2008_Bud_Work_Doc_Ed1v1.doc

ABU DHABI NATIONAL OIL COMPANY

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BUDGET WORKING DOCUMENT

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Edition 1 v1 (updated notes and budget input forms to be issued August/September 2007, as necessary)

document.docdocument.docdocument.doc


BUDGET 2008 &

FINANCIAL PLAN 2008 - 2012


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TABLE OF CONTENTS

PART A: BUDGET PREPARATION

1 INTRODUCTION 4

1.1 Context 4

1.2 Overview 4

2 TIMETABLE 5

3 PROCESS OVERVIEW 6

3.1 Corporate Budget Objectives (‘Targets’), Manpower and Financial Budgets & Plans 6

3.2 Budget & Financial Plan Preparation 8

3.3 Extraordinary Operating Expenditure getting the budget into the system 8

3.4 Corporate Cash Budget 8

3.5 Business Units 8

3.6 Currency 8

3.7 Exchange Rate 8

3.8 Resolution Of Special Problems and Focal Points 9

4 REVENUE BUDGET 10

4.1 Hydrocarbon Revenue 10

4.2 Non-hydrocarbon Revenue 10

4.3 Non-hydrocarbon Miscellaneous Revenue 11

4.4 Data requirements for Group Financial Plan 12

5 OPERATING BUDGET 13

5.1 Preparation of the Operating Expenditure Budget by Directorates/Divisions 13

5.2 Direct Manpower Cost 14

5.3 Material Cost 15

5.4 Contracted Services 16

5.5 Administration & General 17

5.6 Financial & Other Expenses 18

5.7 Hydrocarbon & Non-hydrocarbon Purchases 18

5.8 Logistical Costs 18

5.9 Others 19


6 RECHARGE BUDGET 20

6.1 Corporate Budget Recharges 20




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7 CAPITAL BUDGET 22

7.1 Corporate Budget Capital 22


8 CASH BUDGET 24

8.1 Process Over view Cash 24

8.2 Cash Budget Elements 25

9 SUBMISSION OF BUDGET 26

9.1 2008 Corporate Budget 26

9.2 Group Financial Plan 27

10 COMMENTARY REQUIREMENTS 28

10.1 Corpporate Budget Commentary 28

10.2 Group Financial Plan 29

PART B: BUDGET LOADING

(FINANCE USE ONLY)

11 LOADING OF BUDGET DATA 30

11.1 Budget Input Template (BIT) 30

11.2 Operating Budget Loading 30

11.3 Capital Work-In-Progress Loading 31

11.4 Group Financial Plan 35APPENDICES & ATTACHMENTS

12 APPENDICES 36

12.1 Budget Timetable 36

12.2 Budget Preparation Reports 37

12.3 Manpower Cost Rates For New Recruits 38

12.4 Insurance Premiums 39

12.5 Exchange Rates 41

12.6 Utilities Rates 42

12.7 Manpower Rates For Capitalised Expenses 42

12.8 Abbreviations 43

13 ATTACHMENTS 44document.docdocument.docdocument.doc


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(see excel file…2008 budget forms.xls - to be issued August / September 2007)



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PART A

1. INTRODUCTION

1.1 Context

The Budget Working Document provides the general framework within which the ADNOC budget and Financial Plan is prepared. This document is to assist all ADNOC Directorates/Divisions in budget preparation and provide the basis, responsibilities, assumptions, currency, forms, etc., used in carrying out budgeting activities.

This document applies to budget preparation for ADNOC business units & Supreme Petroleum Council’s Divisions. It reflects executive management’s requirements to provide the budget on an “ADNOC Group Consolidation” basis and is expanded to cover preparation of the ‘Group Financial Plan’, which will provide a top down view of the Group’s total activity set - in terms of gross financial inputs and outputs, major developments and other key deliverables - over a 5-year horizon. Refer to the overview below.

1.2 Overview

Principal process inputs and responsibilities include:1) Budget and Plan inputs:

a) 2008: Targets and detailed Manpower, Opex, Revenue, Capex, etc. and supporting detailb) 2009-12: summary data on financials and activities

2) Business management, CEO and Boards provide challenge on HQ and JV budgets/plans 3) HQ Directorates provide presentations to CEO; Finance supports process4) Business Line Directorates provide assurance and challenge on Group budgets/plans5) Finance Directorate will :

a) co-ordinate collation of corporate Budget & Group Financial Plan for HQ and Group entitiesb) assure quality and consistency (compute taxes, eliminations, etc.) at a Group levelc) prepare budget booklets, summary variance analysis and other executive level reporting



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Budget & Plan Process OverviewUser Inputs

OPCO JV & ASR, Subs

Manpower Nos.& Cost

Opex & recoveries

Capital Projects

Revenue & Volumes

Divisional Targets

CEO &/or Boards –Review, Challenge, Revise.

Finance Directorateto review for: Consistency Compliance, Collate & Challenge

to prepare - Variance analysis

- Tax & Royalty

ADNOC Group Consolidated

Budget & Financial Plan

simple ‘Budget Book: HQ Takreer, net JV,

ASR, Subs dividends

Elimination & reclassify

HQ & Takreer

Financial Plan: HQ Takreer, ASR,

gross JV and Subs

• Detailed HQT data for 2008

• Summary data for 2009-12

2. TIMETABLEThe CEO issues the timetable for budget preparation each year. The budgeting period usually commences in July, with the setting of budget targets, and is finalised in December.

The timetable for the current year is included at Appendix 12.1, and a summary of key submission dates noted below:



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Key Submission by Directorates• Targets 30th Sept

• Manpower numbers 4th Oct

• Capital Close outs 11th Oct

• Budget Input Templates 18th Nov

Above includes opex, revenue, recoveries and capital

• Group Company Budget 5th &19th Nov

• CEO Presentations M&R and Manpower 7th-26th Nov

E&P, Others, Civil Projects 11th ++ Dec

Budget Book issued to CEO by Finance 9th December

Financial Plan issued to CEO by Finance 13th January** note: initial year only for implementation, future years to be accelerated



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3. PROCESS OVERVIEW

3.1 Corporate Budget Objectives (‘Targets’), Manpower and Financial Budgets & Plans

1) Each business unit prepares a Statement of Budget Targets. This statement consists of an overview of the objectives for the budget year, the work plan required to meet those objectives and any changes in the key resources (e.g. manpower, utilities, and capital) required to carry out the work plan.

The Statement of Budget Targets will take into account the organisational objectives of the concerned business unit, as defined in the ADNOC Organisation Manual and/or any other revisions approved by the CEO.

These are consolidated at the directorate level, and approved by the CEO.

2) Manpower plans are prepares by each Directorate – with details of existing manpower and changes thereto on a quarterly basis for the period 4Q 2007 through 4Q 2008.

These are analysed by:

a) Main type of employee, i.e. UAE national, UAE Graduate entry and Expatriate.

b) Category i.e. grouped by grade bands

c) New employees, grade progressions (for UAE graduate entrants), retirements and other changes

Finance Directorate is responsible for costing of the manpower budget, based on existing salary and benefit structures (subject to any other directive from senior management). The manpower budget will include total employee costs – including all directly identifiable benefits (specifically house rentals, medical insurance) but not training.

Note that ‘contractors’ are included in each Directorates operating/capital budget, as noted below.

Human Resources Directorate, in conjunction with Finance Directorate, issue full instructions to all HQ directorates on preparation of the corporate manpower budget.

