The most common accounting methods for oil and gas upstream activities are full cost (Fe) and successful efforts (SE) methods. However, Libyan accounting practice differs from these two methods. Oil and gas companies in Libya are permitted by Libyan Petroleum Law (LPL) to capitalise or expense several types of costs, whereas these costs are specified to be capitalised or expensed under the Fe and SE methods. Thus, discretion exists between accounting methods in global accounting practice, whereas in Libyan accounting practice it exists amongst the method where the choice is permitted. This thesis seeks to point out three issues. Firstly, it seeks to find out the accounting practice of oil and gas upstream activities in Libya under LPL, especially for the costs which are under the capital or expense choice and considers consistency for the international oil and gas companies (IOCs) when they report to Libyan authorities and their holding companies. Secondly, it seeks to understand the stakeholders' perceptions regarding accounting for oil and gas upstream activities in Libya, and also report the role of the Libyan stakeholders regarding oil and gas upstream activities. Thirdly, it seeks to find out the fiscal impact in Libya of using the Fe, SE and LPL methods to treat the costs of oil and gas upstream activities. The thesis applies stakeholder and agency theories as theoretical frameworks. Stakeholder theory assists in attempting to develop a stakeholder model regarding accounting for oil and gas upstream activities in Libya. Agency theory attempts to consider the relationship between IOCs as agents and the Libyan government as principal. Furthermore, the thesis applies qualitative and quantitative methodologies as an approach for the study. The results indicate that an inconsistency issue exists when IOCs report to Libyan authorities and their holding companies. Furthermore, they show that there is a lack of involvement of Libyan stakeholders regarding accounting for oil and gas upstream activities. In addition, the results point out the fiscal impact of using different accounting methods other than LPL to treat oil and gas upstream activities with FC adopting creating a small positive impact on the Libyan economy and SE a significant negative impact on the Libyan economy.

The promulgation of the Mineral and Petroleum Resources Development Act 28 of 2002 (MPRDA) led to a significant increase in the number of junior exploration companies. In this regard, International Financial Reporting Standard (IFRS) 6 allows companies to develop their own accounting policies for exploration and evaluation expenditure. However, there is no definition of either prospecting or exploration in the Income Tax Act 58 of 1962 (Income Tax Act). The objective of this study was to perform a literature review and to carry out empirical research by using questionnaires that were distributed to junior exploration companies to investigate whether accounting and taxation practices are consistently applied. Accordingly, the findings confirmed that the accounting and taxation practices followed by junior exploration companies are not consistently applied. / Financial Accounting / M.Com. (Accounting)

The promulgation of the Mineral and Petroleum Resources Development Act 28 of 2002 (MPRDA) led to a significant increase in the number of junior exploration companies. In this regard, International Financial Reporting Standard (IFRS) 6 allows companies to develop their own accounting policies for exploration and evaluation expenditure. However, there is no definition of either prospecting or exploration in the Income Tax Act 58 of 1962 (Income Tax Act). The objective of this study was to perform a literature review and to carry out empirical research by using questionnaires that were distributed to junior exploration companies to investigate whether accounting and taxation practices are consistently applied. Accordingly, the findings confirmed that the accounting and taxation practices followed by junior exploration companies are not consistently applied. / Financial Accounting / M.Com. (Accounting)