Болсуновская Л.М., Абрамова Р.Н., Матвеенко И.А. (ред.) Petroleum engineering. Teachers book. Нефтегазовое дело. Книга для учителя
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Exercise 7. Quick Reading.
1. Does the first sentence of the text have the same meaning as the title? –
Yes.
2. What problem is discussed? – The problem of diverse fiscal systems,
which make companies work more complicated.
3. Is it a local or a global issue? – Yes, it is.
4. What kinds of fiscal systems are mentioned in the text? – Royalty/tax
systems, contractual systems, production sharing contract, service or
risk service agreements.
Exercise 8. Study the figures below to be able to speak about.
1. The difference between definitions of reserves “booked” (fig. 1) The
main difference is that in the Royalty/tax definition we find “Net-
revenue-interest” as an extra member of the equation, and in the
Production sharing definition, we find that “Government profit oil” is
subtracted from the equation.
2. Classification of petroleum fiscal systems (fig. 2) consists of
concessionary royalty/tax system and contractual system which is
subdivided into service contracts and production sharing contracts.
Exercise 9. Discuss.
Ss share their ideas and information with the other group mates. This task
may be given as a homework, so Ss will be able to find out some
interesting facts.
Exercise 10. Answer the following questions.
1. What do auditors do? – They usually review the financial records of a
company.
2. Audits are planned actions, aren’t they? – Yes, as they are usually
performed at fixed intervals – quarterly, semiannually or annually.
3. What did the presence of an auditor in a company suggest in the
past? – It suggested that a company was having financial difficulties
or that irregularities had been discovered in the records.
4. What is auditors’ duty? – Their duty is to reduce the possibility of
misappropriation, to identify mistakes or detect fraudulent transactions.
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5. In what form do the auditors make their report? – Auditors make their
reports in written form.
6. What is the difference between internal and independent auditors? –
Internal auditors maintain a continuous internal audit by their own
accounting departments. Independent auditors are employed on a part-
time basis.
Exercise 11. Decide whether the statements are true or false.
1. F – Auditors are usually independent certified accountants who
review the financial records of a company.
2. F – They are usually performed at fixed intervals – quarterly,
semiannually or annually.
3. T
4. T
5. T
Exercise 12. Read the text and find information on:
1. The name of the auditing company – KPMG Limited. The name of the
audited company – ОАО АК Transneft and its subsidiaries.
2. The reason of Transneft’s changing its auditor – because it expressed
an unqualified opinion on those statements.
3. The names of the documents to be complied with while conducting
audit – International Standards on Auditing as issued by the
International Federation of Accountants
4. Characteristics of an emerging market – the existence of a currency
that is not freely convertible in most countries outside the Russian
Federation, restrictive currency controls, and relatively high inflation.
Exercise 13. Translate the terms into Russian.
Assets
Активы
Non-current assets
Внеоборотные активы
Intangible assets
Нематериальные активы
Property, plant and
equipment, net
Cобственность, здания и оборудование,
недвижимость и оборудование
Investments
Капиталовложение
Available-for sale
Доступные для продажи
Total non-current assets
Суммарные внеоборотные активы
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Current assets
Оборотные активы
Inventories, net
Запасы
Receivables and
prepayments, net
Дебиторская задолженность и
предоплата
VAT assets
НДС
Prepaid profit tax
Предоплата по налогу на прибыль
Available-for-sale short-
term
investments
Доступные для продажи краткосрочные
капиталовложения
Cash and cash equivalents
Денежные средства и их эквиваленты
Total current assets
Суммарные оборотные активы
Total assets
Суммарные активы
Shareholders’ Equity,
Minority
interests and liabilities
Собственный капитал, доля
меньшинства и денежные обязательства
Shareholders’ equity
Собственный капитал
Share capital
Акционерный капитал
Retained earnings
Нераспределенная прибыль
Total shareholders’ equity
Суммарный собственный капитал
Minority interests
Доля меньшинства
Non-current liabilities
Внеоборотные денежные обязательства
Borrowings
Займы
Deferred taxes
Отложенный налог на прибыль
Provisions for liabilities
and charges
Резервы на выплаты по обязательствам
и издержки
Total non-current
liabilities
Суммарные внеоборотные денежные
обязательства
Current liabilities
Оборотные денежные обязательства
Trade and other payables
Товарооборот и прочие платежи
Profit tax liabilities
Обязательства по налогу на прибыль
Borrowings
Займы
Total current liabilities
Суммарные оборотные денежные
обязательства
Total liabilities
Суммарные денежные обязательства
Total shareholders’
equity, minority Interests
and liabilities
Суммарный собственный капитал, доля
меньшинства и денежные обязательства
Ask Ss to compare the numbers in the table, comment on them,
according to the following scheme:
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Analyzing Consolidated Balance sheet derived from the consolidated
financial statements – year ended 31 December 2003 of Transneft
Company, we came to the conclusion that 2003 year is more profitable
than the year 2002, as number of Total assets is more on 52 752 millions
of roubles. Such difference is composed of difference in Total current
assets and Total non-current assets on 16 898 and 35 854 correspondingly.