3) Each business unit prepares a financial budget based upon its approved Statement of Budget Targets and relevant financial guidelines. The budgets of the component parts of ADNOC will be based on:

a) Statement of corporate budget objectives and Summary Guidelines issued by the CEO.

b) Statement of Budget Targets as issued by each directorate/division and approved by the CEO – refer to CEO letter “Budget and Group Financial Plan: Targets & Guidelines’.

c) Issue of financial guidelines by the Finance Director – see letter ‘Corporate Budget & Group Financial Plan (2008-12): Preparation’ - and this Budget Working Document.

d) Annual production and sales of crude oil by field;



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e) Annual production of natural gas by field;



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f) Annual throughput for refineries and other production plants in terms of capacity utilisation;

g) Other production and sales targets as appropriate to current circumstances (e.g. annual production and sales of gas, petrochemicals and fertilizer);

h) Assumptions regarding prices of above mentioned products for the budget year. Note that M&R Directorate develop underlying key product price assumptions, whilst GFCD are be responsible for ensuring efficient communication of such data to all relevant Group entities;

i) Identification of major exploration and development projects to be started or discontinued during the budget year;

j) Other major projects and activities (e.g. process improvement, research and development, major training) to be started or discontinued during the budget year;

k) Business Line Directorates must identify and quantify any major injections of new capital (to be provided by HQ via loans, share capital or other financing) that may be required by existing (or new) subsidiaries, and

l) Any policy guidelines or specific targets which management wishes to lay down. These may relate, for example, to recruitment, training plans, salary levels or benefits.

4) The financial budgets of the directorates are reviewed internally at various management levels and by the Finance Directorate and are presented by the concerned budget holders to the CEO for approval.

5) The ADNOC Corporate Budget is prepared using:

a) Budgets of the business units and SPC Divisions.

b) Budgets of the joint ventures and sole risk projects; and

c) Budgets for corporate costs and revenues such as dividends, royalties and tax.

6) The ADNOC Group Consolidated Budget is prepared using:

a) ADNOC budget and

b) Budgets of the group companies, after consideration of minority interests.

c) Elimination of significant intercompany sales, purchases and other transactions

(i.e. dividends, rents)

7) After review and endorsement by the Finance Director, the CEO submits the ADNOC budget and

ADNOC Group Consolidated Budget to the SPC for approval.

8) The ADNOC Group Financial Plan is prepared using similar inputs as the Consolidated Budget,

but summarise key financial and activities over a 5 year period:

a) gross financial inputs (operating costs, capex, deprecation, tax and royalty) and outputs

(revenues, gross and net profit)

b) major developments (capital projects and schemes)

c) manpower



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3.2 Budget & Financial Plan Preparation

1) All ADNOC Directorates/Divisions shall prepare the budget based on their budget year Objectives and Targets.

2) Budget Preparation Reports are to be used for forecasting revenue, operating expenses, recharges and capital expenditure for the remaining period of the current year (i.e. September to December to provide ‘2007 Outlook’) and ‘2008 Budget’.

3) Ensure that the budget is achievable, reasonable and corresponds to the budget year activity.4) Prepare budget in total and on a monthly basis for each budget item on the summary and

detailed schedules respectively, other than the capital expenditure budget. The capital expenditure budget is prepared on a project basis with annual incidence.

5) The monthly expenditure for each budget element is to be based on its level of activity rather than phasing the annual budget equally (although by default if is assumed that opex & recoveries are phased evenly through the budget year).

6) Materials or services that are not expected to be delivered or performed during the current year are to be included as part of the next year budget. Particular care must be taken to re-budget in 2008 opex related activities that may not be completed during the current year – and to make adjustment to the 2007 Outlook accordingly.

7) Concerned Managers are to prepare budget for revenues, expenses, recharges and capital expenditure that are directly controllable by them.

3.3 Extraordinary Operating Expenditure

1) Extraordinary operating expenditure is defined as unusual, non-recurring and/or infrequent transactions. Unusual and non-recurring means that the expenditure cannot be reasonably predicted to recur. Expenditures brought about by unforeseen events may also be classified as extraordinary.

2) Extraordinary operating expenditure is shown as a separate item in the operating budget, and requires special consideration on phasing.

3.4 Corporate Cash Budget

Group Treasury Division (GTD) prepares the Corporate Cash Budget in coordination with GFCD and directorates and group companies.

Note that for Group Financial Plan purposes, the overall cash generations is prepared on a top down basis (assuming net cash = net profit + deprecation less capital expenditure for each year)

3.5 Business Units

Use business unit codes as per ADNOC chart of accounts for the budget preparation list/copies.

3.6 Currency

The budget is prepared to the nearest thousand UAE Dirhams (AED).

3.7 Exchange Rates

Use exchange rates issued by GTD for conversion of foreign currencies budgets. (See Appendix 12.5)



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Directorate/ DivisionDIRECTORATE BUDGET

FOCAL POINTExt Mobile

Finance Budget Team

Ext Mobile

ADNOC TECHNICAL INSTITUTE Asharaf Mohammed 22830 Abdul Rahman 24751 4478088

ADMINISTRATIONTawfiq Shraideh 23185

Abdul Rahman 24751 4478088Halima Ahmed 23895

CIVIL PROJECTS

Ibraheem Al Hosani 24789

Abdul Rahman 24751 4478088Jeya Kumar 24947

Mytheen Saleem 23719

EXPLORATION & PRODUCTION Fatima Al Rumaithi 24954 Abdulaziz Al Mazrouei 24809 4441319

GNRCKhaleefa Al Mehairi 24947

Moh'd Hamdan 23723 6181874Shereen Al Romaithi 24949

GROUP FINANCIAL POLICIES & SYSTEMS

Abdel A'al Tambal 23997 Abdulaziz Al Mazrouei 24809 4441319

GROUP TREASURY Charles McFerren 24145 Abdulaziz Al Mazrouei 24809 4441319

Khaleda Al-Fardan 23987

HUMAN RESOURCES

Mohamed Mazherul Haque 23504 Moh'd Hamdan 23723 6181874

Mariam Al Suwaidi 23465

INTERNAL AUDIT Ahmed Matar 23996 Moh'd Hamdan 23723 6181874

LEGAL Mahmoud Hessou 23267 Abdulaziz Al Mazrouei 24809 4441319

MARKETING & REFINING

Abdulla Karsoua 23313

Abdul Rahman 24751 4478088Rashed Al Ramas 23837

Sara Al Tamimi 23274

Oasis Achieve Project TeamMohamed AlMazrouei 23600

Abdulaziz Al Mazrouei 24809 4441319Eissa Al Khamiri 24489

ORGANISATION DEVELOPMENT T.B.A Abdul Rahman 24751 4478088

PETROCHEMICALSMariam Al Katheeri 23627

Moh'd Hamdan 23723 6181874Khawla Al Hosani 23305

PETROLEUM INSTITUTE Fatima Al Shaali 607-5608

SCHOLARSHIP Saeed Al Amoodi 24226 Abdulaziz Al Mazrouei 24809 4441319

SHARED SERVICES Souhail Kefaya 23989 Abdul Rahman 24751 4478088

SPC – FINANCE & LEGAL T.B.A Abdulaziz Al Mazrouei 24809 4441319

SPC - PECDRashed Al Qubaisi 23450

Abdul Rahman 24751 4478088Hana A. Al Mahri 24167

TRAININGAhmed Al Nuwais 23995

Abdul Rahman 24751 4478088Sheikh Fahim 24358

Others

Roger Martin 24715 6610335

Abbas Siddiq 23374

Farha Ali Obeid 23833

3.8 Resolution of Special Problems and Focal PointsAny problems of principle arising during budget preparation should be referred to the Group Budgeting & Control team (GBCD) for resolution. Contacts are noted as below:



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4.REVENUE BUDGET – the following data is required for Budget year 2008 and update to 2007 Outlook only. See last paragraph re summary requirements for Group Financial Plan 2008-2012

4.1 Hydrocarbon Revenue

Hydrocarbon revenue includes revenue from sales of hydrocarbon products such as crude oil, refined products, condensate, gas, petrochemicals, and hydrocarbon related services to third parties etc. (and service revenue earned by providing facilities).

