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TRANSPARENCYINTERNATIONAL
the global coalition against corruption
PROMOTING REVENUETRANSPARENCY
2011 REPORT ON OIL
AND GAS COMPANIES
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2011 Transparency International. All rights reserved.
ISBN: 978-3-935711-66-1
Printed on 100% recycled paper.
Author: Barbara Kowalczyk-Hoyer
Design: Sophie Everett
Acknowledgements: We would like to thank all the individuals who contributed to all
stages o the research and the preparation o the report. Our gratitude goes t o many
TI colleagues who have invested time and eort, among them Franois Valrian,Susan Ct-Freeman and Peter Wilkinson.
Special thanks also go to Antoine Heuty, Karin Lissakers and Juan Carlos Quiroz o
our co-branding partner the Revenue Watch Institute or their valuable contributions.
Every eort has been made to veriy the accuracy o the inormation contained
in this report. All inormation was believed to be correct as o February 2011.
Nevertheless, Transparency International cannot accept responsibility or t he
consequences o its use or other purposes or in other contexts.
Cover photo: AFP/Getty Images
Transparency International (TI) is the global civil society organisation leading
the ight against corruption. Through more than 90 chapters worldwide and
an international secretariat in Berlin, TI raises awareness o the damaging
eects o corruption and works with partners in government, business and
civil society to develop and implement eective measures to tackle it.
www.transparency.org
The Revenue Watch Institute promotes the eective, transparent and
accountable management o oil, gas and mineral resources or the publicgood. Through capacity building, technical assistance, research, unding
and advocacy, we help countries to realize the development beneits o their
natural resource wealth.
www.revenuewatch.org
FOREWORD
Transparency International (TI) and the Revenue Watch Institute (RWI) are pleased
to issue the 2011 report on Promoting Revenue Transparency in Oil and Gas
Companies.
Our ndings are part o the Promoting Revenue Transparency(PRT) project and
build on earlier reports, the 2005 Save the Childrens Beyond the Rhetoric, TIs2008
Report on Revenue Transparency of Oil and Gas Companiesand the2010 Revenue
Watch Index, co-launched by RWI and TI.
TI and RWI have cooperated on the PRT project since 2007. Its goal is to promote
good governance in resource-rich countries by improving awareness o the
importance o revenue transparency among governments and companies.
While the Revenue Watch Index set revenue transparency benchmarks orgovernments, our latest research reviews reporting practices by major oil and
gas companies in areas relevant to revenue transparency. Our main objective is
to promote disclosure o payments by oil and gas companies to the countries
where they operate. Our ndings provide the basis or recommendations aimed at
companies but also at legislators, regulators and investors.
The report identies some encouraging progress since our 2008 report. More oil and
gas companies now publish inormation about their anti-corruption programmes.
Signicant disclosure gaps persist, however, notably in country-by-country disclosure
by corporations on their international operations.
We encourage the use o the report as a tool or advocacy by international and local
civil society organisations to support demands or higher disclosure standards. It will
also be helpul to companies or benchmarking and improving their reporting, and
to public bodies or evaluating and amending their regulatory processes. Our work
oers investors and nancial analysts a ramework or assessing the transparency o
companies in the oil and gas sector and other industries.
We hope that TIs and RWIs continued collaboration will contribute to larger civil
society eorts to improve governance in the extractives sector. We look orward to
receiving the views o all interested parties. We remain dedicated to transparent and
accountable management o natural resources or the common good.
