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PARTEX Financial Statements 2010
PARTEX Financial Statements 2010
(HOLDINGS) CORPORATION
CONSOLIDATED FINANCIAL
STATEMENTS
INTRODUCTION
1. We have audited the consolidated financial statements of Partex Oil and Gas (Holdings) Corporation which
comprise the consolidated statement of financial position as at 31 December, 2009 (showing total as-
sets of USD 1,391,303,680 and total equity of USD 1,181,290,854, including a consolidated net profit of USD
46,398,808), and the consolidated statement of comprehensive income, the cash flows, and the changes in
equity for the year then ended and the corresponding notes to the financial statements.
RESPONSIBILITIES
2. The Board of Directors is responsible for the preparation of the consolidated financial statements in ac-
cordance with the International Financial Reporting Standards (lFRS) as adopted by the European Union, that
present fairly, in all material respects, the consolidated financial position of the Group companies included in
the consolidation, the consolidated results of its operations, the consolidated cash flows, the consolidated
changes in equity and the consolidated statement of comprehensive income, as well as for the adoption of
adequate accounting policies and criteria and maintaining an appropriate system of internal control.
SCOPE
4. We conducted our audit in accordance with the Technical Standards and Guidelines issued by the
Portuguese Institute of Statutory Auditors (“Ordem dos Revisores Oficiais de Contas”), which require that
we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial
statements are free of material misstatements . Accordingly our audit includes:
- verification that the financial statements of the companies included in the consolidation have been
properly audited and the verification, on a test basis, of the documents underlying the figures and
disclosures contained therein, and an assessment of the estimates made, based on judgments and
criteria defined by the Board of Directors, used in preparation of the referred financial statements;
- evaluation of the appropriateness of the accounting principles used and of their disclosure, taking into
account the applicable circumstances;
2|3
- assessing the applicability of the going concern principle; and
- assessing the overall adequacy of the consolidated financial statements presentation.
5. We belive that our audit provides a reasonable basis for our opinion.
OPINION
6. In our opinion, the consolidated financial statements referred to above, present fairly in all material
respects, the consolidated financial position of Partex Oil and Gas (Holdings) Corporation as at 31 December
2009, the consolidated results of its operations, the consolidated cash flows, the consolidated changes
in equity and the consolidated comprehensive income for the year then ended, in accordance with the
International Financial Reporting Standards as adopted by the European Union.
---------------------------------------
KPMG & Associados
Sociedades de Revisores Oficiais de Contas, S.A. (nº189)
Represented by
Ana Cristina Soares Valente Dourado
(ROC nº1011)
PARTEX OIL AND GAS (HOLDINGS) CORPORATION
2009 2008
Notes
USD USD
Oil and gas sales 865,064,423 1,505,361,988
4|5 The financial statements are to be read in conjunction with the notes to and forming part of the financial statements set out on pages 9 to 39.
PARTEX OIL AND GAS (HOLDINGS) CORPORATION
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 31 December, 2009 and 2008
Non-current assets
Intangible assets 11 194,245,790 119,671,209
Property, plant and equipment 12 119,989,551 90,192,410
Financial assets 13 762,255,909 654,208,109
Loans and advances 13 123,357,553 93,845,578
Other non-current receivables 14 2,723,149 2,668,488
Deferred tax assets 21 2,205,571
1,204,777,523 960,585,794
Current assets
Inventories 15 4,368,747 21,093,685
Current tax assets 507,371 226,552
Trade receivables 16 97,003,823 66,866,630
Other receivables 5,984,462 7,954,603
Cash and cash equivalents 17 78,661,754 177,766,285
186,526,157 273,907,755
The financial statements are to be read in conjunction with the notes to and forming part of the financial statements set out on pages 9 to 39.
PARTEX OIL AND GAS (HOLDINGS) CORPORATION
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS EQUITY
for the years ended 31 December, 2009 and 2008
Share
Share premium and Fair value Translation Accumulated
Capital legal reserve reserve differences profit Total
USD USD USD USD USD USD
Balance at 1 January 2008 50,000 34,160 ,685 552,053,514 (1,247,781) 434,815,662 1,019,832,080
6|7 The financial statements are to be read in conjunction with the notes to and forming part of the financial statements set out on pages 9 to 39.
