000. The total loan amount consisted of US$ 575,000 term loan and US$ 25,000 revolving loan. 


Repayment of the term loan was planned for 13 quarterly installments, to commence in the fourth quarter 


of 2016. On November 16, 2016 Staatsolie refinanced and prepaid the corporate loan for the total amount 


of US$ 294,218. This prepayment included the first quarterly installment of 2016. The outstanding 


corporate loan as of December 31, 2016 amounted to US$ 305,783 which consists of US$ 280,783 term 


loan and US$ 25,000 revolving loan. Repayment of the term loan is planned for 13 quarterly installments. 


A new amortization schedule is agreed and the last repayment is due in November 2019 with a bullet 


payment. The outstanding amount as of December 31, 2017 amounted to US$ 265,782 which consist of 


US$ 240,783 term loan and US$ 25,000 revolving loan. The applicable annual interest rate is 4.875% 

plus 3 months LIBOR. 


With Petroleum regard products to the are term valued loan, at the lower financial of cost institutions and net realizable required value. security for Staatsolie’s payment 

obligations. The security mainly consists of the offshore receivables. Staatsolie also has to comply with 


several affirmative and negative covenants. As at December 31, 2017 Staatsolie is in compliance with the 


covenants. 


As at December 31, 2017, unamortized debt arrangement fees amounted to US$ 6,627 (2016: 


US$ 10,024). The amortization of debt arrangement fees for 2017 amounted US$ 3,397 (2016: US$ 


3,152) and is presented under finance cost in the consolidated statement of profit or loss. 

Page 134 62




(continued) 

Loan Inventories SPCS are stated at the lower of cost and net realizable value. Net realizable value is the estimated 

In selling September price in 2013, the ordinary SPCS entered course of into business, a seven less year estimated loan with costs Credit of Suisse completion for the and expansion the estimated of the 

power costs to plant. sell. On November 17, 2014, SPCS restated and amended its credit agreement of US$ 74,000 to 

The US$ cost 120,000. of crude The outstanding oil refined loan balance products as is at the December purchase 31, cost, 2017 the amounted cost of to refining, US$ 80,064. including With the a 

grace appropriate period proportion of 4 quarters, of a depreciation, total of US$ 20 depletion million was and repaid amortization in 2017. and Repayment overheads of the based loan on is planned normal 

operating for 24 quarterly capacity, installments. determined The on a maturity weighted date average of the basis. loan is November 2021. The applicable annual 

interest rate is 5.50% plus 3 months LIBOR. 


ordinary Staatsolie course acts as of business, guarantor less for this the loan estimated and will costs make of completion the repayments and the in estimated US dollars. costs As collateral necessary the to 

make bank requested the sale. 100% of SPCS’s fixed assets, all rights and benefits gained in the Power Purchase 

Agreement (PPA) as well as the establishment of various offshore collateral accounts. 


As at December 31, 2017, unamortized debt arrangement fees amounted to US$ 1,776 (2016: US$ 

Pipeline 2,234). The fill amortization of debt arrangement fees for 2017 amounted to US$ 458 (2016: US$ 460) and 

is Crude expensed oil, which in the is consolidated necessary to statement bring a pipeline of profit or into loss. working order, is treated as a part of the related 


Loan necessary from the to the Government operation of of Suriname a facility during more than one operating cycle, and its cost cannot be 

In recouped November through 2016 sale Staatsolie (or is refinanced significantly the impaired). secured long This term applies bank even loan if with the part a secured of inventory loan from that the is 

GoS. deemed The to GoS be an garnered item of property, these proceeds plant and from equipment an international cannot bond be separated issued on physically October from 26, 2016. the rest One of 

coupon inventory. was It is sold valued for at US$ cost 100,000 and is depreciated each. The over loan the amounts useful life to US$ of the 261,534, related asset. disclosed in section 7, 

related party disclosures, bears 9.25% semi-annual interest payable in April and October and requires a 

bullet repayment n. Impairment in November of non-financial 2026. assets 

As The at Group December assesses 31, 2017, at each unamortized reporting date debt whether arrangement there fees is an amounted indication to that US$3,122 an asset (2016: may be US$3,475). impaired. 

The If any amortization indication exists, of debt or when arrangement annual impairment fees for 2017 testing amounted for an asset to US$353 is required, (2016: the US$ Group 55) estimates and is 

expensed the asset’s in recoverable the consolidated amount. statement An asset’s of profit recoverable or loss. amount is the higher of an asset’s or cash 


Loan individual receivables asset, unless the asset does not generate cash inflows that are largely independent of those 

In from accordance other assets with or the groups Power of Purchase assets. Agreement Where the dated carrying March amount 1, 2013 of (with an asset latest or amendment CGU exceeds in April its 

2016) recoverable by and amount, between the SPCS asset and is considered the GoS, SPCS impaired constructed and is written a transmission down to line its recoverable to the grid of amount. EBS. The In 

aggregated assessing value cost in of use, US$27,293 the estimated was divested future cash in favor flows of GoS are discounted in 2016, and to accordingly their present derecognized value using a in pretax 

discount of SPCS. rate In that 2017 reflects and 2016, current US$ market 4,249 of assessments the principal of balance the time was value repaid of by money GoS. The and remaining the risks 

the 

books 

balance specific to is the to asset. be considered In determining as long fair term value loan less with costs interest of disposal, rate recent of 5.76% market p.a., transactions payable in are quarterly taken 

installment into account. with If no maturity such transactions date of November can be 2021. identified, As at an December appropriate 31, valuation 2017, the model short is term used. portion of this 

loan Impairment amounts losses to US$8,368 of continuing (2016: operations US$9,173) are and recognized the long in term the consolidated portion amounts statement to US$11,007 of profit or (2016: loss 

US$14,677). in those expense The loan categories receivable consistent disclosed with in the section function 7, related of the party impaired disclosures. asset, except for a property 



Page 135 63


136 



(continued) 

Available-for-sale In addition, the Group (AFS) previously financial investments 

issued an 8% loan of US$ 1,404 to N.V. Energie Bedrijven Suriname 

AFS (N.V. financial EBS) for investments the substation include at Tout equity Lui Faut. and debt The securities. outstanding Equity loan receivable investments balance classified at as December availablefor-sale 

31, 2016 are was those US$ neither 805 which classified was repaid as held-for-trading the fourth nor quarter designated of 2017, at therefore fair value there through is no profit outstanding or loss. 

After balance initial as of measurement, December 31, AFS 2017. financial investments are subsequently measured at fair value with 


cumulative Fair Value gain or loss is recognized in other operating income or expense, or the investment is 

determined The initial recognition to be impaired, of the at loans which and time, bonds the cumulative is fair loss value is while reclassified the subsequent to the consolidated measurement statement is of amortized profit cost, loss assuming finance costs the contractual and removed interest from rate the equals OCI. The the Group effective evaluates interest its rate. AFS The financial local financial assets 

to market determine consists whether of traditional the ability bank and loans intention for business, to sell them and in is the not near capable term to is provide still appropriate. for the capital needed 

for Staatsolie’s growth strategy. Staatsolie’s finance structure comprises financing by the GoS and 

(ii) bespoke Financial credit liabilities agreements by a consortium of international banks, which is considered the principal or 

most advantageous market. 