Dr. Cobus de Swardt
Managing Director,
Transparency International Secretariat
Karin Lissakers
Director,
Revenue Watch Institute
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CONTENTS
MAJOR RESULTS 2
EXECUTIVE SUMMARY 4
1. Why transparency in the oil and gas sector matters 5
2. Methodology 6
3. Major findings 7
4. Key policy recommendations 8
RESULTS OF THE ANALYSIS 12
1. General results 12
2. Reporting on anti-corruption programmes (section 1) 14
3. Organisational disclosure (section 2) 22
4. Country-level disclosure (section 3) 30
5. National oil company specific (section 4) 43
6. Cross-section analysis 48
8. 2011 vs. 2008 results 51
CONCLUSION 52
ANNE XES 53
Anne x 1 - H isto ry of the proj ect 53
Anne x 2 M etho dolo gy and ques tio nnai re guid e 55
Anne x 3 B uild ing a p erf ect scor e co mpan y 65
Anne x 4 C ount ry- lev el d isc losu re o n do mest ic o pera tion s 70
Anne x 5 - D ata tab les wit h s ourc es 73
Anne x 6 D ata shar ing wit h co mpan ies - a n e xamp le of a da ta set 110
Anne x 7 O il a nd g as indu str y b ackg roun d r elev ant to the PRT repo rt 113
LIST OF TABLES AND DIAGRAMS 118
BIBLIOGRAPHY 119
END NOTES 120
ABBREVIATIONS AND ACRONYMS
APEC Asia-Pacic Economic Cooperation
BG BG Group
BHP BHP Billiton
BP British Petroleum
CEO Chie Executive Ocer
CIS Community o Independent States
CNOOC China National Oshore
Oil Corporation
CNPC China National Petroleum Corporation
EITI Extractive Industries
Transparency Initiative
EU European Union
GEP GEPetrol
IMF International Monetary Fund
ICC International Chamber o Commerce
IOC international oil company
(company with no state control)
IPIECA International Petroleum Industry
Environmental Conservation Association
KMG KazMunaiGaz National Company
KPC Kuwait Petroleum Corporation
NIOC National Iranian Oil Company
NNPC Nigerian National Petroleum Company
NOC national oil company
(state-controlled company)
OMV OMV Group AG
ONGC Oil and Natural Gas Corporation
(Indian NOC)
OPEC Organisation o Petroleum
Exporting Countries
PACI Partnering Against Corruption Initiative
PDVSA Petroleos de Venezuela
Pemex Petroleos Mexicanos
Petrobras Petrleo Brasileiro S.A.
Petronas Petroliam Nasional Berhad
P&L prot-and-loss
PRT Promoting Revenue Transparency
PWYP Publish What You Pay
QP Qatar Petroleum
RWI Revenue Watch Institute
SEC Securities and Exchange Commission
SNPC Socit Nationale des Ptroles
du Congo
SOCAR State Oil Company o Azerbaijan
Sonatrach Socit Nationale pour la Recherche,
la Production, le Transport,
la Transormation, et la Commercialisation
des Hydrocarbures s.p.
st. dev. standard deviation
UNCAC UN Convention against Corruption
UNGC UN Global Compact
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REPO
RTINGONANTI-CORRUPTIONPROGRAMMES
ORGANISATIONAL
DISCLOSURE
COUNTRY-LEVELDISCLOSURE-INTERNATIONAL
OPERATIONS
43%AVERAGE
65%AVERAGE
16%AVERAGE
INTERNATIONAL OIL
COMPANIES (IOCs)
NATIONAL OIL
COMPANIES (NOCs)
93%
84%
84%
81%
78%
78%
78%
77%
75%
75%
72%
71%
71%
67%
67%
64%
61%
61%
61%
57%
45%
43%
41%
35%
32%
32%
32%
30%
29%
28%
28%16%
13%
9%
9%
0%
100%
100%
100%
94%
94%
88%88%
88%
88%
88%
88%
88%
88%
88%
81%
81%
81%
75%
75%
75%
75%
75%
75%
75%
75%
75%
75%
69%
63%
63%
56%
56%50%
50%
44%
44%
44%
38%
31%
25%
19%
19%
13%
0%
69%
54%
40%
38%
29%
25%
20%
18%
16%
15%
19%
15%
15%
14%
14%
13%
12%
12%
11%
10%
10%
8%
8%
6%
2%
1%
0%
The major results o our study are three company
rankings, one or each o these sections:
1. reporting on anti-corruption programmes
2. organisational disclosure
3. country-level disclosure
The rst section refects companies reporting on
their anti-corruption programmes according to the
Transparency International - UN Global Compact
Reporting Guidance on the 10th Principle against
Corruption. Organisational disclosure measuresreporting on companies organisational structure,
operations, partnerships and standards used or
published nancial accounts. Country-level disclosure
refects companies reporting on meaningul country-
level nancial and technical data related to their
international operations.