Description Object Code Directorate Explanation & GuidelinesCrude oil & condensate

4110 – 4139 M&R Budget should be prepared based on marketing assumptions, selling price and quantity. Submit sales summary showing production and sales quantities and prices.

Refined products 4140 – 4169 M&R Submit details of refined products sales, selling price and quantity.

Gas & petrochemical 4170 – 4189 M&R Submit details of gas and petrochemicals sales, selling price and quantity.

Fertilizers 4191 – 4192 PCD Submit details of ammonia and urea sales, selling price and quantity.

4.2 Non-hydrocarbon Revenue

Description Object Code Directorate Explanation & GuidelinesUse of assets 4470 – 4479 E & P 4471 Use of assets charges to the

OPCOsMarketing fees 4480 – 4489 M&R 4481 Budget should be based on future

marketing activities conducted for third parties

Gas supply facilities & transportation revenues

4430 – 4439 E & P

GFCD

4432–4439 Gas supply facilities & transportation revenue budget is based on approved rates.



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4.3 Non-hydrocarbon Miscellaneous Revenue

Where appropriate, use subsidiary codes to identify the source of income received.

Description Object Code

Directorate Explanation & Guidelines

Dividends 4410 GFCD/UCD Where appropriate, use business unit codes to identify the source of dividends.

Dividend – others 4420 GFCD Dividends from investments in non-group companies, such as Abu Dhabi Ship Building.

Interest Income 4450 – 4459 GTD

Petroleum Port Service 4510 – 4519 SPC 4511 For using the petroleum ports such as Jebel Dhana/Ruwais, Zirku and Das Island ports, a charge based on Net Registered Ton (NRT) is levied on the ship owner. Port operators on behalf of SPC.

Port charges revenue for the budget year should be estimated on the following basis:

1) Prepare estimate of the tonnage likely to pass through the ports, and

2) Apply the agreed charge for NRT to the estimated tonnage.

4512 The agreed charge payable to port operator should be determined and applied to tonnage for the budget year.

Property rental 4521 Admin

Technical services agreement

4522 UCD

Other non-hydrocarbon services

4523 UCD

Industrial services income

4540 – 4549 UCD

Industrial services income

4540 – 4549 UCD



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Miscellaneous revenues



Penalties 4571 UCD

Tender fees 4572 UCD

RHC Water & Electricity 4573 ADMIN

Subscriptions 4574 ADMIN

Medical recoveries 4575 ADMIN

Oil pollution Recoveries 4576 SPC

Other miscellaneous 4577 UCD

Exceptional items 4590 – 4599 GFCD

4.4 Data requirements for Group Financial Plan

Budget Input Templates (BITs) forms have been revised and expanded to collect summary revenue data for each year of the Financial Plan (i.e. 2009 through 2012). BITs will be provided in both hardcopy and soft copy formats to Budget Focal points of concerned Directorates.



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5. OPERATING BUDGET the following data is required for Budget year 2008 and update to 2007 Outlook only. See last paragraph re summary requirements for Group Financial Plan 2008-2012

5.1 Preparation of the Operating Expenditure Budget by Directorates/Divisions includes:

1) An assessment of current year’s expenditure i.e. the ‘2007 Outlook’.

2) Computation of monthly expenses budget, based on the operational assumptions and activities.

3) The operating expenses for the budget year are to be prepared based on:

a) Operational assumptions/plans and approved budget targets.

b) Historical trend and current year forecast.

4) When forecasting the operating expenditure:

a) Examine the Year to date expenditure for the current year, ascertain the reasons for variations e.g. whether expenditures have been incurred earlier than planned or are likely to be incurred later than planned, or are one-time exceptional variances.

b) Where the original assumptions made for the current year are no longer valid and the year to date reflects such changes, the later is used to estimate expenditures for rest of the year.

c) The current year’s budget should not be used as a sole basis for forecasting the remaining period of the current year. The current year remaining activities need to be reviewed.

d) Particular care must be taken to re-budget in 2008 opex related activities that may not be completed during the current year – and to make adjustment to the 2007 Outlook accordingly.

e) Business unit managers should forecast the expenses for the remaining months of the current year and provide a budget for the budget year for all expense accounts under their direct control or custodial responsibility.



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5.2 Direct Manpower Cost

1) Manpower numbersNote that the Manpower cost is input by GFCD on behalf of all Directorates, based on their approved manpower budget numbers, submissions to HR Directorate of manpower changes and other revisions as approved by senior management.The only exceptions to this are that Directorates/Users are to include in the operating expenses budgets the costs of CONTRACT staff, according to guidelines and instructions issued by HRD and GFCD.

2) Manpower costs

GFCD will apply existing salary and benefits for computing the total payroll cost, applied to the approved manpower numbers. For new recruits, the respective average actual salary for grade mid-point is used.

Directorates/Divisions provide GFCD with the estimated cost of overtime and other special allowances, as past/current amounts may not be appropriate for the future.

Description Object Code Directorate Explanation & Guidelines

Direct manpower costs 6020 – 6079 GFCD - UCD

For new recruits use average actual salaries for relevant grade.1) Overtime cost should be budgeted for

employees who are in grade 10 and below as compensation for authorised overtime. This should not exceed 50 hours per month for normal and shift work schedules and 25 hours per month for rest days and official holidays.

2) Overtime is calculated as a percentage of basic salary.

3) Actual overtime for the last 8 months can be used to compute the percentage on basic salary latest available actual.

6034-6037 Car purchase allowance for eligible employees is to be budgeted based on their entitlement.

Refer to Appendix 12.3 Manpower Cost rates for new recruits. Actual rates are to be used for existing employees.

Secondees to ADNOC 6080 – 6089 GFCD - UCD



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5.3 Material Cost


Material cost 6100 – 6199 UCD Include cost of materials used in operation and support services, i.e. chemicals, catalyst, consumable, fire and safety, etc.

Calculation bases are:

1) Major Material Categories: Quantity based on operating plan and the consumption pattern for the budget year.

2) A lump sum forecast may be made for Minor Materials Category considering any major factors anticipated in the budget year. Emphasis must be placed on spare parts charged under Direct Charge Orders, anticipated consumption during major maintenance overhaul and changes in operating parameters that have an impact on material usage.

3) The materials cost budget must be consistent with the Requisitioning Plan.

4) Contact Shared Services Directorate – Procurement Services Division for material price guidelines.

5) Hydrocarbon fuel consumed internally should not be budgeted.