Financial Staatsolie liabilities uses valuation are classified, techniques at initial that recognition, are appropriate as financial the circumstances liabilities at fair and value for through which sufficient profit or 

loss, data are loans available and borrowings, to measure payables, fair value, as maximizing appropriate. the All uses financial of relevant liabilities inputs are and recognized minimizing initially the use at fair of 

value unobservable and, in the inputs. case of loans and borrowings and payables, net of directly attributable transaction costs. 

The All assets Group’s and financial liabilities, liabilities for which include fair trade value and is other measured payables, or disclosed loans and in borrowings the consolidated including financial bank 

overdrafts. statements, are categorized within the fair value hierarchy, described as follows, based on the lowest 

level input that is significant to the fair value measurement as a whole: 

Loans 

• Level 

and 

1 

borrowings 

- Quoted (unadjusted) market prices in active markets for identical assets or liabilities; 


• Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value 

borrowings 

measurement 

are subsequently 

is directly or 

measured 

indirectly observable; 

at amortized cost using the EIR method. Gains and losses are 


• Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value 


measurement is unobservable. 


For assets and liabilities that are recognized in the consolidated financial statements on a recurring basis, 


Staatsolie determines whether transfers have occurred between levels in the hierarchy by reassessing 


categorization (based on the lowest-level input that is significant to the fair value measurement as a 

whole) at the end of each reporting period. 








Page Page 136 62




(continued) 

Financial Inventories risk are management stated at the lower objectives of cost and and policies net realizable value. Net realizable value is the estimated 


Market risk 


Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate 

because The cost of of changes crude oil in and market refined prices. products Market is risk the comprises purchase three cost, types the cost of risk: of refining, commodity including price risk, the 

interest appropriate rate risk proportion and foreign of depreciation, currency risk. depletion Financial and instruments amortization affected and by overheads market risk based include on loans normal and 

borrowings, operating capacity, deposits, determined trade receivables, on a weighted trade payables average basis. and accrued liabilities. 

Market The net risks realizable due to value interest of rate crude (LIBOR) oil and risk refined have products been accepted is based and on is the evaluated estimated and selling managed price as in part the 

of ordinary the portfolio course risk of business, management less the policies. estimated In addition costs of Staatsolie completion monitors and the a estimated desired ratio costs for necessary its available to 

cash make in the US$ sale. to fulfill its foreign currency business obligations. Furthermore Staatsolie accepts the risks of 

price Materials fluctuations and supplies of oil are products, valued while using takes the weighted into account average a conservative cost method. low price for its work program 

and budget. 

Pipeline fill 

Interest Crude oil, rate which risk is necessary to bring a pipeline into working order, is treated as a part of the related 

Interest pipeline. rate This risk on is the the risk basis that that the it fair is value not held or future for sale cash or flows consumed of a financial a production instrument process, will fluctuate but is 

because necessary of to changes the operation in market of a interest facility rates. during The more Group’s than one exposure operating to the cycle, risk and of changes its cost cannot in market be 

interest recouped rates through relates sale primarily (or is to significantly the Group’s impaired). long-term This debt obligations applies even with if floating the part interest of inventory rates. that is 


Interest 

inventory. 

rate 

It is 

sensitivity 

valued at cost and is depreciated over the useful life of the related asset. 

The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that 

portion of 

n. 

loans 

Impairment 


of non-financial 

affected. With 

assets 

all other variables held constant, the Group’s profit before 

tax 

The 

is 

Group 

affected 

assesses 

through 

at 

the 

each 

impact 

reporting 

on floating 

date whether 

rate borrowings, 

there is an 

as 

indication 

follows: 

that an asset may be impaired. 

If any indication Increase exists, / decrease or when annual Effect impairment on profit before testing tax for an Effect asset on is profit required, before the tax Group estimates 

the x US$ asset’s 1 in basis points Corporate term loan 

Loan SPCS 

recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash 

generating 2017 units (CGU) fair value less costs of disposal and its value in use. It is determined for an 

individual US dollar asset, unless +60the asset does not generate cash 1,595 inflows that are largely independent 470 of those 

-60 (1,595) (470) 


recoverable 2016 amount, the asset is considered impaired and is written down to its recoverable amount. In 

US dollar +60 1,778 587 



-60 (1,778) (587) 







Page 137 63


138 



(continued) 

Available-for-sale Foreign Currency (AFS) risk financial investments 

AFS Foreign financial currency investments risk is the include risk that equity the and fair debt value securities. or future Equity cash investments flows of an exposure classified as will availablefor-sale 

because are of changes those neither in foreign classified exchange as held-for-trading rates. The Group’s nor designated exposure at to fair the value risk of through changes profit in or foreign loss. 

fluctuate 

exchange After initial rates measurement, relates primarily AFS to financial the Group’s investments operating are activities subsequently of subsidiary measured GOw2 at (as fair revenues value with and 

expenses unrealized are gains denominated or losses in recognized a foreign currency). as OCI until the investment is derecognized, at which time, the 

The cumulative Group gain manages or loss trade is recognized transactions in by other offsetting operating local income payments or expense, and local or receivables the investment SRD is 

creating determined a natural to be impaired, hedge for at the which SRD time, transactions. the cumulative loss is reclassified to the consolidated statement 


to Commodity determine price whether risk the ability and intention to sell them in the near term is still appropriate. 

The Group is exposed to the risk of fluctuations in prevailing market commodity prices on the mix of oil 

(ii) products Financial it produces. liabilities The Group’s policy is to manage these risks through the use of contract-based 

prices with customers. As mentioned in the market risk section above, Staatsolie takes a conservative low 


price approach for its work program and budget. 


The loss, analysis loans and is based borrowings, on the payables, assumption appropriate. that changes All in financial the crude liabilities oil price are result recognized in a change initially of 10% at fair in 

the value sale and, prices in the of case the oil of products, loans and with borrowings all other and variables payables, held net constant. of directly Reasonably attributable possible transaction movements costs. 

in The commodity Group’s financial prices were liabilities determined include based trade and on other a review payables, of the loans last two and years’ borrowings historical including prices bank and 

economic overdrafts. forecasters’ expectations. 

x US$ 1,000 


Effect on profit before tax 

Effect on profit before tax 

Increase / decrease in crude oil 

for the year ended 31 

This is the category most relevant for to the the year Group. ended After 31 December initial recognition, interest bearing loans and 

prices 

December 2016 

2017 (increase/decrease) 

borrowings are subsequently measured at amortized cost using the EIR (increase/decrease) 

method. Gains and losses are 


+10% 38,025 28,493 

through the EIR -10% amortization process. Amortized cost is calculated (38,025) by taking into account (28,493) any discount or 


included Liquidity in risk finance costs in the consolidated statement of profit or loss. This category generally applies to 

interest-bearing Liquidity risk is loans the risk and that borrowings. the Group will encounter difficulty in meeting obligations associated with 

financial liabilities that are settled by delivering cash or another financial asset. 


