Staatsolie Annual Report 2017

Confidence in Our Own Abilities
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Staatsolie Maatschappij Suriname N.V.
Staatsolie Maatschappij Suriname N.V.
Notes to the Consolidated financial 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)
Available-for-sale (AFS) financial investments
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
loss, loans and borrowings, payables, as appropriate. All financial liabilities are recognized initially at fair
Average price of actual crude sales and the PIRA price premise for 2017 are the same requiring no
value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.
adjustment for price differential. The same oil price premise was applied for all reserve categories less a
The Group’s financial liabilities include trade and other payables, loans and borrowings including bank
transfer premium. A shrinkage factor of 1% was also applied to capture losses in delivery of crude to the
overdrafts.
refinery.
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
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