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5.4 Contracted Services



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Contracted services 6200 – 6399 UCD 6250-6259 Utilities rates for latest actual

6290-6299 as below:

1) Cost of telecommunication services includes expenses incurred on telephone, telex, facsimile, Internet, and voice/data transmission services. It also includes telephone bills paid to third party, and for mobile and residential telephones of senior ADNOC staff.

2) Telecommunication cost should be budgeted based on:

a) Planned level of service

b) Expansion of existing facilities

Historical trend of telecommunication expenses.6350-6359: as below:Contracted manpower cost is the cost of manpower procured by the company from external agencies (i.e. labour contracts). The budget should be based on:1. The number of estimated personnel

(on chart & others) required by each responsibility centre for the remaining period of the current year and budget year.

2. Current rate or contractual rate.3. The existing contracts that are to be

renewed in the budget year should be revalued based on conditions prevailing in the market.

4. Use object code:a) 6351 to budget for contracted

manpower for established organizational position.

b) 6358 to record anticipated costs for overtime.

c) 6359 to budget for manpower not included in the established organizational position.



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5.5 Administration & General


Administration & general expenses

6400 – 6499 UCD 6431-6432 Follow budget insurance premium guidelines described in Statement of Financial Guidelines. See Appendix 11.4

Training TD/UCD 6440-6459

Career development (“technical” careers) covered by concerned directorates

1) The training costs are budgeted centrally by the Training Division

Professional services UCD 6461 – 6465

“Professional Services” e.g. audit, legal, consultancy etc…

Printing, Postage & Stationary

ADMIN 6488

1) Concerned directorates to provide Administration Directorate with budgeted quantity for printing, postage & stationery for the budget year.

2) Administration Directorate calculates budgeted cost of printing, postage & stationery by applying current market price for the total requirements for the budget year.

Donations and Awards ADMIN 6489Includes the long service award, which represents company awards to employees per eligibility.



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5.6 Financial & Other Expenses


Loan interest & bank charges 6510–6519 GFCD - GTD

Exchange gain/loss 6520-6529 GFCD - GTD

Bad debts 6530-6539 GFCD

Inventory adjustments 6540-6549 GFCD

Other financial expenses 6560-6569 FD

5.7 Hydrocarbon & Non-hydrocarbon Purchases


Hydrocarbon purchases 6610-6619 M&R

Non-hydrocarbon purchases 6620-6629 M&R

5.8 Logistical Costs

Logistical costs are costs incurred in distributing and selling marketable products. These are categorized as follows:


Logistical costs 6630-6639 M&R

Movement in stock 6640-6649 GFCD



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5.9 Others


Capitalised expenses 6660-6669 UCD Use this account to capitalise project expenditure previously charged to operating expenses. The expenses related to manpower costs should be capitalised on the following basis:

1) Use the current year budgeted manpower rate (See Appendix 11.9), which includes salary, benefits, accommodation and medical for Capital Budget - ADNOC Supervision Cost.

2) No internal allocation of manpower costs should be budgeted or charged to G&G capital projects

Royalties & Tax 6800-6809 GFCD

Operating cost – J.V.&SR 6810-6819 FD/E&P G&G costs should be budgeted as capital project and at year-end, its costs should be charged to operating expenses

Depreciation & Amortization 6900-6959 GFCDThe fixed assets write-off should include all capital budget expenditures to be charged to expenses. This occurs when they are below the minimum limit of capitalisation (i.e., AED 10,000 for individual capital item) as per ADNOC Accounting Policies & Principles

G&G costs, Minor Assets & Other Write-offs

Gain/Loss on Sales of Fixed Assets

Unsuccessful Exploration

6971-6999 FD/UCD .



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Budget Input Templates (BITs) forms have been revised and expanded to collect summary operating expenses data for each year of the Financial Plan (i.e. 2009 through 2012). BITs will be provided in both hardcopy and soft copy formats to Budget Focal points of concerned Directorates.

6. RECHARGE BUDGET - the following data is required for Budget year 2008 and update to 2007 Outlook only. See last paragraph re summary requirements for Group Financial Plan 2008-2012

6.1 Corporate Budget Recharge

Recharge cost is defined as transfer of cost, based on agreement, from ADNOC to group companies.

1) Recharge cost should be calculated based on:

a) Agreed rates, amount or formula.

b) Contractual amount and the existing contractual agreement should be reviewed for updating the recharge cost.

2) Recharge of ATI Training Costs and Scholarship Program Costs to group companies should be based on approved Recharge of Training and Scholarship Program Costs Policies.

3) Use the group company subsidiary code to identify where the cost is to be recharged.



Secondees 6701 HR

ADNOC Technical Institute 6702 ATI

Scholars abroad 6703 SCHL

Courses & seminar fees 6704 TD

Ruwais School tuition fees 6705 ADMIN

Technical Assistance 6706 UCD

Abu Dhabi Accommodation 6707 ADMIN

Ruwais Housing Complex rent 6708 ADMIN

RHC – Common facilities 6709 ADMIN

Medical Services (Abu Dhabi) 6710 ADMIN

Medical Services (Remote Area) 6711 ADMIN

Medical Evacuation (Medevac) 6712 ADMIN



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Environment & safety protection 6713 E&P



Social/welfare & other costs 6714 ADMIN

Capitalized expenses 6715 UCD

IT charges 6716 SSD

Insurance premiums & asset valuations

6717 GTD/SSD Use the latest approved rates. Refer to Appendix 12.4.

PPA & oil spill costs 6718 SPC Recharges are calculated based on costs, plus a margin for overheads and divided among the beneficiaries.

Gas processing, operating costs, transport & handling

6719 E&P

Utilities Various UCD Use the latest approved utilities rates for recharge to both group companies and third parties. Refer to Appendix 12.6.

Other recharges 6723 HR&A

Group National Recruit 6725 GNRD

Waste management 6726 ADMIN


Budget Input Templates (BITs) forms have been revised and expanded to collect summary recharged expenses data for each year of the Financial Plan (i.e. 2009 through 2012). BITs will be provided in both hardcopy and soft copy formats to Budget Focal points of concerned Directorates.



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7. CAPITAL BUDGET - Data requirements for the 2008 Budget and 2007 Outlook are noted below. Also refer to the final paragraph for requirements for the Group Financial Plan.

7.1 Corporate Budget Capital

1) The Capital Budget represents a plan for capital expenditure and is prepared to:

a) Provide an assessment of the current status for each project.

b) Provide a basis for reviewing and approving capital expenditure plan for the budget year on each project.

c) Estimate the extent of capitalisation in the current year.

2) The Capital Budget consists of:

a) The Capital Expenditures Budget for ongoing projects, new projects

b) The Capital Closeout Budget for existing projects.

c) Cancelled Projects.

3) Capital Budget should be prepared based on capital investment requirements and budget targets.

Projects Category Responsibility

ADNOC Exploration Program E&P

Capital Projects UCD

ADNOC Intangibles E&P/SSD

Furniture, Equipment and Vehicles ADMIN

Educational & Training Equipment TD

Information Technology SSD-IST

RMS Equipment ADMIN –GSD-GSP

4) For capital budgets Motor Vehicles, Furniture & Equipment or Personnel Computer Equipment refer to form CB9 (see section 13 “Attachments”).

Formats for presentation of project capital requirements will agreed by Finance with the respective Division on a case by case basis. In practice Civil Projects Division is the primary sponsor of major projects and will continue to use their existing formats and templates. Typically, these formats will include as a minimum the information included below.

