A major bombshell broken by the Guardian newspaper this week, shows that something may have been amiss with a 2009 ExxonMobil oil bid in Nigeria — where the major won a massive concession, despite bidding $2.25 billion less than China’s CNOOC.
And the news on corruption in the resources sector didn’t stop there. Reports also surfaced that the FBI may get involved in a widening probe into alleged bribery by Sable Mining on iron ore projects in Liberia.
With all that going on, the U.S. Securities and Exchange Commission (SEC) took the opportunity Monday to unveil some critical new rules on oil and gas reporting. With the regulators bringing in strict requirements on how companies working internationally report payments to governments.
Under the new rules, companies involved in oil and gas extraction would have to disclose any payments over $100,000 made to state bodies. With this information being made available to the public each year, as part of a Form SD — or Specialized Disclosure report.
The move from the SEC is the latest in a long saga related to payment disclosure for oil and gas. With such measures having initially been mandated by the U.S. government as part of the Dodd-Frank Act of 2010.
The SEC subsequently proposed a first attempt at these rules, but the measure was suspended by a Washington D.C. judge in 2013 — after a lawsuit led by the American Petroleum Institute claimed that public disclosure of payment information could put U.S. firms at a business disadvantage. Related: Oil Prices Rally On Weaker Dollar
In 2014, Oxfam America then sued the SEC — to speed up a second attempt at the payment rules. With this week’s announcement coming on the last possible day that judges in that case allowed for the regulator to present a re-written policy.
In regards to proprietary information, the SEC said that oil and gas companies will still have to file all payments made during the year. But the regulator will then translate that information into a “public compilation” — presumably with the aim of protecting sensitive data.
Watch to see if that’s enough to satisfy oil and gas industry groups — or if more lawsuits will be coming here.
Here’s to cleaning things up,
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By Dave Forest
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