All results are presented as percentages o maximum
possible scores (scale: 0 to 100 per cent). Scores in
the report are rounded to the nearest whole number.
Where companies score the same they are listed
alphabetically. The average scores or the three
sections are: 43, 65 and 16 per cent, respectively.
The analysed sample includes:
44 major oil and gas producers
(20 international and 24 national oil companies)
Based in 30 home countries
Producing in 73 host countries
Coverage of global reserves: 60 per cent of oil and
55 per cent o natural gas
Coverage of global production: 60 per cent of oil
and 60 per cent o natural gas
33 globally important, large producers(Fortune Global 500 and/or Forbes Global 2000),
plus 11 locally important national oil companies,
mostly rom oil-dependent countries
6%
6%
BG
BHP Billiton
British Petroleum
Statoil
Eni
Exxon Mobil
Repsol YPF
Royal Dutch Shell
Hess
Nexen Inc.
OMV
Marathon Oil
Woodside
Conoco Phillips
Total
Petrobras
Chevron
Suncor
Talisman
Devon
Wintershall
Pemex
Rosnet
PetroChina
KPC
ONGC
Sinopec
Petronas
Qatar Petroleum
CNOOC
PDVSACNPC
KazMunaiGaz
Inpex
Lukoil
SaudiAramco
Gazprom,GEPetrol,
NIOC,NNPC,
SNPC,SOCAR,
Sonangol, Sonatrach
BG
BHP Billiton
ONGC
British Petroleum
Woodside
Chevron
Eni
KPC
Marathon Oil
OMV
PDVSA
Repsol YPF
Royal Dutch Shell
Conoco Phillips
Gazprom
Wintershall
Exxon Mobil
Hess
Inpex
KazMunaiGaz
Pemex
PetroChina
Rosnet
Sinopec
Sonangol
Statoil
Petrobras
Suncor
Total
Devon
TalismanLukoil
SOCAR
Nexen Inc.
Qatar Petroleum
Sonatrach
Petronas
CNOOC
SaudiAramco
CNPC
NIOC
SNPC
GEPetrol
NNPC
Statoil
Nexen Inc.
Talisman
Woodside
Marathon Oil
Repsol YPF
Eni
Hess
Petrobras
Conoco
Lukoil
OMV
Wintershall
British Petroleum
BHP Billiton
ONGC
Suncor
Devon
Total
Exxon Mobil
Royal Dutch Shell
BG
Chevron
KPC
Sonatrach
CNPC
CNOOC, GEPetrol, Inpex,
PetroChina, Petronas
Diagram 1Major results
*An additional ranking ordisclosure on domesticoperations can be oundin Annex 4.
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EXECUTIVE SUMMARY
Companies create value or their shareholders, but they should also share this value
transparently in the countries in which they work, to promote economic development.
There are three ways to promote air sharing through greater transparency. First,
sound, publicly disclosed anti-corruption programmes are essential to prevent
individuals rom misappropriating revenues. Second, value can be shared with
business partners, provided these relationships are ully disclosed and the operating
subsidiaries are made known to the public. Lastly, precise inormation about how
much revenue goes to state budgets and how much is retained by companies mustbe ully disclosed to the public.
The Promoting Revenue Transparencyproject aims to make revenues rom oil
and gas extraction transparent and, as a result, more benecial to the societies o
resource-rich countries. In order to achieve this goal, we have analysed 44 leading
global oil and gas producers, including both international oil companies (IOCs)
and national oil companies (NOCs),1 in terms o their reporting on anti-corruption
programmes, organisational disclosure and country-level disclosure. Our ndings are
intended to serve as a basis or improvement in corporate reporting by the sector,
towards enhancing the transparency and accountability o these revenues.
