Audit Readiness and Internal Controls for Oil and Gas Companies in UAE

Where oil and gas company records usually go wrong

Contracts, rate cards and service tickets

Service companies in the energy sector invoice from rate cards agreed in master service agreements. The invoice should trace to a signed work order and a daily field ticket or timesheet. It should also trace to the rate card in force on the date of work. When any one of these is missing, the client may reject the invoice, so keep them as a set per job.

Track invoices by client approval status: submitted, under review, approved and paid. Long approval cycles are normal in this sector. Pair the receivables ageing with a note on where each large invoice sits in the client's process.

Mobilisation, equipment and consumables

Mobilisation costs for people and equipment can be significant. Decide whether they are recovered through a separate fee or built into rates, and record them accordingly. Equipment on site should be listed with serial numbers, hire or ownership status, calibration and inspection dates.

Consumables and spares held at base or in the field should be counted regularly. Items issued to a job should be charged to that job through a signed issue note.

Equipment returned from a client site should be inspected and logged. Record any repair cost against the job that caused it, or against general maintenance if the wear was normal.

Vendor registration and compliance paperwork

Operators often require suppliers to hold current approvals, insurance certificates and safety records. Keep them in a register with expiry dates, because a lapsed document can hold up payment on valid work. Payments to subcontractors and manpower suppliers should be supported by contracts, invoices and proof of payment.

For foreign currency contracts, note the currency of the contract and the exchange rate used for each invoice. Also note the rate used to revalue balances at year-end.

Add a column in the register for the client contact who approved each document. Renewals can then be chased quickly when a date approaches.

A checklist for your file

• Contract register with pricing currency and milestones
• Revenue and cost to complete schedules
• Equipment register with location and tag
• Receivables ageing by client
• Purchase approvals for high value items
• Corporate tax computation workings

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