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KUWAIT ENERGY PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 December 2017
44
26.
TRADE AND OTHER PAYABLES
2017
2016
US$ 000’s
US$ 000’s
Trade payables and accruals
108,303
118,514
Advance against farm-out of working interest (note 13)
-
3,500
Joint venture partners payables
2,963
7,568
Accrued interest payable
10,477
10,313
Salaries and bonus payables
2,315
4,473
124,058
144,368
Trade creditors and accruals principally comprise amounts outstanding for trade purchases and ongoing costs. The credit
period for trade purchases ranges between 30 and 150 days. No interest is charged on the overdue trade payables. The
Group has financial risk management policies in place to ensure that all payables are paid within the pre-agreed credit
terms.
The directors consider that the carrying amount of trade payables approximates to their fair value due to their short
term nature
.
27.
CRUDE OIL PREPAYMENT
In December 2016, the Group signed an agreement for a secured crude oil prepayment facility of up to US$ 100 million
(the “Prepayment Agreement”), repayable principally by the delivery of the Group’s crude oil entitlement from Block 9,
Iraq. As of 31 December 2017, the Group had drawn-down US$ 80 million (2016; US$ 40 million) from the facility
classified as a short-term prepayment. Under the terms of the agreement interest is accrued and settled on semi-
annually basis.
Movement in Crude oil prepayment is as below:
2017
2016
US$ 000’s
US$ 000’s
As at 1 January
40,000
-
Received
40,000
40,000
Settled
(42,531)
-
As at 31 December
37,469
40,000
The agreement stipulates a pricing calculation with reference to the terms of Block 9 export oil sales agreement, and
prepayments are settled through physical deliveries of crude oil.
28.
CONTINGENT LIABILITIES AND CAPITAL COMMITMENTS
2017
2016
US$ 000’s
US$ 000’s
a)
Contingent liabilities - letters of guarantee
-
4,000
b)
Capital commitments
26,015
43,106
c)
Agreement to purchase shares (note 33b)
5,362
6,176
Capital commitments include committed seismic expenditures, exploration and development well drilling as specified
in the exploration and development licenses.