PARTEX OIL AND GAS (HOLDINGS) CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
for the years ended 31 December, 2009 and 2008
2009 2008
USD USD
Cash flows from operating activities
Profit for the year 46,398,808 81,600,363
Adjustment for non cash transactions:
Movement in provisions 3,841,264 701,594
Increase / (decrease) in pension provision (381,795) 260,941
Current tax assets (280,819) (226,552)
Other non-current receivables (54,661) (119,885)
Deferred tax assets (2,205,571)
Deferred tax liabilities 2,523,800
Depreciation and amortisation 15,579,220 8,598,123
Increase in impairment provision 24,080,656 9,869,146
Discounted interest (2,221,498) (2,912,171)
Trade receivables (30,137,193) 64,442,673
Other receivables 1,970,141 5,955,763
Inventories 16,724,938 (18,596,051)
Trade payables (5,851,082) (16,035,446)
Calouste Gulbenkian Foundation payable 21,931 (1,340,439)
Other payables 26,128,619 (3,824,941)
96,136,758 128,373,118
(167,754,033) (88,620,498)
The financial statements are to be read in conjunction with the notes to and forming part of the financial statements set out on pages 9 to 39.
PARTEX OIL AND GAS (HOLDINGS) CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the years ended 31 December, 2009 and 2008
8|9
Control is presumed to exist where more than one half of a subsidiary’s voting power is controlled by the
Corporation, or the Corporation is able to prescribe directly or indirectly the financial and operating policies
of an entity, or control the removal or appointment of a majority of an entity’s board of directors, even if its
shareholding is equal to or less than 50%.
Subsidiaries are fully consolidated from the date on which control is transferred to the Corporation until the
date that control ceases.
All intercompany balances and transactions have been eliminated.
Accumulated losses of a subsidiary attributable to minority interest, which exceed the equity of the sub-
sidiary attributable to the minority interest, are attributed to the Corporation and is taken to the income
statement when incurred. If the subsidiary subsequently reports profits, these profits are recognised by
the Corporation until the losses attributable to the minority interest, previously recognised have been
recovered.
Jointly controlled entities are entities in which the control is established by agreement. The consolidated
financial statements include the Corporation’s share of assets, liabilities, income and expenses on a line-
–by-line basis from the date on which joint control is established until it ceases.
The consolidated financial statements of Partex Oil and Gas (Holdings) Corporation include the financial
statements of the following subsidiary companies, all wholly owned.
Country of
Incorporation
Activity Capital
Participations and Explorations Corporation Panama USD 2,800 a
Partex Services Portugal - Serviços para a Indústria Petrolífera, SA Portugal EUR 50,000 b
Exploration expenditure
Exploration expenditure is initially capitalized as an intangible asset until the drilling of the well is com-
plete and the results have been evaluated. If hydrocarbons are not found, the exploration expenditure is
written off as a dry hole. If hydrocarbons are found and, subject to further appraisal activity which may
include the drilling of further wells, are likely to be capable of commercial development, the costs continue
to be carried as an intangible asset. All such carried costs are subject to management review at least once
a year 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. When proved reserves of hydrocarbons are determined and
development is sanctioned, the respective expenditure is transferred to property, plant and equipment.
Concession costs
Concession acquisition costs are capitalized within intangible assets and are amortized over the useful life
of the concession on a straight line basis, which varies from 17 to 33 years.
10 | 11
individually, applying depreciation rates reflecting their anticipated useful lives. The cost of replacing major
parts or components of property, plant and equipment items is capitalised and the replaced part is retired.
Any gain or loss arising is recognised in the income statement when the asset is retired.
Subsequent costs are recognized as separate assets when it is probable that future economic benefits
associated with the item will flow to the Corporation and the cost of the item can be measured reliably.
All repair and maintenance costs are charged to the income statement during the financial period in which
they are incurred.
Depreciation is calculated using the straight line method over the assets estimated useful life as follows:
Depreciation is charged to the income statement on a straight line basis over the estimated useful life of
the individual asset or a unit of production basis depending on the type of asset.
Changes in estimates, which affect unit of production calculations, are taken into account for the year of
the change and for future years.
When there is an indication that an asset may be impaired, lAS 36 requires that its recoverable amount be
estimated and an impairment loss recognised when the net book value of the asset exceeds its recover-
able amounts. Impairment losses are recognised in the income statement.
Classification
The Corporation classifies its financial assets at initial recognition as available-for-sale financial assets.
These financial assets are non-derivative financial assets (i) intended to be held for an indefinite period
of time, (ii) designated as available-for-sale at initial recognition or (iii) that are not classified in the other
categories referred to above.
