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KUWAIT ENERGY PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 December 2015
28
15.
INVESTMENT IN JOINT VENTURE
The Group owns a
20% equity interest in Medco L.L.C. (“Medco”), a jointly controlled entity incorporated in Oman
.
Medco is the operator of the Karim Small fields (KSF) in Oman and has a 75% working interest in production. In
accordance with IFRS 11 Joint Arrangements, the Group has determined its interest in Medco to be a Joint Venture and
accordingly accounts for it using the equity method.
On 28 April 2015, Medco signed a new 25 year service contract for KSF, commencing from 1 June 2015. The Group
has provided a bank guarantee of USD 7.5 million to perform work obligations under the new service contract (see note
19).
Movement in investment in Joint Venture
2015
2014
USD 000’s
USD 000’s
At 1 January
8,138
10,598
Additional investment during the year
945
-
Share of profit of Medco
445
1,040
Dividend received from Medco
(4,000)
(3,500)
At 31 December
5,528
8,138
16.
OTHER NON-CURRENT ASSETS
2015
2014
USD 000’s
USD 000’s
Decommissioning and retirement benefit obligation fund
4,841
5,141
Advances to contractors
17,913
-
22,754
5,141
Decommissioning and retirement benefit obligation fund held in an escrow account to settle liabilities of environmental
restoration and end of service benefit obligation of Block 5 in Yemen.
17.
INVENTORIES
2015
2014
USD 000’s
USD 000’s
Crude oil
1,640
3,433
Spare parts, materials and supplies
22,771
18,209
24,411
21,642
Crude oil is measured at net realisable value. Spare parts, materials and supplies are used in operations and are not held
for re-sale.
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