5) For Existing Projects

a) The original authorised expenditure for the entire project.b) The accumulated expenditure up to the year prior to the current year.



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c) The expenditure incurred in the current year up to August 31.

The concerned Responsibility Centre Manager for the project should provide the following:

a) Revised budget for the entire project based on the budget year assumptions,b) Commitment made and the assignment of budget elements to third parties for the

execution,c) Forecasted expenditure at the end of the current year,d) Incidence of expenditure in the budget year, and the year following the budget year and

beyond.6) Proposal to Close Capitals Projects (PCCP)

a) Prepare a list of PCCP for the year which should includes the following:

(i) Project number

(ii) Description of the project

(iii) Budgeted amount approved for the project.

(iv) Previous year’s cumulative actual expenditures on the project.

(v)Forecast of expenditure for the current year, this forecast should take into account actual expenditure to date, accruals, commitment, contingency, etc., for the project

(vi) Total cost of project.

b) Use the form CAPEX-II (See section 13 “Attachments”)


1) Plan Data

Budget submissions in earlier years included the requirement to provided details of all years’ expenditures on major projects to provide the estimated final cost (EFC). Typically, this was for projects approved or supported by senior management. The intent of the Group Financial Plan is to provide management with an indication of the total funding requirements for new major projects and schemes – whether approved, tentative/provisional/conditional or optional. Therefore, additional data is now required for future projects that may not be fully approved. Directorates are to provide indicative EFCs for all major projects with an estimated total costs of AED 200 million or greater. This will include:

a) Nature or project – a brief description of the capital works (<50 words)

b) EFC and annual incidence (for all years) – note that estimates of future annual costs are to be provided before any allowance for future price inflation – i.e. they are to be expressed in 2008/9 monies.

c) ADNOC % interest (but note that summary of GROSS spend and outputs are to be included in the Plan submission)



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d) Nature of output/deliverable and financial impact – e.g. amount of production, cost saving, HSE or other value generated on commencement of the project.

2) Confidentiality and Sensitivity

Due to the sensitivity of some projects, it may be necessary to only include in the Financial Plan certain general statements/data on future projects. Directorates should consult fully with FCD on how such projects may be reflected in the Group Financial Plan

8 .CASH BUDGET – cash budget data is only required for 2008. Cash projections for the out-years of the Financial Plan period (i.e. 2009- 2012) will be derived from Directorates expenditure and income submissions and overviewed by FCD for working capital and certain non-cash impacts.

8.1 Process Overview Cash

1) The Cash budget is a statement of cash inflows and outflows for the budget year. It identifies the periods and amount of cash excess or deficit. Its objectives are to:

a) Plan the cash requirements for the budget year,

b) Project the cash position during the year to provide adequate financing for cash deficit and plan investment for cash surplus,

c) Monitor and control the timing of cash flow, credit and collection activities.

2) The cash budget exercise involves an estimate of cash receipts and disbursements based on the financial budgets and financial commitments such as loan repayments, borrowings, cash calls, etc.

3) Cash Budget is prepared by each Directorate based on their financial budgets and according to the following formats identified. Using form ADNOC D see Attachment 8.

4) FCD provides the assistance if required to concerned Directorates and the information needed to GTD.

5) The following items should be excluded from the Cash Budgets:

a) Depreciation & Amortization

b) Employee End of Service Benefits (EOSB)

c) Accruals before they become due for payment, and

d) Capitalised Expenses (G&G, Manpower Cost) under ADNOC Supervision in capital projects and OPEX Budget.

6) FD provides manpower cost for Cash Budget.

7) Provide projected cash budget elements in summary for:

a) Revenues,

b) Recharges to group companies,

c) Operating Expenses (OPEX) excluding manpower cost,

d) Capital Expenditures (CAPEX), etc.



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e) Assumptions used to prepare Cash Budgets such as credit period, contractual agreements, recharge arrangements, etc. is disclosed separately with the Cash Budget.

8) Each Directorate is responsible for submitting its cash budget and summary of projected cash budget elements to:

a) GTD, for compilation of ADNOC cash budget, and

b) GFCD for review.

9) GTD is responsible for the review of individual Directorate cash budget and consolidation of the overall Cash Budget in order to provide an overview of cash position. (See section 13 “Attachments”).

8.2 Cash Budget Elements

The Cash Budget is composed of the projected amounts for the following elements:

Element Responsibility & Source Of Data

A. CASH INFLOWSHydrocarbon Revenue M&R based on Hydrocarbon Revenue BudgetNon-hydrocarbon Revenue M&R based products Revenue BudgetHydrocarbon Services M&R based on approved agreements for services and fees.

GFCD for: ADGAS payments Gas Gathering Facilities (ADGAS) Gas Transportation Tariff, Ammonia/Urea (FERTIL) Insurance Management FeesE&P for: Use of Assets Charge SPC for: PPA Revenue

Dividends & Advances GFCDLoan Repayments GTDInterest Income GTDRecharges to group companies UCDOther Income UCDB. CASH OUTFLOWSRoyalties and Tax GFCD based on Royalties & Tax CalculationCash Calls E&PProcessing Fees GFCD based on budgets of TAKREER, GASCO & FERTILOperating Expenses All Directorates based on OPEX budgetsCapital Expenditures UCD based on CAPEX budgets, where applicableCAPEX & OPEX - Sole Risks E&P based on OPCOs Budget.Borrowing Repayments GTD



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Element Responsibility & Source Of Data

Interest Expenses GTDLogistical Costs M&ROther Expenses UCDC. TRANSFER TO ADIATransfer to ADIA and ADIC GTD



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9. SUBMISSION OF BUDGET

9.1 Corporate Budget 2008

The Corporate Budget is prepared on the basis of business units. Each directorate shall submit the budget for the Directorate as a whole, and individual budgets for the business units of that directorate. The following are to be included in each budget presentation package:

BUDGET SUBMISSION

Description Explanation & Guidelines

Corporate Budget Objectives & Targets

Refer to 3.1 Corporate Budget Objectives

Manpower Plan The manpower plan includes:

The basic assumptions used to generate expected manpower levels

A summary of those manpower levels on quarterly and annual basis

Analysis of differences between the manpower plan for the budget year and the outlook for the balance of the year.

The manpower plan must agree with the manpower plans supplied to Finance Directorate and used to calculate manpower costs.

Operating Summary Summary should include the following:

A short form budget, highlighting the major revenue and expenditure areas, and the differences between the current year outlook and the budget for next year.

Assumptions used,

Major changes in budgets, and

Overall comments by category, explaining increase/decrease by category between

(i) Budget year (2008) and current year Outlook (2007).

(ii) 2007 Outlook and 2007 Original Budget.

Categories include:

Hydrocarbon sales revenue,

Non-hydrocarbon sales revenue.

Non-hydrocarbon miscellaneous revenue.

Direct manpower costs.

Material costs.

Contracted services.

Administration & general expenses.



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Description Explanation & Guidelines

Financial & other expenses.

Hydrocarbon & non-hydrocarbon purchases.

Logistical costs.

Other costs.

Recharges.

As applicable.

(See section 13 – Budget Input Template)

Operating Commentary

Provide, for appropriate object codes, a detailed explanation for the increase/decrease between the budget year and current year outlook.

Cash Flow Budget Required for Directorates and autonomous divisions, and at corporate level.

