Below are some extracts from a letter signed by the API’s Patrick T. Mulva, Chairman API General Finance Committee and Stephen Comstock, API Director of Tax and Accounting Policy to Elizabeth M. Murphy, Secretary of US SEC. The subject of the letter was ‘Rulemaking under Section 13(q) of the Securities Exchange Act of 1934.’
‘API supports transparency. Many of our member companies are long time active supporters of voluntary transparency initiatives such as the Extractive Industries Transparency Initiative (EITI). API also strongly believes transparency can be achieved in a manner that remains true to the Commission’s core mission to protect investors and promote efficient capital markets. This can be accomplished by building on the District Court’s key findings in American Petroleum Institute, et Al. v. Securities and Exchange Commission: that Section 13(q) does not require individual company filings to be made public, and that the Commission retains its authority under the Exchange Act to craft appropriate exemptions.’
Project level reporting
‘To facilitate compilation of reported payment data, API proposes a new approach to project level reporting based on the following objectives:
- The definition should be standardised so that data from different companies can be readily compiled at the project level.
- The definition should be sufficiently comprehensive to encompass the wide variety of different activities in which different issuers may engage around the world.
- The definition should be sufficiently localised to provide information concerning activities taking place within a citizen’s own region, without being so granular as to reveal proprietary commercial information.
With the above objectives in mind, our analysis shows every resource extraction project can be defined with three key items of information: what resource is being extracted: how that resource is being extracted: and where the extractive activity takes place. Within each of these categories, parameters to define specific resource extraction projects are readily standardized: ‘What’ consists of oil, natural gas, copper, coal, etc. ‘How can be defined by different methods of development, such as onshore or offshore development or surface or underground mining. ‘Where’ can simply identify the area where the extractive activity takes place.
‘We recognise the Commission has many pressing matters to address, including other mandated rulemaking under the Dodd-Frank Act. However, API would urge the Commission to move ahead with new rulemaking under Section 13(q) as early as practicable in 2014.
‘We believe this schedule is necessary in order to meet with current schedule of the US candidacy for EITI membership, under which initial reporting would likely cover all or part of the 2015 calendar year. If the new rules under 13(q) are significantly delayed, the ability of the USEITI Multi-Stakeholder Group to make decision on key issues could likewise be delayed. Worse still, USEITI could proceed to develop a separate reporting framework. This would be an inefficient use of government resources and a costly, redundant compliance burden for reporting companies.’
Selected from original letter by Claira Lloyd
Read the article online at: https://www.hydrocarbonengineering.com/gas-processing/08112013/extracts_api_to_sec_letter/