Subsequent measurement
Available-for-sale financial assets are subsequently carried at fair value. However, gains and losses aris-
ing from changes in their fair value are recognised directly in the shareholders’ equity, until the financial
assets are derecognised or impaired, at which time the cumulative gain or loss previously recognised in
the shareholders’ equity is recognised in the income statement. Foreign exchange differences arising
from equity investments classified as available-for-sale are also recognised in shareholders’ equity, while
foreign exchange differences arising from debt investments are recognised in the income statement.
Interest, calculated using the effective interest rate method, and dividends are recognised in the income
statement.
For unlisted securities the Corporation establishes fair value by using (i) valuation techniques, including the
use of recent arm’s length transactions and discounted cash flow analysis and (ii) valuation assumptions
based on market information.
Fair value in unquoted oil and gas companies was determined at 31 December 2009 based on a valuation
made by an investment bank. The valuation reflects the net present value of future estimated cash flows.
Impairment
The Corporation assesses periodically whether there is objective evidence that a financial asset or group
of financial assets is impaired. If there is objective evidence of impairment, the recoverable amount of the
asset is determined and impairment losses are recognised through the income statement.
A financial asset or a group of financial assets is impaired if there is objective evidence of impairment as a
result of one or more events that occurred after their initial recognition , such as: (i) for equity securities,
a significant or prolonged decline in the fair value of the security below its cost, and (ii) for debt securi-
ties, when that event (or events) has an impact on the estimated future cash flows of the financial asset or
group of financial assets, that can be reliably estimated .
If there is objective evidence that an impairment loss on available-for-sale financial assets has been in-
curred, the cumulative loss recognised in the shareholders’ equity - measured as the difference between
the acquisition cost and the current fair value, less any impairment loss on that financial asset previously
recognised in the income statement - is taken to the income statement. If, in a subsequent period, the
amount of the impairment loss decreases, the previously recognised impairment loss is reversed through
the income statement up to the acquisition cost if the increase is objectively related to an event occurring
after the impairment loss was recognised, except in relation to equity instruments, in which case the re-
versal is recognised in shareholders’ equity.
12 | 13
2.12 - Revenue recognition
In relation to oil and gas sales, revenue is recognised when significant risks and rewards of ownership have
been transferred to the buyer, and no significant uncertainties remain regarding the determination of con-
sideration or associated costs.
Interest, dividends, royalties and rewards arising from the group’s resources are recognised when it is
probable that the economic benefits associated with the transaction will flow to the group and the revenue
can be measured reliably. Interest income is recognised as it accrues unless collectability is in doubt.
Royalty and oil income is recognised on an accrual basis in accordance with the substance of the relevant
agreement.
2.15 - Inventories
Inventories are stated at the lower of cost and net realizable value. Cost of crude oil is determined using the
first-in first-out cost method. Crude oil inventory consists of amounts in pipelines, tanks and stock held by
transportation companies, where the right of ownership has not been transferred to the customers. The
cost of crude oil inventory includes all direct costs and an appropriate share of overheads. Cost of other
inventories is determined at cost using the weighted average cost method. Net realizable value is the esti-
mated selling price in the ordinary course of business, less the cost of completion and selling expenses.
2.16 - Pensions
The Corporation operates an unfunded defined benefits pension scheme for certain staff. Provision is made
in the accounts for the Corporation’s obligations under the scheme, on the basis of an actuarial valuation.
The provision represents the estimated present value of benefits to be paid to existing pensioners and of
future benefits payable to current employees in respect of service up to the balance sheet date. Actuarial
gains and losses resulting from i) differences between financial and actuarial assumptions used and real
values obtained and ii) changes in the actuarial assumptions are deferred and are adjusted in future years
using the corridor method.
The pension liability is calculated annually at the balance sheet date, using the projected unit credit
method, by qualified independent actuaries. The discount rate used in the calculation is determined by
reference to interest rates of high-quality corporate bonds that are denominated in the currency in which
the benefits will be paid and that have terms to maturity approximating to the terms of the related pen-
sion liabilities.
The annual costs of the scheme, the net total interest and current service costs are charged to the
Statement of Income.
Actuarial gains and losses as calculated for the year have been recorded as an asset or liability and are
charged to income using the “corridor” method.
