API Offers Guidelines For New SEC Payment Disclosure Requirements

Washington – The American Petroleum Institute (API) submitted a letter to the U.S. Securities and Exchange Commission (SEC) today suggesting ways the SEC can re-write its foreign payments disclosure rule that will support transparency without harming the competiveness of U.S. companies or undermine U.S. job creation.

“U.S. oil and natural gas companies have been leading the way to increase transparency in payments to foreign governments for a decade,” said Stephen Comstock, API director of tax and accounting policy. “The SEC can issue rules that meet their legal obligations to promote transparency while also protecting firms’ international competitiveness. The timely development of a new rule following our suggestions could be a win-win for payment transparency and American jobs.”

A disclosure rule is required under Section 1504 of the Dodd-Frank Act, which the SEC issued in August 2012. However, a federal court recently invalidated the rule and ordered the SEC to issue a new rule. The prior rule required publicly traded energy companies to release commercially sensitive payment information about foreign and U.S. projects, giving firms not subject to the rule an upper hand when bidding for energy contracts, according to Comstock.

The letter highlights the SEC’s flexibility in complying with Section 1504's mandated disclosures, as outlined by the court case, and describes a proposal for detailed disclosure of payments received by governments. This data would be easily accessible to local populations to help them understand how revenues are used by their governments, according to Comstock.

API is a national trade association that represents all segments of America’s technology-driven oil and natural gas industry. Its more than 550 members — including large integrated companies, exploration and production, refining, marketing, pipeline, and marine businesses, and service and supply firms — provide most of the nation’s energy. The industry also supports 9.8 million U.S. jobs and 8 percent of the U.S. economy, delivers $85 million a day in revenue to our government, and, since 2000, has invested over $2 trillion in U.S. capital projects to advance all forms of energy, including alternatives.