This may mean that the productive activity is increasing. However
number of receivables and prepayments increased on 44 448 millions of
roubles, this tendency is rather negative and Transneft managers should
take measures to reduce receivables number.
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UNIT 6
PRODUCTION AND COSTS
Lead-in. Elicits the ideas from the students as they suggest things connected
with Production and Costs, make collective mind map on the board as the
ideas are suggested, so that they can see how T. draws out the aspects of the
topic. This activity will prepare Ss to work with the topic of the Unit 6.
Discuss
1. What types of costs do you know? – There are the following types of
costs: direct and indirect material costs, production costs, etc.
2. Who manages production costs at enterprises? Production costs are
managed by several departments, because as the prices for material, as
salary paid to workers can equally influence production cost.
3. How production costs affect the final cost of the goods? Production
cost affects the final cost of the good a lot, because depending on it,
producer decides how much he would mark up the price.
4. How to reduce production costs? To reduce production cost one should
try to find cheaper materials, to use new technologies, to save
materials, labour of workers. Moreover, one can save production cost
by using new ways of storing and proper integrated products
management.
5. Which production costs prevail in petroleum industry? – Petroleum
industry is resource-demanding and labour-intensive sector.
Exercise 1. Read the text and do the exercises.
While reading, help Ss with difficult extracts explaining and translating
some words, if necessary. Ask different Ss to read and translate.
Exercise 2. Decide whether these statements are True (T) or False (F).
1. F – It deals with the relationship between the factors of production and
the output of goods and services
2. T
3. F – As the number of workers increases, they make better use of their
machinery and resources. This results in increasing returns (or
increasing marginal products) for the first five workers hired.
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4. F – Keep in mind that whenever an additional worker is added, the
marginal revenue computation remains the same.
5. T
Exercise 3. Study the explanation of special terms.
output (n)
the amount of goods or
services produced by a person,
machine, factory, company,
etc.
выпуск продукции
input (n)
ideas, advice, effort, money
that you put into something to
help it succeed
вклад
factor of
production
something that is needed to
produce a particular product
фактор
производства
diminishing
return
the idea that a point can be
reached where the advantage or
profit you are getting, stops
increasing in relation to the
effort you are making
сокращающийся
доход
marginal (аdj)
relating to a change in a cost,
value, etc. when one more
thing Is produced, one more
dollar is earned, etc
предельный,
небольшой
costs (n)
money that a business or an
individual must regularly spend
затраты
fixed costs
costs to a business that do not
change when the amount of
goods or services produced
does
постоянные
затраты
incur (v)
if you incur a cost, a debt, or a
fine, you do something that
means that you lose money or
have to pay money
нести, терпеть
убытки
overhead costs
costs not directly related to a
particular product or service,
but related to general costs for
buildings, equipment, etc.
накладные
расходы
interest (n)
an amount paid by a borrower
to a lender, for example to a
доля, участие
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bank by someone borrowing
money for a loan or by a bank
to depositor
charges (n)
an amount of money paid for
services or goods
расходы
rent payment
money paid for the use of a
house, office, etc.
арендная плата
lease (v)
to give somebody the right to
use someth
ing for a particular
period of time in return for
payment
брать в аренду
depreciation
(n)
decreasing in value over a
period of time
обесценивание
variable costs
costs that change when the
amount of something produced
changes
переменные
расходы
rate of
operation
capacity of work done by a
company or machine
норма загрузки
производственных
мощностей
marginal cost
the extra cost of producing one
more of something
предельные
затраты
self-service (n)
a self-service shop, restaurant,
etc. is one in which customers
get the goods themselves and
then go and pay for them
самообслуживание
lot (n)
an area of land on which
nothing has been built and
which may be available to rent,
or build on
участок земли
revenue (n)
money that a business or
organization receives
over a
period of time, especially from
selling goods or services
доход, выручка
break-even
(adj)
when a company is neither
making a profit nor a loss
безубыточный
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Exercise 4. Give English equivalents to the following words and
expressions.