This method requires accumulated actuarial gains and losses at the beginning of the year that are greater
than 10% of the total liabilities at the beginning of the year, be recognised as a gain or loss to be charged
to income in the current year. Accumulated actuarial gains and losses at the beginning of the year that are
within the above limits (the corridor) are recorded as deferred income or costs and are not amortized.
2.17 - Provisions
Provisions are recognised when the Corporation has a legal or constructive obligation, and it is prob-
able that a cost will be incurred as a result of past events and a reasonable estimate can be made of the
liability.
Provisions for asset retirement are measured based on current requirements, technology and price levels
and the present value is calculated using amounts discounted over the useful economic life of the assets.
The liability is recognised (together with a corresponding amount as part of the related property, plant
and equipment) once an obligation crystallizes in the period when a reasonable estimate can be made.
The effects of changes resulting from revisions to the timing or the amount of the original estimate of
the provision are reflected through adjustments to the carrying amount of the related property, plant and
equipment.
14 | 15
the estimated future cash flows of the assets. This determination requires judgement based on all avail-
able relevant information, including the normal volatility of the financial instruments prices. Considering
the high volatility of the markets, the Corporation has considered the following parameters when assess-
ing the existence of impairment losses:
(i) Equity securities: declines in market value that are significant in relation to the acquisition cost or mar-
ket value below the acquisition cost for a period longer than twelve-months;
(ii) Debt securities: objective evidence of events that have an impact on the estimated future cash flows of
these assets.
In addition, valuations are generally obtained through market quotation or valuation models that may re-
quire assumptions or judgement in making estimates of fair value. Alternative methodologies and the use
of different assumptions and estimates could result in a higher level of impairment losses recognised with
a consequent impact in the income statement of the Corporation
c) Income taxes
The Group is subject to income taxes in certain jurisdictions. Significant interpretation and estimates are
required in determining the group income taxes. There are many transactions and calculations for which
the ultimate tax determination is uncertain during the ordinary course of business.
Different interpretations and estimates would result in a different level of income taxes both current and
deferred, recognised in the period.
e) Environmental liabilities
The Corporation makes judgements and estimates to calculate provIsIons for environmental matters,
based on current information relating to expected costs and plans. Such costs can vary due to changes
in legislation and regulations relating to a specific location. Any change in the circumstances relating to
such provisions, as well as in the legislation and regulations can significantly affect the provisions for
such matters.
3_OTHER OPERATING INCOME
2009 2008
USD USD
Services revenue 5,789,911 6,300,113
29,092,835 51,536,358
4_ADMINISTRATIVE EXPENSES
2009 2008
USD USD
Personnel costs 14,492,734 13,942,773
22,044,339 20,995,934
18,727,374 18,205,741
2009 2008
USD USD
Directors 248,980 491,049
14,492,734 13,942,773
2009 2008
Directors 6 5
Staff 73 72
Staff at 31 December 79 77
16 | 17
5_DEPRECIATION AND AMORTISATION
2009 2008
USD USD
Depreciation of property, plant and equipment 7,775,817 5,739,724
15,579,220 8,598,123
6_IMPAIRMENT LOSSES
2009 2008
USD USD
Write-off of dry wells in Portugal 1,572,221
24,080,656 9,869,146
2009 2008
USD USD
Other costs and contributions 214,109 605,189
214,109 605,198
2009 2008
USD USD
Income arising from the discounting
2,221,498 2,912,171
of advances to present values
Interest on bank deposits 828,675 7,470,597
3,654,587 10,744,917
The rate of interest received on the average balances was:
2009 2008
% %
Bank deposits 0,7 4,6
2009 2008
USD USD
SGAM 4D Global Energy Fund plc 106,173 891,148
106,173 891,148
In 2008 and 2009, SGAM 4D repaid the capital invested in the fund together with an excess arising from the
sale of investments made by the fund.
18 | 19
11_INTANGIBLE ASSETS
Other
Exploration Oil Concession intangible
2009 rights Exploration Rights Software assets Total
Cost USD USD USD USD USD USD
Amortisation
Net balance at
After successful oil exploration activities have been completed and production of oil starts the investments
made during the exploration phase are re-stated from intangible assets to tangible fixed assets.
Exploration rights refer to the costs of exploration licenses in Brazil, Angola and Kazakhstan, which are
being amortized over the remaining life of the license.
Oil exploration costs refer to drilling and other operational costs in oil concessions in Brazil, Algeria, Angola
and Portugal.