The Group manages its liquidity risk based on reporting covenants, encompassing sensitivity analysis for 


production and conservative price assumptions, and restrained capital expenditures. Furthermore, 

optional Raw materials: debt is available within the credit agreement in accordance with the debt basket. Cash in excess 

is • being Purchase managed cost by is valued the corporate on weighted treasury average department method through “intercompany cash pooling” agreements 

with 

Finished 

its subsidiaries. 

goods and work in progress: 



Page 138 62




(continued) 

Inventories The table below are stated summarizes at the lower the maturity of cost profile and net of the realizable Group’s value. financial Net liabilities realizable as value at December is the estimated 31: 


x US$ 1000 1 year 2 to 4 years > 4 years Total 


The 2017cost of crude oil and refined products is the purchase cost, the cost of refining, including the 

appropriate Bond and term proportion loans of 56,820 depreciation, 534,056 depletion and 379,371 amortization 970,247 and overheads based on normal 

Trade payable 90,570 - - 90,570 


Accrued liabilities 95,709 - - 95,709 

The Other net liabilities realizable value of 1,816 crude oil and refined - products - is based on 1,816 the estimated selling price in the 


make 2016 the sale. 

Bond and term loans 48,474 523,375 501,007 1,072,856 

Materials Trade payable and supplies are 96,618 valued using the weighted - average - cost method. 96,618 

Accrued liabilities 87,839 - - 87,839 

Pipeline Other liabilities fill 

5,441 - - 5,441 



Credit necessary risk to the operation of a facility during more than one operating cycle, and its cost cannot be 

Credit recouped risk through is the risk sale that (or a counter is significantly party will impaired). not meet This its obligations applies even under if a the financial part of instrument inventory leading that is 

to deemed a financial to be loss. an item of property, plant and equipment cannot be separated physically from the rest of 

The 

inventory. 

Group 

It 

trades 

is valued 

with 

at 

recognised, 

cost and is depreciated 

creditworthy 

over 

third 

the 

parties. 

useful 

It 

life 

is 

of 

the 

the 

Group’s 

related 

policy 

asset. 

that all customers 

who wish to trade on credit terms are subject to credit verification procedures, which include an 

assessment 

n. Impairment 

of credit rating, 

of non-financial 

short-term liquidity 

assets 

and financial position. In addition, receivable balances are 

monitored 

The Group 

on 

assesses 

an on-going 

at each 

basis 

reporting 

and GoS 

date 

receivables 

whether there 

are settled 

is an indication 

with GoS 

that 

payables. 

an asset 

Note 

may 

6.2 

be 

shows 

impaired. 

an 

analysis 

If any indication 

of the trade 

exists, 

receivable 

or when 

ageing. 

annual impairment testing for an asset is required, the Group estimates 


With respect to credit risk arising from the other financial assets of the Group, which comprise cash, 


short-term investments and short term deposits, the Group’s exposure to credit risk arises from default of 


the counterparty, with a maximum exposure equal to the carrying amount of these instruments. 


The recoverable maximum amount, exposure the asset to credit is considered risk at the impaired reporting and date is is written the carrying down to value its recoverable of each class amount. of the In 

financial assessing assets value disclosed in use, the in estimated section 6.2 future as shown cash below: flows are discounted to their present value using a pretax 

discount rate that reflects current market assessments of the time value of As money at January and the 1, risks 

specific 

x US$ 1,000 

to the asset. In determining fair value less costs 


of disposal, recent 

2016 

market transactions 

2016 

are taken 

into 

Trade 

account. 

receivables 

If no such transactions can be identified, 

107,248 

an appropriate valuation 

101,878 

model is used. 

118,319 

Impairment 

Prepayments 

losses 

and other 

of continuing 

current assets 

operations are recognized 

27,175 


44,472 

statement of 

43,304 


134,423 146,350 161,623 




Page 139 63


140 



(continued) 

Available-for-sale Fair values (AFS) financial investments 

AFS Set out financial below investments is a comparison include equity of the and carrying debt securities. amounts and Equity fair investments values of classified the Group’s as availablefor-sale 

instruments, are those other neither than those classified with carrying as held-for-trading amounts that nor are designated reasonable at approximations fair value through of fair profit values: or loss. 

financial 


x US$ 1,000 

Carrying amount 

As at 

Fair value 


cumulative gain or loss is recognized in other operating January income 1, or expense, or the January investment 1, is 




The fair values of the financial liabilities are included at the amount of which the instrument could be 


exchanged at the reported date between willing parties, other than in a forced or liquidation sale. The fair 

Recognition values of the and financial measurement liabilities are determined based on price quotations at the respective reporting 

dates. Financial The liabilities financial are assets classified, of the at Group initial approximate recognition, fair as value financial and liabilities are therefore at fair excluded value through from the profit table or 

above. loss, loans and borrowings, payables, as appropriate. All financial liabilities are recognized initially at fair 

• 

value 

Local 

and, 

Bond: 

in the case 

The 

of 

fair 

loans 

value 

and 

as 

borrowings 

of each reporting 

and payables, 

date was 

net of 

obtained 

directly attributable 

from the officially 

transaction 

published 

costs. 

The 

numbers 

Group’s 

from 

financial 

the Suriname 

liabilities include 

stock exchange; 

trade and 

the 

other 

official 

payables, 

exchange 

loans 

in the 

and 

country. 

borrowings 

There 

including 

is a meeting 

bank 

overdrafts. 

every two weeks where the market price is determined. 

• Loan Government of Suriname: The loan was obtained from the proceeds of a government issued 


bond in October 2016.The fair value as at December 31, 2016 and 2017 was obtained from the 


Luxembourg Stock Exchange; the coupon price is implicitly tied to this loan. 



Financial Assets 


AFS financial assets – quoted equity shares 


The Group has short-term investments in locally listed equity securities of local companies. The fair value 


of the quoted equity shares is determined by reference to published price quotations in an active market. 


x US$ 1,000 2017 2016 As at January 1, 2016 

AFS financial assets at fair value through OCI: 


Quoted equity shares 3,838 3,797 6,910 

Petroleum Total products are valued at the lower of cost and 3,838 net realizable 3,797 value. 

6,910 






As at 

2017 2016 2016 2017 2016 2016 

Financial Liabilities 

Local Bond 98,668 98,475 98,281 101,125 99,142 100,133 

Loan Government of Suriname 258,412 258,058 - 279,679 260,880 - 

Total 357,080 356,533 98,281 380,804 360,022 100,133 

Page 140 62


Staatsolie Maatschappij Suriname N.V. N.V. 

