Gazprom Neft recognizes 5 bln rubles impairment loss on Iraq assets
MOSCOW. Aug 25 (Interfax) - Gazprom Neft has recognized losses of 5 billion rubles from the impairment of its assets in Iraq, the oil company said in financial report to International Financial Reporting Standards (IFRS) for Q2 2016.
"As of June 30, 2016 the Group performed impairment testing and recognized impairment loss in relation to upstream oil and gas assets located in Iraq region in the amount of 5 billion rubles. The Group recognized impairment loss for the amount by which the book value of these assets exceeded its recoverable amount of 79 billion rubles. The impairment loss relating to upstream oil and gas asset was due to revision of expected economic performance of the assets. The recoverable amount was determined as present value of estimated future cash flows using available forecasts of oil prices from globally recognized research institutions and production quantities based on reserve reports and long-term strategic plans. The pre-tax discount rate reflects current market assessments of the time value of money and the risks specific to the asset and varies in real terms from 11.9% to 14.1% per annum," the company said.