Concession rights amounting to USD 78,125,000 refer to the payments made to the Abu Dhabi National Oil
Company (“ADNOC”) for the renovation of the GASCO agreement for the production of gas in the Emirate of
Abu Dhabi, as mentioned in note 23, These payments have been capitalized in intangible assets and are
amortized on straight line basis over the lifetime of the agreement.
Unsuccessful well drilling costs or cost for dry wells are impaired/written-off as they occur.
Furniture,
fixtures Machinery, Production Other
and office tools, and wells and fixed
equipment equipment facilities Vehicles assets Total
Cost USD USD USD USD USD USD
31 December 2007 1,883,129 1,747,185 71,904,631 681,494 548,545 76,764,984
Additions 102,950 40,668 29,495,852 81,712 1,544 29,722,726
Disposals (299) (67,618) (33,124) (101,041)
Translation adjustments (169,540) (24,100) (3,989) (197,629)
Transfers 1,376,211 (1,525,941) 5,120,926 37,127 121,947 5,130,270
31 December 2008 3,192,451 261,912 106,521,409 708,615 634,923 111,319,310
Additions 579,108 33,095 28,365,522 257,081 106,144 29,340,950
Disposals (1,293,683) (150,675) (175) (1,444,533)
Translation adjustments 161,098 18,882 16,587 196,567
Transfers (38,688) 8,212,073 8,173,385
31 December 2009 2,600,286 295,007 143,099,004 833,903 757,479 147,585,679
Depreciation
31 December 2007 1,325,716 1,656,540 6,584,350 407,597 511,339 10,485,542
Additions 209,414 22,547 5,292,683 143,560 71,520 5,739,724
Disposals (298) (50,714) (33,124) (84,136)
Translation adjustments (127,712) (11,625) (5,163) (144,500)
Transfers 1,542,541 (1,552,265) 5,137,466 47,752 (45,224) 5,130,270
31 December 2008 2,949,661 126,822 17,014,499 536,570 499,348 21,126,900
Additions 283,745 24,270 7,190,023 163,631 114,148 7,775,817
Disposals (1,293,683) (150,675) (175) (1,444,533)
Translation adjustments 123,016 16,094 16,786 155,896
Transfers (17,952) (17,952)
31 December 2009 2,044,787 151,092 24,204,522 565,620 630,107 27,596,128
Net balance at
31 December 2008 242,790 135,090 89,506,910 172,045 135,575 90,192,410
31 December 2009 555,499 143,915 118,894,482 268,283 127,372 119,989,551
20 | 21
Production wells and facilities relates principally to the Dunga field in Kazakhstan where the group has
invested jointly with Maersk and Oman Oil Company Ltd, and the group’s proportional share of Mukhaizna
assets, an unlisted joint venture company in the Sultanate of Oman,
The group has production facilities in Brazil and exploration projects in Brazil, onshore and offshore and
offshore Portugal and Angola,
In 2009 the Corporation has booked a provision for abandonment of wells, dismantling of facilities, insta–
llations and to restore the exploration sites, in the amount of USD 2,346,822 (see also note 20).
13.1 The unlisted financial investments in energy companies and Investment funds are made up as follows:
2009
Fair value Balance Sheet
Cost reserve Impairment amount
USD USD USD USD
Equities
Investment funds
of wich
Level 1 127,055,910
Level 3 635,199,999
762,255,909
2008
of wich
Level 1 101,108,110
Level 3 553,099,999
654,208,109
Participations in unquoted energy companies have been valued at 31 December 2009 by an investment
bank, at fair value as required by lAS 39 see note 2.8.
As referred in IFRS 7, financial assets held for trading and available for sale are valued in accordance with
the following fair value measurement levels:
Level 1: financial instruments measured in accordance with quoted market prices or providers.
Level 2: financial instruments measured in accordance with internal valuation techniques based on obser–
vable market inputs.
Level 3: financial instruments measured in accordance with valuation techniques based on inputs not
based on observable data that have significant impact in the instruments valuation.