1. WHY TRANSPARENCYIN THE OIL AND GASSECTOR MATTERSOil and gas producers transer considerable unds
to host governments in the orm o license ees,
royalties,2 dividends, taxes and support or local
communities. These large nancial infows should
contribute substantially to social and economic
development, yet many resource-rich countries
have been unable to transorm resource wealth
into wellbeing.3 When revenues rom the extractive
sector are not managed with transparency and
accountability, mineral and petroleum wealth canuel large-scale corruption, as well as poverty,
injustice and confict. One o the explanations or this
phenomenon is that large revenue infows lead to
excessive rent-seeking.4
The question is how to make oil and gas revenues
work or societies and not against them. The
relevance o this question is strengthened by the act
that resource dependency is mostly a problem in
poorer regions.5
The combination o high revenues o the oil and gas
industry, high poverty levels in many oil-producing
countries and, nally, high corruption risk6 makes
transparency critical. Oil and gas rents7 can constitute
a powerul budgetary instrument whose proper use
is strongly dependent on government transparency
and accountability. This money can oster long-
term socioeconomic development, but it can also
be misused, or example, to extend the political and
economic power o a ruling elite. In a positive scenario,
governments could use oil and gas rents to support
education, healthcare, clean water supply, transportation
inrastructure, small-scale entrepreneurship or
even economic diversication which are all basic
conditions to lit people out o extreme poverty andoster long-term development. Citizens o resource-
rich countries should have the right to know how their
resources are managed, what income they bring and
how this income is allocated.
Exploitation o natural resources and the related
oreign direct investment also have an impact on local
communities. There are both opportunities and risks
related to such investments, which engage the labour
market, the environment and local social structures.
This is another important reason why inormation
transparency should be a basic principle in the
extractive sector.
Our study evaluates companies on several important
aspects o transparency. Why is each o these
aspects important? First, anti-corruption programmes
constitute the basic preventive anti-corruption
measure applied by companies. Evaluating public
reporting on programmes such as this is the only
way or civil society to know i such programmes are
in place. Such reporting demonstrates companies
public commitment to ghting corruption. Second,
we analyse organisational disclosure reporting on
relationships among companies, their subsidiaries
and their partners, as well as the adequacy o their
nancial statements. This is necessary or transparent
contracts and nancial fows both inside and outside
companies. Third, we analyse country-level disclosure
concerning both transers to governments and data
that gives an insight into value sharing between
host countries and companies. Such inormation is
necessary or communities, civil society organisations
and other stakeholders to monitor the management
o natural resources in their countries and to hold
their governments to account. Fourth, we examine
certain NOC-specic issues that are necessary or
transparency in the oil and gas sectors.
In our 2008 Promoting Revenue Transparency(PRT)
report, we recommended that home governments
and appropriate regulatory agencies should consider
introducing mandatory revenue transparency
reporting or the operations o companies at home
and abroad.8 The importance o such disclosure in
the extractive sector was recently acknowledged
by legislative changes in Hong Kong9 and in the US
(the Dodd-Frank nancial reorm legislation).10 When
the new regulations are implemented, they should
considerably enhance the overall transparency
o nancial fows to governments o oil and gas
producing countries. Speaking in support o the new
US law, Senator Richard Lugar said: Too oten, oilmoney intended or the nations poor ends up lining
the pockets o the rich The resource curse aects
us as well as producing countries. It exacerbates
global poverty which can be a seedbed or terrorism,
it empowers autocrats and dictators, and it can crimp
world petroleum supplies by breeding instability.11
Transparency International Promoting Revenue Transparency 5
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2. METHODOLOGY12
Our report ocuses on companies and their eorts to
increase transparency and ght corruption, as well
as their contribution to disclosing nancial and other
fows to host governments. We analyse 44 major
oil and natural gas producers rom 30 countries.