Capital Expenditure Summary – New Projects

Summary should include the following:

A short form budget, highlighting the major projects that are to be undertaken.

Assumptions used

Scope of Projects For each new capital expenditure item, a scope document shall be prepared.

This shall include:

The scope of the project

Summary of the justification for the project.

Budget expenditure for the budget year.

Budget expenditure for subsequent year(s).

Capital Expenditure Summary – Continuing

Summary should include the following:

A short form budget, highlighting the major projects that are to be undertaken.

Assumptions used

Commentary A commentary on continuing projects is to be provided, including summaries for project slippages, delays and material project over/under runs.

9.2 Group Financial Plan

Finance Directorate will prepare a summary presentation on the Group Financial Plan during the first year of implementation. Directorate/Divisions are to support this process. (This is subject to revision and refinement in future years.)



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10. COMMENTARY REQUIREMENT

10.1 Corporate Budget Commentary

1) Commentary is primarily focussed on current years (Outlook) and next year (Budget), with emphasis on justifications for variances (increases or decreases) from approved budgets and new projects.

In particular, full commentary is required on significant variations between:

a) 2007 Original Budget and 2007 Outlookb) 2007 Outlook and 2008 Original Budget

Also, there is continuing requirement to provide information on the basis on which the budget was formulated (e.g. key variables/costs drivers, any oil price sensitivity, etc)

2) The ‘2007 Original Budget’ is the value as original submitted and approved by Executive Management (i.e. BEFORE any enhancements that may have been approved on a case by case basis by the CEO during the current year). This will enable GBCT to collate and provide management with justifications for variations from the Budget as originally approved.

3) In order to make this less onerous for Directorates, the LIMITS and tolerances have been established: this is to ensure that they may concentrate on provide quality explanations/justification on fewer but more significant variations.

The main parameters are now:a) For items where the Budget item is greater than AED 1 million:

(i) Comment required on all variations greater than (i) AED 100,000 or (ii) 10%.

b) For items where the Budget item is less than AED 1 million:(i) Commentary required on all variation greater than (i) AED 100,000

and (ii) 10%.

c) Additionally commentary is required:(i) for any new expenses items greater than AED 20,000 that are

reported in the 2007 Outlook and/or.(ii) New 2008 Original Budget items is excess of AED 20,000.

The Budget Input templates have pre-set formula/functions to help point out where these limits apply and require commentary.

4) Please note that these criteria apply only to determine those accounts that are financially significant. Commentaries on other accounts may be required if those accounts are significant due to control or other issues. Directorates should feel free to supply commentary on accounts that fall outside these criteria.



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Some practical examples of how these rules apply (all values in AED 000’s):

2007 Budget

as originally approved

2007 Outlook (for full year)

Increase or

(Decrease) AED

Increase or

(Decrease) %

Test (i) +/- AED 100k

Test (ii) +/-

10%

Comments mandatory

10 50 +40 +400 No Yes No

500 420 (80) (16)% No Yes No

0 50 +50 N/A No N/A Yes

1500 1580 +80 5% No No No

2000 2150 +150 +8% Yes No Yes

3000 2500 (500) (17)% Yes Yes Yes

The above example is for 2007 Budget vs. 2007 Outlook but the same rules apply for variations between 2007 Outlook and 2008 Original Budget

10.2 Group Financial Plan Commentary

For the first year of implementation of the Plan the main objective is to provide a high level view of the Groups key financial performance and relate this to the major deliverables. Therefore, variance analysis will be more focused on describing new projects/schemes (i.e. those in with an estimated final cost of AED 200 million or more) and the corresponding impact on capacities, production and manpower.

This may be refined for future years to meet management’s requirements.



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PART B

11. LOADING OF BUDGET DATA: This section primarily relates to loading of the 2008 Corporate Budget data (and to a certain extent future years expenditures on multi year major projects. See last section for loading/collation of the Group Financial Plan data.

11.1 Budget Input Template (BIT)

1) Budget Department will provide Budget Input Template (BIT) in MS Excel to all the concerned Directorate /Division.

2) The concerned Directorate / Divisions budget focal points will update the BIT with the 2007 outlook and the 2008 budget figures.

3) In order to facilitate the budget preparation GFPSD will provide access to each Directorate / Divisions budget focal points to review their past date in the system.

11.2 Operating Budget Loading

This process utilises the completed BIT received from the concerned directorate/division.

1) Login to JD Edwards Enterprise

2) Access the Budget Sheet Download screen, through the following steps:

a) “Budget (Opex) upload” in the commitment /AFE module

b) Work with budget Upload screen

c) Click add button and fill the explanation filed with the appropriate description.

d) The default value for the fiscal year should be the current year. Not the budget year . change this to the budget year if necessary.

e) Left click in the “OK” button

f) Click “find” button and then click on”Budget Details” from the tool bar.

g) Click the “Import” Icon from the screen.

h) The “Import Assistant”screen will appear . After specifying import options and defining the cell range, click Preview and then click Continue to import the data.

i) Left click in the “OK” button

j) This process is carried out to import the data from the BIT to the system.

3) Verify the data in the system and make changes if required

a) Left click in the “OK” button

b) Approve the data and make it final.

4) Click in “budget upload” from tool bar.

5) THE “Printer Selection” secreen will appear and left click on the “OK” button

6) The will create a “BO” batches in the system



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11.3 Capital Work-In-Progress Loading

1) Create Project Master Record

a) Login to JD Edwards.

b) Access the “Project Master Revisions” screen, through the following steps:

(i) “Commitments/AFE Menu”

(ii) “Project Setup & Phasing”

(iii) “Project Master Revisions”

c) Click on “Add” button to commence creation of new project master record.

d) Enter:

(i) Job Number, using seven-digit code.

(ii) Description, using project description.

(iii) Level of Detail

The default for this is “9”

(iv) Type Business Unit

The default for this is “JB”

(v) Company, using “00050” for ADNOC projects.

(vi) Contract type

Options include:

“EPC” – fixed price, lump-sum projects

“EPCM” – managed projects

“PASS” – purchased assets

“SHT” – shutdown

“EXM” – extraordinary expenditure

e) All other fields should be left blank.

f) Left click on the “OK” button.

g) Left click on the “Can (cell)” button.

h) Left click on the “Close” button.



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2) Attach Cost Code Structure

a) Login to JD Edwards

b) Access the “Copy Selected Master Codes” screen, through the following steps:

(i) “Commitments/AFE Menu


(iii) “Copy Selected Master Codes”

c) Left click on “Find” button to retrieve chart types.

d) Select the appropriate chart type. This relates to the type of project, and for capital expenditure projects relates to the general ledger CWIP object.

Use PM1 for capital projects and PAS for purchased assets.

e) Double left click on selected chart type, bringing up the “Copy Selected Master Codes – [Copy Cost Codes]” screen.

f) Enter:

(i) Job (Project code) to which the chart type should be attached.

(ii) Range of accounts within the master codes to be transferred. This will usually relate to the chapters relevant to the particular project. If these fields are left blank, the entire range will be copied to the project.

g) Left click on “OK” button.

h) A Confirmation of Copy prompt will appear. Left click on “OK” button.

i) The chart will then be loaded to the project, and a display will show the number of lines added to the chart for the project. Note – the loading of the chart can be slow.

j) Left click on “Can (cell)” button to complete the attachment of the cost code structure.

k) Repeat above to add master codes from additional charts, as required.

l) When all additions have been completed, left click on the “Close” button.