At 31 December 2008 the historical cost of the investment in GASCO of USD 8,448,000 was written down
to USD 2,900,000, the fair value of the investment for the remaining three months of the contracts. The
contract was renewed in March 2009 and as a result the fair value was reassessed at USD 5,900,000 at 31
December 2009
22 | 23
13.2_LOANS AND ADVANCES
2009 2008
USD USD
Loans and Advances
123,357,553 93,845,578
The loans to operating companies are shown at their discounted present value. The loans bear no interest
and have no agreed term. The calculation of the present value assumes:
2009 2008
Maturity
USD USD
Up to 12 months 1,962,353
123,357,553 93,845,578
15_INVENTORIES
2009 2008
USD USD
Raw materials and supplies 4,188,719 3,685,502
4,368,747 21,093,685
In 2008 Inventories relate mainly to one shipment of oil which started lifting in 2008 and transited to
2009. In addition the group holds working stores of spare parts. The stocks are held at the lower of cost
and market value.
16_TRADE RECEIVABLES AND PAYABLES
Trade receivables amounting to USD 97,003,823 (2008: USD 66,866,630) and payables in the amount of USD
93,532,623 (2008: USD 99,383,705) relate to balances receivable from clients and payable for oil and gas
which arise from the group’s normal business.
18_SHARE CAPITAL
The share capital of the Corporation, issued and fully paid, is USD 50,000 divided into 50,000 shares of USD
1 each.
The interim dividend approved in 2009 for payment in 2010 was USD 20,000,000 (2008: the proposed divi-
dend was USD 42,500,000) - USD 400 per share (2008: USD 850) .
In March 2010 a final dividend of USD 3,000,000 was approved by the board for payment in 2010.
1,181,240,854 1,067,245,458
The legal reserve and share premium accounts may only be used to increase the share capital of the sub-
sidiaries concerned and are not available for distribution.
The fair value reserve is set out in note 13 and is not available for distribution.
Movement on the fair value reserve is as follows:
2009 2008
USD USD
Balance at the beginning of the year 555,678,197 552,053,514
24 | 25
The translation differences arise on consolidation and relate to the differences on certain subsidiary com-
panies’ equity and reserves which are recorded in foreign currencies.
The retained earnings are unencumbered and free for distribution.
Currencies used in the consolidation are as follows:
2009 2008
20_PROVISIONS
2009 2008
USD USD
Pension provision 3,217,788 3,253,855
8,748,408 6,221,468
Pension Provision
The Corporation had undertaken to pay pensions to certain employees on their retirement.
The number of participants in the pension plan is:
2009 2008
Active 4 4
Retired 5 5
9 9
The assumptions used in the calculation of the pension liability are as follows:
2009 2008
In accordance with IAS 19, the Corporation’s pension provision as at 31 December 2009 and 2008 is analysed
as follows:
2009 2008
Assets/liabilities recognised in the balance sheet
USD USD
Defined benefit obligation 2,880,951 3,262,746
2009 2008
USD USD
Balance at beginning of year 3,262,746 3,818,666
2,880,951 3,262,746
The Corporation has made full provision for the estimated pension liability based on an actuarial study
prepared as at 31 December 2009.
26 | 27
The descrease in the provision for pensions is as follows:
2009 2008
USD USD
Cost of current services 80,559 84,465
(116,255) (221,854)
The movement on the balance sheet (other receivables) related to pensions is as follows:
2009 2008
USD USD
Opening balance 1 January 8,891 278,716
The evolution of the defined obligations in the past 5 years is presented as follows:
2009 2008
USD USD
Capitalized in tangible fixed assets 2,346,822
2009 2008
USD USD
Opening balance 1 January 2,457,613 2,374,859
Other provisions
The movement in 2009 on other provisions was as follows:
2009 2008
USD USD
Balance at 31 December 510,000
Expected maturity
Current 510,000
Settlement of non-current provisions is expected after more than 12 months from the balance sheet date,
whereas current provisions are expected to be settled within 12 months from the balance sheet date.