Notes to the Consolidated financial statements for for the the years years ended ended December December 31, 2017 31, 2017 and 2016 and 2016 

(continued) 

Inventories Section 6. are Working stated at capital the lower of cost and net realizable value. Net realizable value is the estimated 


costs 

This section 

to sell. 

provides additional information that the directors consider is most relevant in understanding 

the composition and management of the Group’s working capital: 


• Cash and short-term deposits (Note 6.1) 


• Trade and other receivables (Note 6.2) 


• Inventories (Note 6.3) 

The • net Trade realizable payables, value accruals of crude and oil other and liabilities refined products (Note 6.4) is based on the estimated selling price in the 

ordinary 

6.1 Cash 

course 

and 

of business, 

short–term 

less the 

deposits 

estimated costs of completion and the estimated costs necessary to 


As at January 1, 

Materials x US$ 1,000 and supplies are valued using the weighted 2017 average cost 2016method. 

2016 

Cash at banks and on hand 41,005 11,787 25,048 

Short-term deposits 5,516 5,584 5,584 

Pipeline fill 

46,521 17,371 30,632 


pipeline. Cash at banks This earns is on interest the basis at floating that it rates is not based held on for daily sale interest or consumed rates. Short-term in a production deposits process, are made but is 

necessary for varying to periods the operation of between of a one facility day during and more three than months, one depending operating cycle, on the and immediate its cost cash cannot be 

recouped 

requirements 

through 

of the Group, 

sale (or 

and 

is 

earn 

significantly 

interest at 

impaired). 

the respective 

This 

short-term 

applies even 

deposit 

if 

rates. 

the part of inventory that is 

deemed For the purpose to be an of item the consolidated of property, statement plant and of equipment cash flows, cannot cash be and separated cash equivalents physically comprise from the the rest of 

inventory. following: It is valued at cost and is depreciated over the useful life of the related asset. 



2016 


The Cash Group at banks assesses and on at hand each reporting date 41,005 whether there is 11,787 an indication that an 25,048 asset may be impaired. 

Short - term deposits 5,516 5,584 5,584 

If Cash any and indication short -term exists, deposits or when annual impairment 46,521 testing for 17,371 an asset is required, 30,632 the Group estimates 

the Bank asset’s overdrafts recoverable amount. An asset’s (3,713) recoverable amount (3,713) is the higher (2,560) of an asset’s or cash 

Cash and cash equivalents 42,808 13,658 28,072 



Restricted cash of US$ 27,462 as at December 31, 2017 of which US$ 10,611 is current (December 31, 


2016 of US$ 19,220 of which US$ 7,370 is current and January 1, 2016 of US$ 20,856 of which US$ 


6,444 is current) relates to: 



• Collateral with reference to Staatsolie’s long term loans and funding for interest and loan 

(re)payment US$ 11,351. 


• Collateral with reference to the SPCS loan and funding of interest and loan (re)payment of US$ 


10,611. 

Impairment • Corporate losses parent of guarantees continuing of operations Staatsolie are to secure recognized Ventrin’s the operational consolidated activities statement US$ 5,500. of profit or loss 



recognized in OCI up to the amount of any previous 

Page 141 

revaluation. 

Page 63


142 



(continued) 


6.2 Trade and other receivables 


x US$ 1,000 are those neither classified as held-for-trading 2017 nor designated at fair 2016value through profit 2016or loss. 



Trade receivables 107,248 101,878 118,319 


Prepayments and other current assets 27,175 44,472 43,304 

cumulative gain or loss is recognized in other 134,423 operating income or 146,350 expense, or the 161,623 investment is 



For terms and conditions relating to related party receivables, refer to Note 7. Trade receivables are noninterest 

bearing and are generally on terms of 30–90 days net of provisions. 


(ii) 

Movements 

Financial 

in 

liabilities 

the provision for impairment of receivables: 

Recognition x US$ 1,000and measurement 



As at January 1 11,288 6,690 

loss, Addition loans and borrowings, payables, as appropriate. 813All financial liabilities 5,203are recognized initially at fair 

value Amounts and, written in the case off of loans and borrowings and (687) payables, net of directly (127) attributable transaction costs. 

Unused amounts reversed (3,433) (478) 

The As at Group’s December financial 31 liabilities include trade and 7,981 other payables, loans 11,288 and borrowings including bank 

overdrafts. 

The ageing analysis of the trade receivables (net of provision for impairment) is, as follows: 


This is the category most relevant to the Group. After Past initial due recognition, but not impaired interest bearing loans and 

Neither past 


due nor 

61-90 91-120 

recognized x US$ 1,000in the Total consolidated impaired statement < 30 of days profit 30-60 or loss days when days the liabilities days are >120 derecognized days as well as 

through 


the EIR amortization 

107,248 

process. 

30,490 

Amortized 

8,845 

cost 

9,614 

is calculated 

1,339 

by taking 

2,674 

into account 

54,286 

any discount or 

premium 2016 on acquisition 101,878and fees 28,588 or costs 11,330 that are an 3,680 integral 1,679 part of the 4,971 EIR. The 51,630 EIR amortization is 

included As at January in finance costs in the consolidated statement of profit or loss. This category generally applies to 

118,319 14,338 22,933 2,712 5,159 5,099 68,078 

interest-bearing 1, 2016 loans and borrowings. 

Included in the accounts receivable amount of US$ 107,248 as at December 31, 2017 is a balance of 


US$ 82,394 for the delivery of electricity to GoS and oil deliveries to N.V. EBS. The outstanding payable 


to PDVSA Petróleo, S.A. (“PDVSA”) amounting to US$ 49,658 has been used as a settlement with GoS, 

Raw based materials: on the written confirmation from GoS that all payment obligations of Staatsolie due to PDVSA 

• pursuant Purchase to the cost contract is valued will on be weighted assigned average to GoS. method The remainder of US$ 32,736 will be settled by 

applying the amounts payable to GoS at December 31, 2017. After these settlements, the net payable 


balance to GoS amounts to US$ 11,230. 



Page 142 62




(continued) 

Inventories determining are stated the recoverability at the lower of of a cost trade and or net other realizable receivable, value. the Net Group realizable performs value is a the risk estimated analysis 

selling considering price the in the type ordinary and age course of the outstanding of business, receivable less estimated and the costs creditworthiness of completion of the and counterparties. 

the estimated 


Prepaid expenses and other current assets consisted of the following: 


appropriate proportion of depreciation, depletion and amortization and overheads As at January based 1, on normal 


2016 


Receivable from personnel 18 10 440 


Prepaid to puchasing agents - - 750 

ordinary Prepaid insurance course of costs business, less the estimated costs of completion 805 and the 916 estimated costs 832 necessary to 

make Receivable the sale. from Surgold - 8,660 - 

Interim dividend 6,000 - - 

Materials Downpayment and supplies vendors are valued using the weighted average 4,246cost method. 12,631 16,630 