фиксированные затраты –
fixed costs
cамообслуживание –
self-service
безубыточный –
break-even
норма загрузки
производственных мощностей –
rate of operation
доход, выручка –
profit, income
переменные издержки –
variable costs
накладные расходы –
overhead costs
износ –
deterioration
сокращающийся доход –
diminishing return
фактор производства –
factor of production
Exercise 5. Choose the appropriate word or expression from the box to
complete the following sentences.
1. Commercial returns have decreased significantly since their peak in
1997.
2. The East Moline foundry has been operating at less than 50 % capacity
and has incurred significant operating losses.
3. The interest is the added output resulting from employing one more
worker.
4. Their retail branches are a leased so the more business they put
through them the better.
5. Delay in construction could increase costs significantly.
6. Chrysler might run out of money to pay fixed cost on its bonds.
7. The proposed site of the factory may lead to depreciation of property
value in the immediate vicinity.
8. The local authority rents him the property.
Exercise 6.
Listening.
A. Discuss the following with your partner
Price in not only the cost of something. Every purchase has a hidden
cost. What do you think this is?
B. You’re going to hear someone talking about another kind of cost
called opportunity cost. Listen and choose the best answer for each
question.
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1. What is opportunity cost?
a) Something you have to give up in order to have something else.
b) Something a company can charge people for goods or services.
d) Something that companies pay when they first start business.
2. What could be the opportunity cost of watching television?
a) Getting sore eyes.
b) The cost of buying a television.
c) Not sunbathing in the garden.
3. What is the opportunity cost of Alice’s decision?
a) ₤ 3,000
b) ₤ 39,000
c) ₤ 13,000
Tapescript
You can't have everything. That's a fact of life and it's also 3 rule of
economics. If you spend an hour watching television, you might enjoy
yourself. However, you will lose an hour that you could have spent
sunbathing in the garden. The hour lost is an example of what
economists call the ‘opportunity cost’, livery time we buy something,
the total cost to us is the money that we pay, plus the utility value of
something else we could have bought instead. Here's another example.
Alice had a job as a sales assistant in a shop. She earned £13,000 a
year, last year she decided to stop work for three years and study at
university. What will this decision cost her? Well, she has to pay
£1,000 a year for three years for her course. That's £3,000. But that's not
all. She is also giving up her salary for three years. That's an
opportunity cost of £13,000 for three years – £39,000. Of course, she
will also have to rent a flat for three years and pay for her food and
other needs. But these are not opportunity costs. Why? Because she
would have to pay them anyway if she was still working.
Answers:
1. А, 2. С, З. В.
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Exercise 7. Discussion.
1. Comment on the statement: Profit is maximized when the marginal
costs of production equal the marginal revenue from sales.
2. Explain the use of marginal analysis for break-even and profit-
maximizing decisions.
3. Many oil-processing plants shift workers to maintain operations. How
do you think a plant's fixed and variable costs affect its decision to
operate around the clock?
Exercise 8. Prepare presentation on the following topics.
1 Costs in the petroleum engineering
2 Costs in the oil and gas exploration
3 Costs in the oil and gas transportation
4 Costs in the pipeline constructions
Exercise 9. Read the article and do the exercises.
While reading, help Ss with difficult extracts explaining and translating
some words, if necessary. Ask different Ss to read and translate.
Exercise 10. Answer the questions.
1. What human benefits did Schumacher have in view when he coined
the phrase "small is beautiful"? – As a company adds more people in
more locations the sheer task of holding this lot together becomes an
end in itself. The economic advantages of scale will be eroded by the
disadvantages of a loss of intimacy.
2. Did other economists and industrialists share his opinion? –
Schumacher was largely ignored outside Europe.
3. How did industrialists intend to minimize possible human error or deviance
in a large company? – At the time a prevailing view was that large
companies could be very profitable if structures were crystal clear and
rational. Through these means human error or deviance could be minimized.
4. What other strategy besides controlling size did IBM use to reinvest
itself in 1990s? – IBM did clean out 50 per cent of its workforce – but
controlling size was not the main way the company reinvented itself.
Its most important decision was to offload its entire hardware and
components manufacturing.