21_DEFERRED TAXES
During 2009 timing differences between the statutory financial statements and the consolidated financial
statements were identified in relation to the group’s operations in Brazil and Kazakhstan resulting in de-
ferred tax assets as well as deferred tax liabilities as stated below:
28 | 29
The changes in deferred tax assets were recognised as follows:
2009 2008
USD USD
Deferred tax
Deferred tax assets Net Net
liabilities
Tax losses carried forward 13,063,264 13,063,264
Exchange variation on loans (8,714,186) (8,714,186)
Provision for asset retirement
123,136 123,136
obligations
Property, plant and equipment (4,789,535) (4,789,535)
Intangible assets (908) (908)
2009 2008
USD USD
Balance at the beginning of the year
Recognised in the income statement 329,695
Exchange differences (11,466)
2009 2008
USD USD
Current income tax (193,552)
The available tax losses for the group’s operations in Brazil, Kazakhstan and Portugal may be utilized as
stated below:
2009 2008
Tax losses year for deduction limit:
USD USD
2009
2010
2011
2012 3,708 3,778
2013 205,498 209,364
2014 1,478,491
1,687,697 213,142
22_CALOUSTE GULBENKIAN FOUNDATION PAYABLE
2009 2008
USD USD
Dividend payable 20,000,000 42,500,000
20,081,526 42,559,595
2009 2008
USD USD
GASCO signature bonus 38,214,101
41,364,538 1,400,011
The Gasco signature bonus in the amount of USD 38,214,101 refers to the payments that will be made
to GASCO in 2011 and 2012 in accordance with the Joint Venture Agreement. The amount is presented at
amortized cost.
On March 31 , 2009 the Corporation signed the renewal of the Joint Venture Agreement for the Abu Dhabi Gas
Industries Ltd. (GASCO) with Abu Dhabi National Oil Company (ADNOC), Shell Abu Dhabi BV. and Total S.A. , for
an additional 20 years, backdated to 1st October 2008. The original Joint Venture Agreement was signed in
1978, for 30 years.
With the renewal of the Joint Venture Agreement, the Corporation agreed to pay USD 78,125,000 to ADNOC.
An amount of USD 19,531,250 has been paid on 30 April 2009. The remainder of the signature bonus is
payable in the following instalments and on the following dates:
USD 19,531,250 on 31 March 2010
USD 19,531,250 on 31 March 2011
USD 19,531,250 on 31 March 2012.
The current share of the payment to ADNOC is shown in current liabilities, as mentioned in note 24.
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24_CURRENT LIABILITIES - OTHER PAYABLES
2009 2008
USD USD
GASCO signature bonus (current share) 19,531,250
43,761,931 17,633,312
The GASCO signature bonus (current share) in the amount of USD 19,531,250 refers to the payment that will
be made to ADNOC in March 2010, as established in the Joint Venture Agreement, as mentioned in note 23.
25_CONTINGENT LIABILITIES
Banks have given performance guarantees to the value of USD 35,494,473 (2008: USD 21,466,222) that the
group will carry out undertakings given in relation to the Brazilian and Angolan concessions.
The group has given a guarantee to the government of the Republic of Kazakhstan that its subsidiary,
Partex (Kazakhstan) Corporation, will properly execute its obligations in relation to the Dunga concession.
27_RISK MANAGEMENT
The group operates in an industry which is traditionally considered to be risky compared to other economic
areas. The group is managed so as to obtain a reasonable balance between risk and expected reward.
Operational risk:
The Partex group is an active oil and gas exploration company and therefore runs the risk that its explora-
tion activity may be unsuccessful.
Market risk:
The group sells most of its production on annual sales contracts thus reducing its short term exposure to
price fluctuations.
Credit risk:
Credit risk is that a customer or counterparty fails to perform or to pay amounts due causing financial loss
to the group. The group carefully assesses the quality of its counterparities when entering into business
relationships with them.
Liquidity risk:
Liquidity risk is the risk that suitable sources of funding for group business activities may not be available.
The group believes that it has access to sufficient sources of funding to meet current commitments.
At 31 December 2009 and 2008 the exposure to liquidity risk is as follows:
2009
Up to 3 3-6 6-12 1-5 More than 5 Not
months months months years years determined
Financial assets 75,276,093 686,979,816
Loans and advances 15,582,792 107,774,761
Other non-current
2,723,149
receivables
Cash and cash equivalents 78,661,754
2008
Up to 3 3-6 6-12 1-5 More than 5 Not
months Months Months Years years determined
Financial assets 138,008,660 516,199,449
Loans and advances 1,962,353 8,589,099 83,294,126
Other non-current
2,668,488
receivables
Cash and cash equivalents 177,766,285
2009
USD EUR
2008
USD EUR
Exchange differences recorded during 2009 amounted to gains of USD 24,760,703 (2008 losses of USD
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28_RECENTLY ISSUED PRONOUNCEMENTS
Recently issued pronouncements already adopted by the Group
In the preparation of the consolidated financial statements for the year ended 31 December 2009, the
Corporation adopted the following standards and interpretations that are effective since 1 January 2009:
lAS 32 - Financial Instruments: presentation - Puttable financial instruments and obligations arising on
liquidation
International Accounting Standards Board (lASB) issued, in February 2008, an amendment to lAS 32
Financial Instruments: Presentation - Puttable financial instruments and obligations arising on liquidation,
effective from 1 January 2009. This amendment addresses the balance sheet classification of puttable fi-
nancial instruments and obligations arising only on liquidation. Under the current requirements of lAS 32,
if an issuer can be required to pay cash or another financial asset in return for redeeming or repurchasing
a financial instrument, the instrument is classified as a financial liability. As a result of the amendments,
some financial instruments that currently meet the definition of a financial liability will be classified as
equity if they have certain features, namely (i) they represent the last residual interest in the net assets
of the entity, (ii) the instrument is in the class of instruments that is subordinate to all other classes of in-
struments of the entity and (iii) all financial instruments in that class of instruments that is subordinate to
have identical features. The Board also amended lAS 1 Presentation of Financial Statements to add new
disclosure requirements relating to puttable instruments and obligations arising on liquidation.
