Transparency International launches 2008 Report on Revenue Transparency of Oil and Gas Companies
April 28, 2008

Transparency International releases the above report which is part of the Promoting Revenue Transparency (“PRT”) Project of TI in collaboration with Revenue Watch Institute and Publish What You Pay coalition members. PRT aims at raising awareness amongst all stakeholders of the importance of revenue transparency and how his may be achieved, sustained and mainstreamed.

The broad objectives of the Report are to measure revenue transparency and steps for improvement, develop broad standards, and support the use of revenue transparency standards and measures of performance by companies, rating agencies, investors, government regulators and civil society. The focus on revenue transparency is important as a lack of transparency breeds corruption, theft, and mismanagement. Revenue transparency will contribute to sustainable development, reduce corruption and improve governance.

This pilot Report covers 42 oil and gas companies and 21 countries. Malaysia’s national oil company, Petroliam Nasional Berhad (PETRONAS). PETRONAS cooperated fully in the research and verification of the data.

The following are the key findings of the Report:

• Revenue Transparency is not yet common practice in the industry. The weakest area is reporting on payments to host governments.
• Wide variation exists in company practice. Leading companies demonstrate that revenue transparency is possible.
• Good practice in revenue transparency starts at home, where regulation has a strong influence on current company revenue transparency practices.
• Regulatory practices produce systematic impact. If there are more demanding regulations at home, companies are likely to report consistently in all their countries of operation. Often though, national oil company behaviour at home and abroad is different, suggesting that host regulations are not enough.
• Disclosure of information on revenue transparency is hindered by diverse formats of reporting that are different to obtain, interpret and compare across companies and countries.