Maintenance. We are currently updating the site. Please check back shortly
Members login
  • TrustLaw
  • Members Portal
Subscribe Donate

Tullow Oil becomes first to reveal all in extractive transparency drive

Source: Thomson Reuters Foundation - Tue, 25 Mar 2014 04:13 GMT
cor-gov
A driver waits to pay while getting petrol for his vehicle at a gas station in Taipei, on April 2, 2012. REUTERS/Shengfa Lin
Tweet Recommend Google + LinkedIn Email Print
Leave us a comment

LONDON (Thomson Reuters Foundation) - Tullow Oil on Monday became the first oil, gas or mining company to publish in detail the revenues it pays to governments worldwide, ahead of a new European law that aims to tackle corruption through greater transparency and is due to come in to force in the UK by 2015.

The move by the London-listed oil and gas company was widely applauded by anti-corruption activists who have pushed governments in the United States and the EU to pass laws that shine a light on the taxes, royalties and license fees that extractive companies pay to resource-rich countries.

About 3.5 billion people live in countries with extensive oil, gas or mineral reserves, but poor governance and corruption mean many of them do not benefit from the wealth created by their extraction.

While transparency campaigners are optimistic about the potential riches that the oil may bring, they are concerned that the mistakes made by other resource-rich countries are not replicated in their countries.

“As Uganda gears towards commercial oil production, citizens' main concern is ensuring the responsible management of our natural resources,” Winnie Ngabiirwe, national coordinator of coalition group Publish What You Pay (PWYP) Uganda, said in a statement.

“However, accessing information about what companies pay and for what is the hardest challenge we are currently confronted with… With the hard data we can hold our government - whether at the local or national level - to account for how they have spent the revenues and check that extractive companies are paying a fair price for the resources they extract.”

Tullow, which specialises in finding oil in previously unexplored areas, has discovered significant oil fields in both Kenya and Uganda in the last decade.

“The openness exhibited by Tullow Oil is commendable and should be emulated by both governments and other companies,” Ngabiirwe said.

FULL DISCLOSURE

Tullow has published the payments it makes to governments on both a project-by-project basis and also on an aggregated country-by-country basis. Other extractive companies including the Anglo-Australian miner Rio Tinto and the majority state-owned Norwegian oil company Statoil have published revenue payments on a country-level basis, but Tullow is the first to do so for every project in which it is involved.

The United States in 2010 became the first country to pass a law mandating that oil, gas and mining companies be forced to publish their revenue payments on a project-by-project basis. However, the law is now in limbo as the U.S. Securities and Exchange Commission (SEC), which is responsible for writing the transparency regulations, takes a second crack at drafting the disclosure rules after a U.S. court threw out its first attempt as potentially too sweeping.

The American Petroleum Institute (API) industry lobbying group and the U.S. Chamber of Commerce had argued that disclosing royalties, fees and other payments over $100,000 to foreign governments would damage the industry’s competitiveness.

Campaigners say that Tullow’s disclosure of project-by-project payments undermines that argument.

“Tullow’s welcome disclosure blows a hole in the argument made by some oil companies that project-level reporting will impose a heavy burden on business,” Dominic Eagleton, a senior campaigner with transparency group Global Witness, said in a statement.

“This should encourage the Securities and Exchange Commission to create a strong payment disclosure rule that allows citizens to identify which companies are making payments and the amounts they contribute.”

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of the Thomson Reuters Foundation. For more information see our Acceptable Use Policy.

comments powered by Disqus