Prepaid purchased goods, services and other 8,714 4,562 5,407 

Net sales tax receivable 7,392 17,693 19,245 

Pipeline fill 

27,175 44,472 43,304 



necessary 

6.3 Inventories 

to the operation of a facility during more than one operating cycle, and its cost cannot be 

recouped through sale (or is significantly impaired). This applies even if the part As of at January inventory 1, that is 

deemed x US$ 1,000 to be an item of property, plant and equipment 2017 cannot be separated 2016physically from 2016 the rest of 


Petroleum products 3,089 22,943 20,829 

Materials and supplies 58,674 39,755 43,699 

Ordered 

n. 

goods 

Impairment of non-financial assets 

461 3,171 7,861 

Carrying value at NRV 62,224 65,869 72,389 



During 2017, US$ 950 was recognized as an expense for inventories to recognize a provision for 


obsolete inventories. During 2016 US$ 194 was released from the provision for obsolete inventories. 


individual During 2017, asset, US$ unless 236,866 the (2016: asset US$ does 242,163) not generate was recognized cash inflows as that an expense are largely for independent inventories carried of those at 

from cost. This other is assets recognized or groups in cost of of assets. sales. Where the carrying amount of an asset or CGU exceeds its 










Page 143 63


144 


Notes to the Consolidated financial statements for the years ended December 31, 31, 2017 2017 and and 2016 2016 

(continued) 


6.4 Trade payables, accruals and other liabilities 


x US$ 1,000 are those neither classified as 2017 held-for-trading nor 2016 designated at fair value 2016through profit or loss. 



Trade payables 90,570 96,618 110,350 


Accrued liabilities 95,709 87,839 49,014 

cumulative Other liabilities gain or loss is recognized 1,816in other operating 5,441income or expense, 13,263 or the investment is 

determined to be impaired, at which 188,095 time, the cumulative 189,898 loss is reclassified 172,627 to the consolidated statement 


to Terms determine and conditions whether the of the ability above and financial intention liabilities: to sell them in the near term is still appropriate. 

- Trade payables are non-interest bearing and are normally settled on 30-day terms. 

(ii) Financial - Accruals liabilities consist mainly of a current account with the GoS amounting to US$ 63,087 

Recognition (2016: and US$ measurement 63,087), accrued interest on loans and allowances payable to management and 

Financial 

personnel. 

liabilities are 

All items 

classified, 

are non-interest 


bearing and 

as 

are 

financial 

normally 

liabilities 

settled 

at 

on 

fair 

30-day 

value 

terms. 

through profit or 

loss, 

- 

loans 

Other 

and 

liabilities 

borrowings, 

include 

payables, 

sales, dividend 

as appropriate. 

and payroll 

All financial 

tax payables 

liabilities 

and are 

are 

non-interest 

recognized 

bearing. 

initially at fair 



overdrafts. 
















Page 144 62


Staatsolie Staatsolie Maatschappij Maatschappij Suriname Suriname N.V. N.V. 

Notes Notes to to the the Consolidated Consolidated financial financial statements statements for for the the years years ended ended December December 31, 31, 2017 2017 and and 2016 2016 

(continued) (continued) 


Section 7. Group information and related party disclosures 


costs Information to sell. about subsidiaries 

The consolidated financial statements of the Group with Staatsolie N.V. as the main shareholder includes 


the following subsidiaries: 



Country of in 

Subsidiaries Activities 

% Equity Interest 

The net realizable value of crude oil and refined Corporation products is based on the estimated selling price in the 


ordinary 

GOw2 

course of 

Distributions 

business, less 

and 

the 

Trading 

estimated 

Suriname 

costs of completion and the estimated 

100 

costs 

100 

necessary to 

make Ventrin the sale. 

POC 

Distributions and Trading 

Exploration activities 

Trinidad and Tobago 

Suriname 

100 

100 

100 

100 

Materials SPCS and supplies Electricity are valued Generator using the weighted Surinameaverage cost method. 99.99 99.99 

Pipeline POC is at fill this moment a dormant company and activities were put on hold since 2015. The noncontrolling 

oil, which interest is in necessary SPCS is not to bring material a pipeline to the Group. into working order, is treated as a part of the related 

Crude 


necessary Joint arrangement to the operation in which the of a Group facility is during a joint venture more than one operating cycle, and its cost cannot be 

recouped The Group through has a 25% sale interest (or is significantly in Suriname impaired). Gold Project This C.V. applies (2016: even 25%, if January the part 1, of 2016: inventory 25%). that is 


During the year, the Group entered into the following transactions, in the ordinary course of business with 


related parties. These transactions consist of sale and delivery of petroleum products and electricity, 

purchase of electricity, and rendering of maritime services from the Maritieme Autoriteit Suriname. The 


following companies are all state-owned enterprises and therefore are related parties due to the common 


ownership: 



N.V. Energie Bedrijven Suriname (EBS) 


Sales of Purchases Trade Trade 


x US$ 1,000 goods of goods receivables payables 


recoverable 2015 amount, 44,894 the asset is considered 5,960 impaired 33,178 and is written 547 down to its recoverable amount. In 

2016 32,648 33,293 1,716 334 



2017 36,168 11,013 16,593 380 







Page 63 145


146 

Staatsolie Maatschappij Maatschappij Suriname Suriname N.V. N.V. 

Notes 

Notes 

to 

to 

the 

the 

Consolidated 

Consolidated 

financial 

financial 

statements 

statements 

for the 

for 

years 

the years 

ended 

ended 

December 

December 

31, 2017 

31, 

and 


2016 

and 2016 

(continued) 

(continued) 


Suriname American Industries Limited (SAIL) 


x US$ are 1,000 those goods neither classified of goods as held-for-trading receivables nor designated payablesat fair value through profit or loss. 



2015 428 - 1,975 - 

unrealized 2016gains or losses 351 recognized as - OCI until the 1,939 investment is -derecognized, at which time, the 

cumulative 


gain or loss 

626 

is recognized 

- 

in other operating 

1,952 

income or 

- 

expense, or the investment is 

determined Melkcentrale to be Paramaribo impaired, at N.V. which time, the cumulative loss is reclassified to the consolidated statement 




x US$ 1,000 goods of goods receivables payables 

(ii) Financial 2015 liabilities 

2016 

44 

36 

- 

- 

3 

6 

- 

- 

Recognition 2017 and measurement 73 - 7 - 


Maritieme Autoriteit Suriname (MAS, the maritime authority of Suriname) 


value and, in the case 

Sales 

of loans 

of 

and 

Purchases 

borrowings 

Trade 

and payables, net 

Trade 

of directly attributable transaction costs. 

x US$ 1,000 goods of goods receivable payable 


overdrafts. 

