Table of Contents Table of Contents
Previous Page  15 / 19 Next Page
Basic version Information
Show Menu
Previous Page 15 / 19 Next Page
Page Background

KUWAIT ENERGY PLC

NOTES TO THE CONDENSED SET OF FINANCIAL STATEMENTS

For the six month period ended 30 June 2017

14

7.

PROPERTY PLANT AND EQUIPMENT

Other fixed assets include a carrying amount of US$ 6.4 million (31 December 2016: US$ 6.8 million) in respect of assets

held under finance leases.

The additions to oil and gas assets mainly relate to Siba and Block 9 in Iraq, and include US$ 8.5 million (31 December

2016: US$ 17.0 million) of finance costs on qualifying assets capitalised during the period and US$ 1.9 million (31

December 2016: US$ 2.4 million) of fair value loss on convertible loans capitalised.

In accordance with IAS 36

Impairment of assets

the Company has made an assessment for indicators of impairment and

has not identified any significant indicators. Based on this review, the Group believes no impairment is required at 30

June 2017. In 2016, due to the reduction in the oil price assumption used in estimating the future cash flows, the Group

recorded an impairment loss of US$ 94.3 million, including US$ 54.5 million on the Siba fields in Iraq, US$ 7.2 million and

US$ 32.6 million on the BEA and Abu Sennan fields in Egypt respectively, which has been recognised in the consolidated

income statement in 2016.

A request for arbitration was filed against the Group (pursuant to the ICC Rules of Arbitration) in 2016 under which the

claimant asserted that it has a right to an increased non-controlling share in one of the Group’s key oil and gas assets

(the “Disputed Interest”). The claimant has requested equitable relief in the form of a conveyance of the Disputed

Interest from the Group to the claimant or, alternatively, a cash amount on account of profits or damages. If the claimant

is successful in its claim, the Group could be required to pay damages in this amount or could be required to transfer the

Disputed Interest to the claimant. No amounts have been accrued regarding this claim as the Group believes that on the

basis of external legal advice its position will be vindicated by the arbitral tribunal following a full review of the facts and

evidence, and is firmly committed to vigorously defending the claim.

Oil and

gas assets

Other fixed

assets

Total

Cost

US$ 000’s

US$ 000’s

US$ 000’s

As at 1 January 2016

1,067,280

23,661

1,090,941

Additions

160,957

142

161,099

Disposal

-

(622)

(622)

Transfer from Intangible exploration and evaluation assets

1,485

-

1,485

Transfer to assets held for sale

(194,962)

(103)

(195,065)

As at 31 December 2016

1,034,760

23,078

1,057,838

Additions

56,154

22

56,176

Disposal

-

(47)

(47)

Transfer from Intangible exploration and evaluation assets

1,785

-

1,785

As at 30 June 2017

1,092,699

23,053

1,115,752

Accumulated Depreciation, depletion, amortisation and impairment

As at 1 January 2016

459,657

9,713

469,370

Charge for the year

60,257

2,137

62,394

Impairment

94,337

-

94,337

Disposal

-

(562)

(562)

Transfer to assets held for sale

(77,070)

-

(77,070)

As at 31 December 2016

537,181

11,288

548,469

Charge for the period

29,500

895

30,395

Disposal

-

(47)

(47)

As at 30 June 2017

566,681

12,136

578,817

Carrying amount

As at 30 June 2017

526,018

10,917

536,935

As at 31 December 2016

497,579

11,790

509,369