KUWAIT ENERGY plc GROUP
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 December 2013
F-62
24.
LONG-TERM PROVISIONS
2013
2012
USD 000’s
USD 000’s
Decommissioning provision
3,013
1,989
Retirement benefit obligation
3,243
1,482
6,256
3,471
a)
Decommissioning provision
2013
2012
USD 000’s
USD 000’s
As at 1 January
1,989
1,578
Unwinding of discount
158
158
Changes in estimate
1,002
253
Reclassified as held for sale
(136)
-
As at 31 December
3,013
1,989
The provision for decommissioning is based on the net present value of the Group’s share of the expenditure
which may be incurred at the end of the producing life of each field (currently estimated in 2023) in the removal
and decommissioning of the facilities currently in place. The provision has been estimated using existing
technology and current prices.
b)
Retirement benefit obligation
The group has a post-employment defined benefit obligation towards its non-Kuwaiti employees which is an End-
of-Service (ESB) plan governed by Kuwait Labor Law. The entitlement to these benefits is conditional upon the
tenure of employee service, completion of a minimum service period, salary drawn etc. These are unfunded plans
where the group meets the benefit payment obligation as it falls due.
The amounts recognised in the balance sheet are determined as follows:
2013
2012
USD 000’s
USD 000’s
Present value of unfunded obligations
3,243
1,482
Liability in the Balance sheet
3,243
1,482
The movement in the defined benefit obligation over the year is as follows:
Present value of obligation
2013
2012
USD 000’s
USD 000’s
As at 1 January (Restated)
1,482
1,009
Current service cost
2,150
582
Interest expense/ (income)
113
87
Remeasurements:
Experience (gains)/losses
(137)
-
Benefits paid
(365)
(196)
As at 31 December (Restated)
3,243
1,482
The significant actuarial assumptions were as follows:
2013
2012