2015 

2016 

- 

15 

5 

7 

- 

- 

1 

3 

Loans 2017 and borrowings 10 12 - - 


borrowings Loans from/to are subsequently related parties measured at amortized cost using the EIR method. Gains and losses are 


x US$ 1000 

through the EIR amortization process. Amortized cost Interest is calculated Amounts by taking owed into by 

From: 

To: 

account any discount or 

charges related parties 


Government 

included in finance Staatsolie costs in the consolidated 2017 statement of 24,192 profit or loss. This 258,412 category generally applies to 

of Suriname 

interest-bearing loans and borrowings. 2016 - 258,058 

As at January 1, 2016 - - 


Government of 

SPCS 

2017 959 19,375 

Suriname 

Petroleum products are valued at the 2016 lower of cost and net 1,278 realizable value. 23,044 

As at January 1, 2016 - - 


• 


Purchase cost 

EBS 

is valued on weighted 


average method 

- - 

2016 64 805 

As at January 1, 2016 64 805 




Page 62




(continued) 

Inventories Dividend to are related stated parties at the lower of cost and net realizable value. Net realizable value is the estimated 

selling The Group price made in the an ordinary interim payment, course of subject business, to approval, less estimated regarding costs dividend of completion to their shareholders, and the estimated GoS, 

of costs US$ to 6,000 sell. in 2017 regarding fiscal year 2017 (refer to note 6.2). 


Trade appropriate receivables proportion from of / trade depreciation, payables depletion to shareholder and amortization (GoS) and overheads based on normal 

As operating December capacity, 31, determined 2017, the on Group a weighted had a average trade receivable basis. balance of US$ 82,394 due from their 

shareholders, while the trade payable balance due to their shareholders was US$ 63,087 (refer to notes 


6.2 and 6.4 respectively). 



Terms and conditions of transactions with related parties 

The Materials sales and to and supplies purchases are valued from related using the parties weighted are made average in the cost ordinary method. course of business. There is an 

arrangement with GoS for the settlement of the trade receivables from EBS and GoS the outstanding 

payables Pipeline fill to GoS. 


One guarantee has been provided to Ventrin in the amount of US$ 5,500. This guarantee is with the First 


Caribbean International Bank. For the year ended December 31, 2017 and 2016, the Group has not 


recorded any impairment of receivables relating to amounts owed by related parties, except for one 


related party namely SAIL. The receivable amounted to US$ 1,952 as at December 31, 2017 of which the 


amount is fully provided. The outstanding amount of Melkcentrale was paid in January 2018. 


Compensation of key management personnel of the Group: 



The Short Group term employee assesses at benefits each reporting date whether there is an indication 2,432 that an asset 2,109 may be impaired. 

If Post-employment any indication exists, pension or when and medical annual benefits impairment testing for an asset is 827 required, the 892 Group estimates 

Total Compensation paid to key management personnel 3,259 3,001 



There are no other related party transactions. 












Page 147 63


148 


Notes to to the the Consolidated financial statements for the years ended December 31, 2017 and 2016 

(continued) 


Section 8. Other 

8.1 Events after the reporting period 



After On 25 initial May, measurement, 2018 Staatsolie AFS commenced financial its investments loan diversification are subsequently strategy by measured refinancing at its fair loan value portfolio with 

unrealized with a seven gains years or US$ losses 625 recognized million term as loan, OCI bearing until the 5.125% investment interest is derecognized, + 3 months LIBOR at which (comprising time, the a 

cumulative grace period gain of 18 or months). loss is The recognized outstanding other corporate operating term income loan balances or expense, were redeemed or the investment for US$ 298 is 

determined million (including to be SPCS impaired, loan at for which US$ time, 70 million), the cumulative and the loss loan is to reclassified the Government to the of consolidated Suriname was statement repaid 

of for profit US$ or 261.5 loss million. in finance Simultaneously costs and removed a new from seven-year the OCI. term The loan Group for US$ evaluates 625 million its AFS was financial executed assets on 

to the determine same date. whether The refinancing the ability and also intention included to the sell buyback them in of the the near 4.8% term stake is still of appropriate. the GoS related to their 

financial contributions made in 2016 on Staatsolie’s behalf to the limited partnership agreement with 

(ii) Newmont Financial Suriname liabilities LLC. 


8.2 Standards issued but not yet effective 


loss, 

The standards 

loans and 

and 

borrowings, 

interpretations 

payables, 

that 

as 

are 

appropriate. 

issued but 

All 

not 

financial 

yet effective 

liabilities 

up 

are 

to 

recognized 

the date of 

initially 

issuance 

at fair 

of 

value 

Staatsolie’s 

and, in 

consolidated 

the case of loans 

financial 

and 

statements 

borrowings 

are 

and 

disclosed 

payables, 

below. 

net of 

These 

directly 

are 

attributable 

the changes 

transaction 

that Staatsolie 

costs. 

The 

reasonably 

Group’s 

expects 

financial 

will 

liabilities 

have an 

include 

impact on 

trade 

its disclosures, 

and other payables, 

financial position 

loans and 

or 

borrowings 

performance 

including 

when applied 

bank 

overdrafts. 

at a future date. Staatsolie intends to adopt these standards and interpretations, if applicable, when they 

become effective. Standards and interpretation that are issued but not yet effective as at year end that 

Loans 

are not 

and 

expected 

borrowings 

to have an impact to the Group consolidated financial statement have not been listed 

This 

below. 

is the category most relevant to the Group. After initial recognition, interest bearing loans and 


recognized 

1. IFRS 

in 

9 

the 

Financial 

consolidated 

Instruments 

statement of profit or loss when the liabilities are derecognized as well as 

through 

In July 2014, 

the EIR 

the 

amortization 

IASB issued 

process. 

the final 

Amortized 

version of 

cost 

IFRS 

is 

9 

calculated 

Financial 

by 

Instruments 

taking into 

that 

account 

replaces 

any 

IAS 

discount 

39 and 

or 

premium 

all previous 

on 

versions 

acquisition 

of IFRS 

and fees 

9. IFRS 

or costs 

9 brings 

that are 

together 

an integral 

all three 

part 

aspects 

of the 

of 

EIR. 

the 

The 

accounting 


for financial 

is 

included 

instruments 

in finance 

project: 

costs 

classification 


and measurement, 

statement of 

impairment 

profit or loss. 

and 

This 

hedge 

category 

accounting. 

generally 

IFRS 

applies 

9 

to 

is 


effective for annual 

loans 

periods 


beginning on or after January 1, 2018, with early application permitted. 

Except for hedge accounting, retrospective application is required, but the provision of comparative 

information m. is Inventories not compulsory. Staatsolie plans to adopt the new standard on the required effective date. 


During 2016, Staatsolie has performed a high-level impact assessment of all three aspects of IFRS 9. 

Raw This materials: preliminary assessment is based on currently available information and may be subject to changes 

• arising Purchase from further cost is detailed valued on analysis weighted or average additional method reasonable and supportable information being made 

Finished available goods to Staatsolie and work in the in progress: future. 



Page 148 62




(continued) 

(a) Inventories Classification are stated and measurement 

at the lower of cost and net realizable value. Net realizable value is the estimated 

Overall, selling price Staatsolie in the ordinary expects course the adoption of business, of IFRS less 9 estimated may have costs an of effect completion on the and classification the estimated and 

measurement costs to sell. of its financial assets, but no significant impact on the classification and measurement of 

the financial liabilities or equity. 