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3) Delete Accounts

a) Access the “Original Budget Entry” through the following steps:


(ii) Project Setup & Phasing

(iii) Original Budget Entry

b) Left click on “Find” button to retrieve projects

c) Double left click on selected project

d) Select the appropriate range of cost code & cost type

e) Click “Delete” button

f) Click “Ok” button

g) Click on “Close” button

3) Project Original Budgeta) Login to JD Edwards

b) Access the “Original Budget Entry” screen, through the following steps:



(iii) “Original Budget Entry”

c) Left click on “Find” button to retrieve projects.

d) Double left click on selected project.

e) Enter:

(iv) G/L date as “01/01/08” to indicate that the project is to commence in the budget year.

You may receive a warning message: “Warning: Fiscal Year Not within Range”. This warning should be ignored for entry of projects in the budget year.

You may receive a warning message: “The information has changed. Before entering data, press FIND.” If this occurs:

- Left click on the “OK” button.

- Left click on the “Find” button.

(vii) Left click on the “Find” button.

(viii) Original Amount. Enter the budgeted amounts in the “Original Amount” field corresponding to the relevant cost code and cost type.

e) When all amounts have been entered, left click on the “OK” button.

f) Left click on the “OK” button.

g) Left click on the “Can (cell)” button.




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i) Note: You may only enter or edit the budget if the “Job Posting Edit” field is blank.



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4) Project Phasing – New Projects


b) Access the “CAX Budget Preparation – New Projects” screen, through the following steps:



(iii) “CAX Budget Preparation”- Next year – New Project.

c) Left click on “Find” button to retrieve projects.

d) Double left click on selected project.

e) Enter the appropriate amounts in the following columns:

(i) Budget Year – the project phasing that is expected to be incurred in the budget year.

(ii) Next Year – the project phasing that is expected to be incurred in the year following the budget year.

(iii) Later Amount – the project phasing that is expected to be incurred in the second and subsequent years following the budget year. Note that this is being reviewed to cover input of Group Financial Plan data and Finance Directorate will advise user Directorates accordingly.

f) The Current Year Remainder and Current Year Total fields will be calculated based on the above. Confirm that these fields contain zero values. If not, then correct phasing amounts entered at step d).

g) Left click on the “OK” button.


6) Project Phasing – Continuing Projects

This is required for all continuing projects not closed as at 31 August, regardless of whether project completion is expected to occur after the end of the current year.


b) Access the “CAX Budget Preparation” screen, through the following steps:



(iii) “CAX Budget Preparation” – Next year – Ongoing Project

c) The screen will default to the budget year and budget preparation for ADNOC Project Company. Use the find features to locate the relevant project.

d) Double click on selected project.



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e) If the total budget amount is to be amended, enter the revised budget figures against the relevant cost code/cost type combination. This will generate the budget change amount. Confirm the change amount to supporting documentation.



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f) For each line in the project chart which contains a total budget figure, enter:

(i) Budget Year – the project phasing that is expected to be incurred in the budget year.

(ii) Next Year – the project phasing that is expected to be incurred in the year following the budget year.

(iii) Later Amount – the project phasing that is expected to be incurred in the second and subsequent years following the budget year.

g) The Current Year Remainder and Current Year Total fields will be calculated based on the above. Confirm that these fields contain the correct values. If not, then:

(i) Correct Revised Budget amounts entered at stepe), or

(ii)Correct phasing amounts entered at step f).

h) Left click on the “OK” button.

i) Left click on the “Close” button.

11.4 Group Financial Plan

Finance Directorate is reviewing the use of JDE Edwards to record all Group Financial Plan data – both financial and quantitative data re production/manpower, etc. Initially the intention is to either utilize JDE and/or Excel to collate data for the 2008-12 Plan period.



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APPENDICES

12.1 Budget Timetable



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12.2 Budget Preparation Reports – Uploading (Capex) – Finance Use Only

The following is a sample of the Budget Preparation Report, as created using JD Edwards OneWorld.

Done

Financial Systems & Procedures Division

12.3 Manpower Cost Rates For New Recruits

Currency AED Group A+ Group A Group B Group C Group D

Code Description Grade 18-20 Grade 14-17 Grade 11-13 Grade 07-10 Grade 01-06 Remarks UAE Others UAE Others UAE Others UAE Others UAE Others

6021 Basic Salary 36,500 25,000 17,900 16,800 12,200 11,0000 7,100 5,8008 4,200 3,100 Per month

6022 Supplementary Allowance 11,000 7,200 6,700 5,700 4700 4,100 2,300 1,800 1,400 900 Per month

6023 Overtime Per month

6025 In Lieu of Air Tickets 7,900 3,100 2,100 1,200 700 Per month

6026 EOSB / Pension 9,100 4,0000 5,300 2,800 3,600 1,900 2,3003 1,000 1,800 500 Per month

6027 Air Ticket / Baggage Allowance 5,000 1000 1,000 700 300 Per month

6028 Education Assistance 3,000 1,200 1.700 1,200 800 1,200 700 0 Per month

6031 Allowances - Job related

*Shift All'ce 260 260 260 260 260 260 260 260 260 260 Per month

*Disturbance All'ce 180 180 180 180 180 180 180 180 180 180 Per month

*Site All'ce 4,000 750 4,000 740 3,800 720 2,500 500 1,100 Per month

6032 Allowances Social 2,600 1,900 1400 1.6 2,600 Per month

*Child All'ce 600 600 600 600 600 Per month

6033 Allowances Housing 8,700 10,200 6,900 5.0 2,000 1200 Per month

6034 Allowances Furniture 80,000 47,000 47,000 47,000 33,000 33,000 26,000 26,000 0.0 0.0 Once a time

6035 Allowance - Car As applicable - - - - - - - - - Every 2 years

6036 Allowances In Lieu of Electric 800 800 600 600 600 600 400 400 400 200 Per month

6037 Car, Maintenance & Fuel Allow. 13200 - - - - - - - - - Per annum

6042 Employee Insurance Others 900 600 400 400 300 300 200 100 100 100 Per monthDone


12.4 Insurance Premiums

Insurance Policy Object No. Guideline Budget To Be Prepared By

Fire & Extended Perils 6432 Based on declared asset value including additions for the renewal period and using premium rate(s).

Procurement Division (SSD) for ADNOC-HQ under BU 16920 without reallocation.

Third Party Liability 6432 Based on declared payroll/revenue/risk exposure wherever applicable using premium rate(s).

Includes M/S marine liability and aviation fuelling liability.

Procurement Division (SSD) – Group Risk Management Department for ADNOC-HQ under BU 16920 without reallocation.

Motor Insurance 6487 Use applicable policy rates calculated on the expected declared sums insured.

Administration Directorate – General Services Division for ADNOC HQ’s owned vehicles.

Petroleum Ports Authority for their vehicles.

Directorate’s capital project.

Bunkering Transit 6635 Use budgeted volume and applicable policy rates(s).

Marketing & Refining Directorate for hydrocarbon products shipments.

Theft & Dishonesty 6432 Use the existing lump sum premium to be allocated according to the declared values of the applicable risk factors.

Procurement Division (SSD) – Group Risk Management Department for ADNOC H.Q. under BU 16920.

Combined Construction All Risks Use contract values and applicable policy rate(s).

