State Dept. envisions ‘proactive role’ in oil payment disclosure regs

HOUSTON – The State Department plans to help the energy industry implement new Securities and Exchange Commission (SEC) rules that will force oil and mining companies to disclose payments to foreign governments, a senior official said.

The rules, required under the 2010 Dodd-Frank financial law, have been challenged in court by business and oil-and-gas industry groups.

But Carlos Pascual, State’s coordinator for international energy affairs, said State will have a key role to play once the legal challenge is sorted out.

“After there is a conclusion to that, [the rule] will have implications for how energy companies conduct their business around the world, and we then need to play a very proactive role,” he told reporters Tuesday on the sidelines of a major energy conference here.

Pascual said State has a role “both in educating countries of what those requirements are and working with companies as they enter into those market environments.”

“But right now we need to let the legal process work itself out,” Pascual said at the IHS CERAWeek energy conference.

The rule will force SEC-listed oil, natural-gas and mining companies to reveal payments to governments (including the U.S.) related to projects in their countries, such as money for production licenses, taxes, royalties and other aspects of energy and mineral projects.

It’s aimed at increasing transparency to help undo the “resource curse,” in which some impoverished countries in Africa and elsewhere are plagued by high levels of corruption and conflict alongside their energy and mineral wealth.

Critics of the rule say it will impose very costly burdens and put SEC-listed oil companies at a disadvantage overseas against state-owned Russian and Chinese competitors.

Companies including Exxon, Shell and Chevron have fought against the public disclosure mandates, and the American Petroleum Institute, the U.S. Chamber of Commerce and other groups have sued to overturn the regulation.

Oral arguments in litigation over the rule are scheduled for March 22 before the U.S. Court of Appeals for the District of Columbia Circuit.