Staatsolie appropriate will proportion consider of whether depreciation, any of the depletion sales contracts and amortization contain an and embedded overheads derivative, based on but normal do not 

meet operating the capacity, normal sales determined and purchases on a weighted exemption. average Under basis. IAS 39, where provisionally priced sales 

contracts contain an embedded derivative that is considered to be closely related to the host contract, this 


is not separated from the host contract until delivery into the contract for accounting purposes under IAS 


39. Accordingly, the embedded derivative, which does not qualify for hedge accounting, is recognized at 


fair value, with subsequent changes in fair value recognized in the statement of profit or loss and other 

comprehensive Materials and supplies income are each valued period using until the final weighted settlement. average The initial cost method. estimate of fair value and subsequent 

changes in fair value up until final settlement, are estimated by reference to forward market prices. 

Pipeline fill 

On adoption of IFRS 9, embedded derivatives will no longer be separated from the host receivable as 


these receivables are not expected to give rise to cash flows that represent solely payments of principal 


and interest. Instead, the receivables will be accounted for as one instrument and measured at fair value 


through profit or loss with subsequent changes in fair value recognized in the statement of profit or loss 


and other comprehensive income each period until final settlement. This will mean that the quantum of 


the fair value movements may be different under IFRS 9, because the fair value of the receivable will 


factor in the impact of credit and interest rates. 

Other non-provisionally n. Impairment priced of non-financial trade receivables assets are considered to be held to collect contractual cash 

flows The Group and are assesses expected at each to give reporting rise to cash date whether flows representing there is an solely indication payments that an of asset principal may and be impaired. interest. 

Staatsolie If any indication expects exists, that or these when will annual continue impairment to be measured testing for at an amortized asset is required, cost under the IFRS Group 9. estimates However, 

Staatsolie the asset’s will recoverable analyze the amount. contractual An cash asset’s flow recoverable characteristics amount of these is the instruments higher of in an more asset’s detail or before cash 

concluding generating whether units (CGU) all these fair instruments value less costs meet of the disposal criteria for and amortized its value cost in use. measurement It is determined under IFRS for an 9. 

For individual other asset, financial unless assets the currently asset does measured not generate fair cash value, inflows e.g., derivative that are largely financial independent assets, Staatsolie of those 

expects from other to continue assets or measuring groups of these assets. at fair Where value. the carrying amount of an asset or CGU exceeds its 

There recoverable will be amount, no impact the on asset financial is considered liabilities. impaired and is written down to its recoverable amount. In 


Impairment discount rate that reflects current market assessments of the time value of money and the risks 

(b) 

IFRS specific 9 requires to the asset. to now In use determining an expected fair value credit less loss costs model of for disposal, its trade recent receivables market measured transactions at amortized are taken 

cost, into account. either on If no a such 12-month transactions or lifetime can basis. be identified, Staatsolie an appropriate expects to valuation apply the model simplified is used. approach and 

record Impairment lifetime losses expected of continuing losses on operations all trade receivables are recognized measured in the consolidated amortized cost. statement Given of the profit short-term 

loss 

nature in those of expense these receivables, categories Staatsolie consistent does with not the expect function these of changes the impaired will have asset, a significant except for impact. a property 



Page Page 149 63


150 



(continued) 

(c) Available-for-sale Hedge accounting (AFS) financial investments 

The AFS changes financial in investments IFRS 9 relating include to hedge equity and accounting debt securities. will have Equity no impact investments as Staatsolie classified does as not availablefor-sale 

hedge are those accounting. neither classified as held-for-trading nor designated at fair value through profit or loss. 

currently 

apply 


unrealized 2. IFRS gains 15 Revenue or losses from recognized Contracts as OCI with until Customers the investment is derecognized, at which time, the 

cumulative IFRS 15 was gain issued or loss in May is 2014 recognized and establishes in other operating a five-step income model to or account expense, for or revenue the investment arising from is 

contracts determined with to be customers. impaired, at Under which IFRS time, the 15, cumulative revenue is loss recognized is reclassified at an to the amount consolidated that reflects statement the 

consideration of profit or loss to in which finance costs entity and expects removed to be from entitled the in OCI. exchange The Group for transferring evaluates its goods AFS or financial services assets to a 

customer. 

determine whether the ability and intention to sell them in the near term is still appropriate. 

The new revenue standard will supersede all current revenue recognition requirements under IFRS. 

Either (ii) Financial a full retrospective liabilities application or a modified retrospective application is required for annual periods 

beginning Recognition on and or after measurement January 1, 2018. Early adoption is permitted. 

Financial Staatsolie liabilities plans to are adopt classified, the new at standard initial recognition, on the required as financial effective liabilities date using at fair the value modified through retrospective profit or 

loss, method. loans and borrowings, payables, as appropriate. All financial liabilities are recognized initially at fair 


During 2017, Staatsolie commenced its preliminary assessment of IFRS 15, which may be subject to 


changes as more detailed analysis is completed. Furthermore, Staatsolie is considering the clarifications 

overdrafts. 

issued by the IASB in April 2016 and will monitor any further development. 

Loans Staatsolie and is borrowings 

the business of exploring for, developing, producing, refining and selling oil and electricity 

This to customers is the category in various most locations relevant around to the the Group. world. To After date, initial Staatsolie recognition, has identified interest the bearing following loans issues and 

borrowings that require are consideration: subsequently measured at amortized cost using the EIR method. Gains and losses are 


through (a) Provisionally the EIR amortization priced sales process. Amortized cost is calculated by taking into account any discount or 

As premium discussed on acquisition under IFRS and 9 fees Financial or costs Instruments that are an above, integral from part time of to the time EIR. Staatsolie The EIR may amortization enter into is 

contracts included in contain finance provisional costs in the pricing consolidated features statement which are considered of profit or loss. to be This embedded category derivatives. generally applies to 

Under 


IAS 18 Revenue, 

loans and 

revenue 

borrowings. 

is recognized at the estimated fair value of the total consideration 

received or receivable when the crude oil is shipped and risks and rewards are considered to have 

passed. 

m. 

This 

Inventories 

fair value is based on the most recently determined estimate of crude oil price given the 

specific 

Petroleum 

quality 

products 

of the 

are 

crude 

valued 

and 

at 

the 

the 

estimated 

lower of cost 

forward 

and 

price 

net realizable 

which the 

value. 

entity expects to receive. The initial 

estimate Raw materials: of the fair value of the embedded derivative, and subsequent changes in fair value up until final 

settlement, • Purchase are cost also is valued estimated on weighted by reference average to forward method market prices. The subsequent changes in fair 

value are recognized in the statement of profit or loss and other comprehensive income each period until 


final settlement. 



