API Chief Economist John Felmy has said that the draconian approach the sEC is expected to take on new regulations implementing Section 1504 of the 2010 Dodd-Frank financial reform law will force the disclosure of commercially sensitive information that will hurt the competitiveness of America’s oil and natural gas companies and cost jobs also.
‘The SEC appears to want to require publicly traded energy firms to release commercially sensitive, detailed payment information about every foreign and US project. With a few clicks of a mouse, state owned foreign firms, companies like the China National Petroleum Company and Russia’s Gazprom, could plunder that information, which could help them determine their rivals’ strategies and resource levels.
‘Unfortunately, disclosure would not be a two way street. State owned foreign companies would have to reveal nothing, and might even be favoured for projects in host countries reluctant to have financial information disclosed.
‘Without appropriate changed to the final rule, US firms would lose business. US jobs would not be created. And potential revenue to our government would not be generated.‘And all of this potential harm and sacrifice are unnecessary because a structure already exists to provide greater financial transparency, one that’s endorsed both by the Obama administration and the World Bank. It's called the Extractive Industries Transparency Initiative (EITI), and it was launched in September 2002 by then British Prime Minister Tony Blair. EITI is already increasing disclosure of financial information without harming job creation and our economy, and it should be the basis for the rule the SEC is about to issue.’
Adapted from press release by Claira Lloyd.
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