DMS IIBM ANSWER SHEETS - In a recent case, it emerged that Frank Finn, a sales director at ABC Co, had been awarded a substantial over-inflation annual basic

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Fundamentals of Oil & Gas Industry

Part One:

Multiple choices:

1. The major field(s) of application of gas turbine is (are)

a. Aviation

b. Oil and gas industry

c. Marine propulsion

d. All of the above

2. The following is (are) the limitation(s) of gas turbines.

a. They are not self-starting

b. Higher rotor speeds

c. Low efficiencies at part loads

d. All of the above

3. The ratio of heat actually released by 1kg of fuel to heat that would be released by complete perfect combustion, is called

a. Thermal efficiency

b. Combustion efficiency

c. Engine efficiency

d. Compression efficiency

4. The percentage of total energy input appearing as network output of the cycle

a. Thermal efficiency

b. Combustion efficiency

c. Engine efficiency

d. Compression efficiency

5. The following method(s) can be used to improve the thermal efficiency of open cycle gas turbine plant

a. inter-cooling

b. Reheating

c. Regeneration

d. All of the above

6. Which of the following is (are) used as starter for a gas turbine

a. An Internal combustion engine

b. A steam turbine

c. An auxiliary electric motor

d. All of the above

7. Gas turbine is shut down by

a. Turning off starter

b. Stopping the compressor

c. Fuel is cut off from the combustor

d. Any of the above

8. In gas turbine, intercooler is placed

a. before low pressure compressor

b. in between low pressure compressor and high pressure compressor

c. in between high pressure compressor and turbine

d. None of the above

9. In gas turbine, the function of Re-heater is to

a. Heat inlet air

b. Heat exhaust gases

c. Heat air coming out of compressor

d. Heat gases coming out of high pressure turbine

10. The ‘work ratio’ increases with

a. increase in turbine inlet pressure

b. decrease in compressor inlet temperature

c. decrease in pressure ratio of the cycle

d. all of the above

DMS IIBM ANSWER SHEETS - In a recent case, it emerged that Frank Finn, a sales director at ABC Co, had been awarded a substantial over-inflation annual basic

DMS IIBM ANSWER SHEETS - In a recent case, it emerged that Frank Finn, a sales director at ABC Co, had been awarded a substantial over-inflation annual basic

Part Two:

1. What is API? How is API gravity calculated?

2. Who is EIA? How does it present its report?

3. What is OPEC? Name few members of OPEC.

4. How would you describe the company’s leadership philosophy?

Caselet 1

In a recent case, it emerged that Frank Finn, a sales director at ABC Co, had been awarded a substantial over-inflation annual basic pay award with no apparent link to performance. When a major institutional shareholder, Swanland Investments, looked into the issue, it emerged that Mr Finn had a cross directorship with Joe Ng, an executive director of DEF Co. Mr Ng was a non-executive director of ABC and chairman of its remunerations committee. Swanland Investments argued at the annual general meeting that there was ‘a problem with the independence’ of Mr Ng and further, that Mr Finn’s remuneration package as a sales director was considered to be poorly aligned to Swanland’s interests because it was too much weighted by basic pay and contained inadequate levels of incentive.

Swanland Investments proposed that the composition of Mr Finn’s remuneration package be reconsidered by the remunerations committee and that Mr Ng should not be present during the discussion. Another of the larger institutional shareholders, Hanoi House, objected to this, proposing instead that Mr Ng and Mr Finn both resign from their respective non-executive directorships as there was ‘clear evidence of malpractice’. Swanland considered this too radical a step, as Mr Ng’s input was, in its opinion, valuable on ABC’s board.

Questions:

1. Explain FOUR roles of a remunerations committee and how the cross directorship undermines these roles at ABC Co.

2. Swanland Investments believed Mr Finn’s remunerations package to be ‘poorly aligned’ to its interests. With reference to the different components of a director’s remunerations package, explain how Mr Finn’s remuneration might be more aligned to shareholders’ interests at ABC Co.

3. Evaluate the proposal from Hanoi House that both Mr Ng and Mr Finn be required to resign from their respective non-executive positions.

Caselet 2

As part of a review of its internal control systems, the board of FF Co, a large textiles company, has sought your advice as a senior accountant in the company. FF’s stated objective has always been to adopt the highest standards of internal control because it believes that by doing so it will not only provide shareholders with confidence in its governance but also enhance its overall reputation with all stakeholders. In recent years, however, FF’s reputation for internal control has been damaged somewhat by a qualified audit statement last year (over issues of compliance with financial reporting standards) and an unfortunate internal incident the year prior to that. This incident concerned an employee, Miss Osula, expressing concern about the compliance of one of the company’s products with an international standard on fire safety. She raised the issue with her immediate manager but he said, according to Miss Osula, that it wasn’t his job to report her concerns to senior management. When she failed to obtain a response herself from senior management, she decided to report the lack of compliance to the press. This significantly embarrassed the company and led to a substantial deterioration in FF’s reputation. The specifics of the above case concerned a fabric produced by FF Co, which, in order to comply with an international fire safety standard, was required to resist fire for ten minutes when in contact with a direct flame. According to Miss Osula, who was a member of the quality control staff, FF was allowing material rated at only five minutes fire resistance to be sold labelled as ten minute rated. In her statement to the press, Miss Osula said that there was a culture of carelessness in FF and that this was only one example of the way the company approached issues such as international fire safety standards.)

Questions:

1. Describe how the internal control systems at FF Co differ from a ‘sound’ system of internal control, such as that set out in the Turnbull guidance, for example.

2. Define ‘reputation risk’ and evaluate the potential effects of FF’s poor reputation on its financial situation.

3. Explain, with reference to FF as appropriate, the ethical responsibilities of a professional accountant both as an employee and as a professional.

Section C: Applied Theory (30 marks)

1. Risk management tools and techniques are used to minimize hazardous events associated with oil and gas exploration and production activities.

(a) Identify risk management tools and techniques.

(b) Identify the steps of risk management AND outline EACH of the steps identified.

(c) Identify project phases where risk management applies.

2. Outline the content of a procedure for bypassing an emergency shutdown (ESD) system.

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