Page Page 150 62




(continued) 

IFRS Inventories 15 will are not stated change at the the assessment lower of cost of and the net existence realizable of embedded value. Net derivatives. realizable value IFRS is 15 the states estimated that if 

a selling contract price is partially in the ordinary within scope course of this of business, standard less and partially estimated in the costs scope of completion of another standard, the estimated an entity 

will costs first to apply sell. the separation and measurement requirements of the other standard(s). Therefore, to the 

extent The cost that of provisional crude oil pricing and refined features products are considered is the purchase embedded cost, derivatives the cost that of require refining, separation including from the 

their appropriate host contract, proportion they of will depreciation, continue to be depletion outside and the scope amortization of IFRS and 15 and overheads entities will based be required on normal to 

account operating for capacity, these in determined accordance on with a weighted IFRS 9. average Revenue basis. in respect of the host contract will be recognized 

when control passes to the customer (which has been determined to be the same point in time, i.e., when 


the crude oil is physically transferred into a vessel, pipe or other delivery mechanism) and will be 


measured at the amount the entity expects to be entitled – being the estimate of the price expected to be 


received, based on the most recently determined estimate of crude quality differential and the estimated 

forward Materials price and (which supplies is are consistent valued with using current the weighted practice). average As noted cost above method. in the discussion on the potential 

impact of IFRS 9, the embedded derivative will no longer be separated from the host contract. This is 

because Pipeline fill the existence of the provisional pricing features will mean the receivable will fail to meet the 

requirements Crude oil, which to be is measured necessary at to amortized bring a pipeline cost and into instead working the order, entire is receivable treated as will a be part measured of the related to fair 

value pipeline. with This subsequent is on the basis movements that it is being not held recognized for sale in or the consumed statement in a of production profit or loss process, and but other is 

comprehensive necessary to the income. operation of a facility during more than one operating cycle, and its cost cannot be 


When it comes to the presentation of amounts arising from such provisionally priced contracts, IFRS 15 


requires “revenue from contracts with customers” to be disclosed separately from other types of revenue. 


This means that revenue recognized from the initial sale must be separately disclosed in the consolidated 

financial statements from any revenue/income recognized from subsequent movements in the fair value 


of the related receivable. 



(b) Other presentation and disclosure requirements 


In addition to the presentation and disclosure requirements discussed above, IFRS 15 contains other 


presentation and disclosure requirements which are more detailed than current IFRS. The presentation 


requirements represent a significant change from current practice and will increase the volume of 


disclosures required in Staatsolie’s consolidated financial statements. Many of the disclosure 


requirements in IFRS 15 are completely new. In 2017 Staatsolie started to consider the new systems, 



internal controls, policies and procedures necessary to collect and disclose the required information. 







Page Page 151 63


152 



(continued) 

Available-for-sale 3. IFRS 16 Leases (AFS) financial investments 

AFS IFRS financial 16 was investments issued January include 2016 equity and and it replaces debt securities. IAS 17 Equity Leases, investments IFRIC 4 Determining classified as whether availablefor-sale 

Arrangement are those contains neither a classified Lease, SIC-15 as held-for-trading Operating nor Leases-Incentives designated at fair and value SIC-27 through Evaluating profit or loss. the 

an 

After Substance initial of measurement, Transactions Involving AFS financial the Legal investments Form of a are Lease. subsequently IFRS 16 sets measured out the at principles fair value for with the 

unrealized recognition, gains measurement, or losses presentation recognized as and OCI disclosure until the of investment leases and is requires derecognized, lessees at to which account time, for the all 

cumulative leases under gain a single or loss on-balance is recognized sheet model in other similar operating to the accounting income or for expense, finance or leases the under investment IAS 17. is 

The determined standard to be includes impaired, two at recognition which time, exemptions the cumulative for loss lessees is reclassified – leases to of the ’low-value’ consolidated assets statement (e.g., 

personal of profit or computers) loss in finance and costs short-term and removed leases (i.e., from leases the OCI. with The a lease Group term evaluates of 12 months its AFS financial or less). assets At the 

commencement to determine whether date the of a ability lease, and a lessee intention will to recognize sell them a in liability the near to make term is lease still appropriate. 

payments (i.e., the lease 

liability) and an asset representing the right to use the underlying asset during the lease term (i.e., the 

right-of-use (ii) Financial asset). liabilities Lessees will be required to separately recognize the interest expense on the lease 

liability and the depreciation expense on the right-of-use asset. 


Lessees Financial will liabilities be also are required classified, to re-measure at initial recognition, the lease liability as financial upon liabilities the occurrence at fair value of certain through events profit (e.g., or 

a loss, change loans in and the borrowings, lease term, a payables, change in as future appropriate. lease payments All financial resulting liabilities from are a change recognized in an initially index or at rate fair 

used value and, to determine the case those of loans payments). and borrowings The lessee and payables, will generally net of directly recognize attributable the amount transaction of the costs. remeasurement 

The Group’s financial of the lease liabilities liability include as an adjustment trade and other to the payables, right-of-use loans asset. and borrowings including bank 

Lessor overdrafts. accounting under IFRS 16 is substantially unchanged from today’s accounting under IAS 17. 

Lessors will continue to classify all leases using the same classification principle as in IAS 17 and 

distinguish Loans and borrowings between two types of leases: operating and finance leases. IFRS 16 also requires lessees and 

lessors This is to the make category more most extensive relevant disclosures to the Group. than under After IAS initial 17. recognition, IFRS 16 is effective interest bearing for annual loans periods and 

beginning borrowings on are or subsequently after January 1, measured 2019. Early at amortized application cost is permitted, using the but EIR not method. before an Gains entity and applies losses IFRS are 

15. recognized A lessee in can the choose consolidated to apply statement the standard of profit using or loss either when a full the retrospective liabilities are or derecognized a modified retrospective as well as 

approach. through the The EIR standard’s amortization transition process. provisions Amortized cost permit is calculated certain reliefs. by taking In 2017, into account Staatsolie any is discount currently or 

assessing premium on the acquisition potential effect and fees of IFRS or costs 16 on that its consolidated are an integral financial part of statements. the EIR. The EIR amortization is 










Page Page 152 62

This page is left blank intentionally.

Contact 

Information 

Head Office 

Dr. Ir. H.S. Adhinstraat 21 

PO Box 4069 

T +597 499649 

F +597 491195 

www.staatsolie.com 

E info@staatsolie.com 

Downstream Operations 

Sir Winston Churchillweg 309 

T +597 480501 

F +597 480811 

Upstream Operations 

Gangaram Pandayweg km 5½ 

T +597 375222 

F +597 491105 

Subsidiaries 


Van ‘t Hogerhuysstraat 27A 

T +597 403111 

F +597 402116 

E info@gow2.com 


Sir Winston Churchillweg 309D 

T +597 485163 

F +597 485178 

Ventrin Petroleum Company Ltd. 

(Trinidad and Tobago) 

Atlantic Plaza 

Port Point Lisas 

Couva 

Trinidad and Tobago 

T +1 868 6792962 

F +1 868 679 2622


156 



(continued) 
















overdrafts. 
















www.staatsolie.com 

www.facebook.com/staatsolie 

Page 62

Staatsolie Annual Report 2017

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