Extractive Industry Specialists
Expert Accountants for Oil, Gas and Mining in UAE
Extractive industries burn through capital long before the first barrel flows or the first ore ships. IFRS 6 exploration accounting, unit-of-production depletion, asset retirement obligations, joint venture cost allocations, production sharing agreements: these demand accountants who speak your industry’s language fluently.
Our Technology Ecosystem
Why Extractive Operations Demand Specialized Accountants
No other industry commits billions to assets that might yield nothing. A dry well writes off years of capitalized costs overnight. A successful strike transforms exploration assets into depletable reserves requiring entirely different accounting treatment. Our oil gas mining accountants UAE navigate this high-stakes landscape where a single accounting policy choice on successful efforts versus full cost methodology reshapes your entire balance sheet.
The Accounting Lifecycle of Extraction
Exploration costs present the first critical decision. Under IFRS 6, you choose whether to capitalize or expense drilling, seismic surveys, and geological studies. The successful efforts method capitalizes only costs linked to proven reserves while expensing dry holes immediately. Full cost methodology capitalizes everything by cost centre. This choice directly impacts reported earnings, asset values, and investor perception during years when exploration dominates activity.
Once reserves are proven, depletion replaces depreciation. The unit-of-production method allocates capitalized costs based on barrels extracted or tonnes mined against total estimated reserves. Reserve estimates change constantly with new geological data, extraction technology, and commodity prices. Each revision recalculates your depletion rate prospectively, rippling through cost of goods sold and margins.
Then comes the liability most extractive companies underestimate: asset retirement obligations. Decommissioning rigs, plugging wells, restoring mining sites, these future costs must be recognized as liabilities at present value from day one, accreting interest annually until the cash finally flows out decades later.
Our Expert Services
Full-Cycle Financial Services for Extractive Operations
From pre-license geological surveys through production peak to final decommissioning, our accounting support for oil gas mining operations covers every phase of the extractive lifecycle. We structure your chart of accounts for joint interest billing, configure depletion schedules tied to reserve estimates, and maintain the ARO calculations that satisfy both auditors and regulators.
IFRS 6 exploration asset capitalization, successful efforts versus full cost implementation, unit-of-production depletion, joint interest billing, PSA revenue recognition, and reserve-based asset impairment testing.
Reserve estimation review, ARO calculation verification, joint venture audit support, cost recovery audits under production sharing contracts, and annual financial statement preparation.
Hydrocarbon export zero-rating, capital equipment import VAT recovery, contractor and subcontractor VAT management, intercompany supply treatment, and FTA compliance filing.
Field crew rotational schedules, offshore allowances, hazard pay calculations, expatriate tax equalization, gratuity provisioning, and WPS-compliant salary transfers.
Concession-specific tax regime analysis, cost oil versus profit oil allocation, transfer pricing for intercompany services, and 9% corporate tax compliance for non-concession activities.
Ministry of Energy reporting, ADNOC and NOC partner requirements, environmental bond documentation, HSE expenditure tracking, and regulatory submission preparation.
Let’s Simplify Your Finance, Tax & Compliance Challenges
Serving the Full Spectrum of Extractive Operations
Extractive industries share accounting DNA but differ in execution. Upstream oil and gas operators work under concession agreements or production sharing contracts with national oil companies. Mining operations face different reserve classification standards and rehabilitation requirements. Quarrying businesses operate shorter extraction cycles with simpler depletion calculations.
Each segment demands tailored approaches. Offshore operators carry higher ARO liabilities for platform decommissioning. Onshore producers manage surface rights and landowner royalties. Mining companies track ore grades affecting reserve valuations. Service contractors to the extractive sector face contract accounting and equipment leasing complexities under IFRS 16.
Whether you hold ADNOC partnership stakes, operate independent fields, run mining concessions, or supply services to extraction operations, our project accounting for oil gas mining adapts to your specific contractual and regulatory framework.
UAE Wide Coverage
Extractive Industry Accountants Nationwide
Supporting oil, gas, and mining operations across UAE with IFRS-compliant reporting and regulatory filings.
Dubai
Trading hubs, service company headquarters, and regional finance centres for extractive multinationals.
Sharjah
Gas field operations, quarrying activities, and oilfield service companies serving the Northern Emirates.
Fujairah
Oil storage, bunkering operations, and strategic petroleum reserve facilities on the Eastern seaboard.
Why Taxfin ABM
Technical Depth for Capital-Intensive Industries
Generic accountants struggle with extractive complexities. We bring technical fluency in IFRS 6, unit-of-production calculations, joint venture accounting, ARO estimation, and the concession-specific tax regimes that govern UAE hydrocarbon operations.
Our Extractive Industry Edge
Reserve-Based Accounting
Depletion tied to geological estimates, recalculated as reserve reports update, affecting margins accurately.
ARO Expertise
Decommissioning liabilities recognized at present value, accreted annually, satisfying auditor scrutiny.
JV Cost Allocation
Joint interest billing reconciled, working interest shares calculated, partner disputes minimized.
PSA Revenue
Cost oil recovery tracked, profit oil splits calculated, government take reported correctly.
Impairment Testing
Exploration assets tested against indicators, write-downs recognized when reserves prove uneconomic.
Our Process
Engagement Methodology
Extractive clients require deep operational understanding before financial systems make sense. We invest upfront in learning your concession terms, JV structures, and production phases.
Operational Deep-Dive
Review concession agreements, JOAs, reserve reports, and capital programs to understand your operational reality.
Accounting Framework Design
Establish IFRS 6 policies, depletion methodologies, ARO models, and JV allocation mechanisms tailored to your operations.
Ongoing Production Support
Monthly JIB reconciliation, quarterly reserve-based recalculations, annual ARO updates, and regulatory submissions.
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Need Assistance?
Have a project in mind or questions about our services? We’re here to assist you every step of the way. Reach out to us anytime!
Location
Office No 805-038 Clover Bay, Plot No 42-0 Business Bay, Land DM No,346-454, UAE
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FAQs
Frequently Asked Questions
What is IFRS 6 and why does it matter?
IFRS 6 governs exploration and evaluation asset accounting. It permits companies to capitalize or expense exploration costs and requires impairment testing when indicators suggest reserves may not be commercially viable.
How does unit-of-production depletion work?
Total capitalized costs divide by estimated recoverable reserves. Each period’s extraction multiplied by this rate determines depletion expense. Reserve estimate changes trigger prospective recalculation, not restatement.
What are asset retirement obligations?
AROs represent future decommissioning costs: plugging wells, dismantling platforms, restoring sites. These liabilities must be recognized at present value when the obligation arises, typically when assets are installed.
How do production sharing agreements affect accounting?
PSAs split production between cost oil (recovering contractor investment) and profit oil (shared with government). Revenue recognition depends on whether you bear exploration risk or performance risk under the contract.
What is joint interest billing?
JIB allocates shared project costs among working interest owners in joint ventures. Operators bill non-operators their proportionate share of drilling, completion, and operating expenses based on participation percentages.
Are oil and gas exports subject to UAE VAT?
Hydrocarbon exports outside the GCC qualify for zero-rating. This allows recovery of input VAT on related expenditures while charging 0% on export sales, preserving cash flow for capital-intensive operations.