The adoption of this standard had no impact on the Corporation’s financial statements.
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- the hedging instrument may be held by any entity within the Group except the foreign operation that is
being hedged; and
- on disposal of a hedged operation, the cumulative gain or loss on the hedging instrument that was deter-
mined to be effective is reclassified to the income statement.
This interpretation allows an entity that uses the step-by-step method of consolidation, an accounting
policy choice to determine the cumulative currency translation adjustment that is reclassified to the in-
come statement on disposal of a net investment as if the direct method of consolidation had been used.
This interpretation should be applied prospectively.
The adoption of this standard had no impact on the Corporation’s financial statements.
IFRS 1 (Amendment) - First-time adoption of IFRS and lAS 27 - Consolidated and separate financial
statements
The amendments to IFRS 1 First-time adoption of IFR’ and lAS 27, Consolidated and separate financial
statements are effective for periods beginning on or after 1 July 2009.
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These amendments allow first-time adopters to use a deemed cost of either fair value or the carrying
amount under previous accounting practice to measure the initial cost of investments in subsidiaries,
jointly controlled entities and associates in the separate financial statements.
The Corporation does not expect any impact on its financial statements from the adoption of these
amendments.
IFRS 3 (revised) Business Combination and lAS 27 (amendment) Consolidate and Separate Financial
Statements
The International Accounting Standards Board (IASB) issued in January 2008, IFRS 3 (revised) Business
Combination and an amendment to lAS 27 Consolidated and Separate Financial Statements.
The main changes the revised IFRS 3 and amended lAS 27 will make to existing requirements or practice
relate to (i) partial acquisitions, whereby non-controlling interests (previously named minority interest)
can be measured either at fair value (implying full goodwill recognition against non-controlling interests) or
at their proportionate interest in the fair value of the net identifiable assets acquired (which is the original
IFRS 3 requirement); (ii) step acquisitions whereby, upon acquisition of a subsidiary and in determining
the resulting goodwill, any investment in the business held before the acquisition is measured at fair
value against the income statement; (iii) acquisition-related costs, which must generally, be recognized
as expenses (rather than included in goodwill); (iv) contingent consideration which must be recognized
and measured at fair value at the acquisition date, subsequent changes in fair value being recognized in
the income statement (rather than by adjusting goodwill); and (v) changes in a parent’s ownership inter-
est in a subsidiary that do not result in the loss of control which are required to be accounted for as equity
transactions.
Additionally, lAS 27 was amended to require that an entity attributes a share of the accumulated loss of
a subsidiary to the non-controlling interests, even if this results in the non-controlling interests having
a deficit balance, and to specify that, upon losing control of a subsidiary, an entity measures any non-
-controlling interests retained in the former subsidiary at its fair value, determined at the date the control
is lost.
The IFRS 3 (revised) and the amendment to lAS 27 will be effective from 1 July, 2009.
The Corporation does not expect any impact on its financial statements from the adoption of these
amendments.
lAS 39 (amendment)- Financial Instruments: recognition and measurement - Eligible hedged items
The International Accounting Standards Board (lASB) issued an amendment to lAS 39 Financial Instruments:
recognition and measurement - Eligible hedged items, which is mandatory for periods beginning on or
after 1 July 2009.
This amendment clarifies how the principles that determine whether a hedged risk or portion of cash flows
is eligible for designation should be applied in particular situations.
The Corporation is evaluating the impact of adopting this interpretation on its financial statements.
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