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Practice Guide to Auditing Oil and Gas Revenues


Published Audits on Oil and Gas Revenues and Financial Assurances for Site Remediation

Performance auditors in Canada, the United States, Australia, and other resource-rich countries already have some experience auditing revenues from oil and gas extraction and financial assurances for site remediation. A search of the our Audit News Database and of other websites has identified more than a dozen performance audits on these topics published since 2008. Table 1 presents a list of audits that examined oil and gas revenues, while Table 2 provides a list of audits that examined financial assurances.

The focus of these audits varies considerably. Some have focused solely on royalties (for example, the 2008 Newfoundland and Labrador audit on offshore oil royalties) or on financial assurances for site remediation (for example, the 2012 Saskatchewan audit on managing the risks and cleanup of oil and gas wells), while others have covered one of these issues as part of a larger audit of the sustainable development of a resource sector (for example, the 2011 Québec audit on the management of exploration and production activities in the shale gas industry). These audits reflect the range of scoping options available to performance auditors when auditing the oil and gas sector.

Reviewing previously published audits in the early planning phase of a new audit may help audit teams to:

  • complete their list of potential audit issues to examine, and
  • identify risk factors that they might not yet have considered.

Table 1 – Published Performance Audits on Revenues from Oil and Gas Extraction

Audit Office

Year

Title

Office of the Auditor General of Manitoba

2008

Compliance with Oil and Gas Legislation

Office of the Auditor General of Newfoundland and Labrador

2008

Oil Royalties

Government Accountability Office – United States of America

2008

Oil & Gas Royalties – The Federal System for Collecting Oil and Gas Revenues Needs Comprehensive Reassessment

Australian National Audit Office

2009

Administration of the Petroleum Resource Rent Tax

Vérificateur général du Québec (Office of the Auditor General of Québec)

2011

Gestion gouvernementale de l’exploration et de l’exploitation des gaz de schiste (government management of shale gas exploration and production)

Office of the Auditor General of Newfoundland and Labrador

2013

Oil Royalty Monitoring

Natural Resources Canada

2014

Audit of Offshore Revenues and Transfers

National Audit Office of Estonia

2014

Actions of the State in Directing the Use of Oil Shale

Federal Court of Accounts of Brazil

2014

Coordinated Audit About the Oversight of the Public Revenues From the Oil and Natural Gas Exploration and Production in Brazil, Colombia, and Peru

Government Accountability Office – United States of America

2015

Oil and Gas Resources – Interior’s Production Verification Efforts and Royalty Data Have Improved, but Further Actions Needed

Office of the Auditor General of Alberta

2016

Energy – Systems to Manage Royalty Reduction Programs

Source: Data from our Audit News Database and other sites for the period 2008–2016.

Table 2 – Published Performance Audits on Financial Assurances for Oil and Gas Production Site Remediation

Audit Office

Year

Title

Office of the Auditor General of British Columbia

2010

Oil and Gas Site Contamination Risks: Improved Oversight Needed

Government Accountability Office – United States of America

2010

Oil and Gas Bonds – Bonding Requirements and BLM Expenditures to Reclaim Orphaned Wells

Government Accountability Office – United States of America

2011

Oil and Gas Bonds – BLM Needs a Comprehensive Strategy to Better Manage Potential Oil and Gas Well Liability

Vérificateur général du Québec (Office of the Auditor General of Québec)

2011

Gestion gouvernementale de l’exploration et de l’exploitation des gaz de schiste (government management of shale gas exploration and production)

Office of the Provincial Auditor of Saskatchewan

2012

Managing the Risks and Cleanup of Oil and Gas Wells

Office of the Auditor General of Canada (Commissioner of the Environment and Sustainable Development)

2012

Financial Assurances for Environmental Risks

Government Accountability Office – United States of America

2015

Offshore Oil and Gas Resources – Actions Needed to Better Protect Against Billions of Dollars in Federal Exposure to Decommissioning Liabilities

Source: Data from our Audit News Database and other sites for the period 2008–2016.