Concerned Directorates for their Capital Budget.


Insurance Policy Object No. Guideline Budget To Be Prepared By

Navigational Aids 6432 Use expected replacement values and applicable policy rates(s).

SPC under BU’s of Petroleum Ports Authority (29110), Oil Spill Response Centre (29120)

Medical Malpractice 6432 Use the existing lump sum premium based on the number of medical staff.

Shares services Directorate – Group Risk Management Department, and inform Administration Directorate accordingly.

Open Transit Insurance(excluding oil & related products)

6432 Based on expected shipment value/turnover and applicable policy rate(s).

Concerned Directorates.

Sports policy 6431 Based on the current sum insured and lump sum premium.

Shared services Directorate – Group Risk Management Department under BU 16920 without reallocation.

Medical insurance ( Daman) 6434 Employees medical insurance Administration Directorate - Medical Services Department under B U 17250

ADNOC Group Marine Hull and Machinery Blanket Policy:

6465 Based on the current insured and lump sum premium.

Based on the declared sum insured and applicable (tendered) rate(s). (The actual rate will be determined during the first quarter of.

hared services Directorate – Group Risk Management Department under BU 17420 without reallocation.

Group Companies Vessels etc. Shared Services Directorate – Group Risk Management Department, and the premium to be allocated to concerned Group Companies according to their sums insured.

ADNOC Fishing Boats 6332 Apply policy rates to the expected declared sums insured.

Human Resources & Administration Directorate

ADNOC Group Life, Accident, Illness, Medical Expenses and Dread Disease Scheme

6042 Apply the policy rate to the estimated basic salaries for, to calculate the insurance cost.

This rate is subject to adjustment based on the declared basic salaries at each year-end.

Group Finance Controller Division – Group Budget and Control Team



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12.5 Exchange Rates Against UAE Dirham (AED) as at July 31st, 2007

Apply the exchange rates provided by GTD

CURRENCY DEALING RATES AS ON

Abbreviation CURRENCY NAME Factor1

GBP POUND STERLING 7.5016DKK DANISH KRONER 0.6836NZD NEW ZEALAND DOLLAR 2.8314NOK NORWEGIAN KRONER 0.6336SEK SWEDISH KRONER 0.5536CHF SWISS FRANC 3.0866USD U.S. DOLLAR 3.6780CAD CANADIAN DOLLAR 3.4773BHD BAHRAINI DINAR 9.7631JOD JORDANIAN DINAR 5.2548KWD KUWAITI DINAR 13.0919LBP LEBANESE POUND REFEROMR RIAL OMANI 9.5701QAR QATARI RIYAL 1.0142SAR SAUDI RIYAL 0.9847YER YEMENI RIYAL REFEREGP EGYPTIAN POUND 0.6920MAD MOROCCO DIRHAM 0.4539AUD AUSTRALIAN DOLLAR 3.1689HKD HONG KONG DOLLAR 0.4749INR INDIAN RUPEE 0.0923JPY JAPANESE YEN 0.0315LKR SRI LANKAN RUPEE 0.0339PKR PAK RUPEE 0.0615SGD SINGAPORE DOLLAR 2.4448CYP CYPRUS POUND 8.7646EUR EURO 5.0772USD PRIME RATE 8.2500GBP BASE RATE 5.7500

1 Factor: To calculate UAE Dirham, Currency * Factor= Value in AED e.g.500USD*3.673=1836.5


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12.6 Utilities Rates

Apply the utilities rates as provided by TAKREER

Utilities Type Units Rate for Outlook

Rate for Budget

AED AED

Electricity MWh 163 163

Sea water ’000 M³ 56 56

Distillate water M³ 8 8

Potable water M³ 10 10

Note: These are rates from previous year and will be updated in September 2007

12.7 Manpower Rates for Capitalised Expenses

Grad

e

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7 8,093 11,268 5,756 8,014 6,833 9,514 5,583 7,774 329 459 21,240 16,246 8 9,745 13,568 6,545 9,112 6,833 9,514 5,583 7,774 329 459 23,540 17,344 9 11,584 16,128 8,134 11,324 8,500 11,834 6,417 8,934 329 459 28,421 20,717 10 12,153 16,920 9,117 12,693 8,500 11,834 6,417 8,934 329 459 29,213 22,086 11 15,912 22,247 10,648 14,887 11,000 15,379 6,833 9,554 329 461 38,087 24,901 12 16,903 23,633 12,321 17,226 11,000 15,379 6,833 9,554 329 461 39,473 27,240 13 18,877 26,393 14,445 20,195 11,833 16,544 7,667 10,719 329 461 43,398 31,375 14 21,676 30,474 16,294 22,909 11,833 16,637 7,667 10,779 329 463 47,574 34,151 15 24,141 33,941 18,370 25,827 15,167 21,323 10,167 14,294 329 463 55,727 40,584 16 27,231 38,285 20,108 28,271 15,167 21,323 10,167 14,294 329 463 60,072 43,028 17 30,879 43,413 22,064 31,021 17,667 24,838 12,667 17,808 329 463 68,715 49,293 18 36,402 51,179 26,975 37,925 17,667 24,838 12,667 17,808 329 463 76,480 56,197

UAE / Others

Total cost / monthU A E Others U A E Others


Effective Date


1.2

of 55


Endorsed By:

Approved By:

Finance Director

Note: These are rates from previous year and will be updated in September 2007


Effective Date


1.2

of 55


Endorsed By:

Approved By:

Finance Director

12.8 Abbreviations

Abbreviation Directorate/Division

ATI ADNOC Technical Institute

GBCT Group Budget and Control Team

PCD Petrochemicals Directorate

CEO Chief Executive Officer

CPD Civil Projects Division

E&P Exploration & Production Directorate

GFCD Group Finance Controller Division

FD Finance Directorate

GFPSD Group Financial Policies and Systems Division

GNRD Group National Recruitment Division

GSD General Services Division

HR Human Resources Directorate

I.AUDIT Internal Audit Division

ISTD Information Systems & Technology Division

LEG Legal Division

M&R Marketing & Refining Directorate

OD Organisation Development Division

PECD Petroleum Export & Control Division

PI Petroleum Institute

PPA Petroleum Ports Authority

SCHL Scholarship Department

SPC Supreme Petroleum Council

SSD Shared Services Directorate

GTD Group Treasury Division

UCD User/Concerned Directorate

ADMIN Administration Directorate


Effective Date


1.2

of 55


Endorsed By:

Approved By:

Finance Director

13. ATTACHMENTS – (Refer to Excel File…2008 Budge & Plan Forms.xls)

Form Reference Submissions Required?

Budget Financial Plan

Budget Input Template – Opex, Revenue and Recharges Manpower and Financial Plan inputs

BIT-1 Required Required

Temporary Manpower Changes T-MPC Required Not required

Manpower Changes - 2007 outlook vs 2008 budget

MPC-1 Required Not required

Manpower Changes – 2008 budget MPC-2 Required Not required

Capital Budget – Equipment, Vehicles and Furniture

CB-12 Required Not required

Proposal To Close Projects CAPEX-II Required Not required

Capital Budget – Summary By Directorate CB-SUM Required Required

Cash Budget ADNOC-D Required Not required

Note: above forms will be issued in August / September 2007

2008_Bud_Work_Doc_Ed1v1.doc

Documents

Transcript of 2008_Bud_Work_Doc_Ed1v1.doc