We also analyse their country-level disclosure in all
countries within their upstream production,13 which
totalled 73 at the time o data collection. Our sample
covers about 60 per cent o proved global oil reserves
and more than 60 per cent o global oil production.
Concerning natural gas, analysed companies cover
about 55 per cent o proved global reserves and
nearly 60 per cent o global production.14
The major results o the analysis are three separatecompany rankings, one or each o the sections:
reporting on anti-corruption programmes,
organisational disclosure and country-level disclosure.
No combined cross-section score or ranking has
been calculated because we ound such results o
low inormative value, as there is little correlation
among the results o dierent sections.15 All data was
collected through desk research based exclusively
on publicly available inormation or documents.16
Preliminary data was shared with companies, and 24
o the 44 companies made a thorough data review.
We made no judgment on the levels o integrity o
companies practices; our evaluation is only based on
disclosed relevant inormation.
The questionnaire contains 51 questions ocusing on
the corporate inormation fow.17 The questions are
organised into our sections:
SECTION 1.Reporting on anti-corruptionprogrammes (questions 1-28)
The rst section ollows the elements o Transparency
International UN Global Compact (UNGC) Reporting
Guidance on the 10th Principle against Corruption.18
The questions reer to reporting on dierent elements
o anti-corruption programmes, including policies,
management systems and perormance. Since the
evaluation is based on reporting, some companies
might under-report but perorm well, while some
good reporters may not perorm as well as they imply.
SECTION 2.Organisational disclosure(questions 29-36)
The second section includes a set o questions
ocusing on companies subsidiaries, partners and
elds o operations. It also asks about the reliability o
companies accounts (applied accounting standards
and independent audit). All questions in this section
ocus on perormance.
SECTION 3.Country-level disclosure(questions 37-46)
This section asks about a limited set o operatingand nancial data, including money transers to host
governments. For each company, the entire set o
questions is asked separately or each country within
its upstream producing activities. The score or each
question in this section, thereore, is a score or
average country reporting.19 All questions ocus on
perormance.
Our set o questions on country-level disclosure
embraces a broader spectrum o data than Extractive
Industries Transparency Initiative (EITI) reporting
or what is required by the recently passed US
legislation.20 In addition to transers to governments,
we ask or certain operating data (reserves and
production) and certain data rom prot-and-loss
(P&L) accounts all on a country-by-country basis.
The intention behind this is to address a broader
range o questions related to revenue transparency
in the sector. One issue is to keep a record o money
transers to governments, and another is to allow civil
society organisations to nd out the value-sharing
rules applied in their countries. They should have
access to inormation about how value generated in
extractive industries is shared between governments
(societies) and companies.
SECTION 4.NOC-specifc(questions 47-51)
Questions in the ourth section apply only to the
24 NOCs in the sample. Not all o these questions
apply to all NOCs, because some imply companies
engagement in certain quasi-governmental activities.
However, this is not always the case.
The rst two sections ocus on corporate preventive
eorts aimed at increasing transparency and ghting
corruption within their corporate structures, while
the other two ocus on corporate contribution to the
disclosure o fows to host governments.
Each question was scored individually, and or each
o the rst three sections the total scores were
calculated.21 For Sections 1 and 2, these were the
simple sums o scores; or Section 3, or each country
o operations a simple sum o scores or questions
37 to 46, and then the average among all such sums
was calculated. The NOC-specic questions (Section
4) were evaluated separately with no general ranking.
3. MAJOR FINDINGSCompany rankings or Sections 1, 2 and 3 are
presented in Diagram 1.22 The major ndings are
summarised below.
REPORTING ON ANTI-CORRUPTIONPROGRAMMES
More and more, oil and gas companies are adopting
and making publicly available anti-corruption
programmes, the content o which is becoming
increasingly similar. Nevertheless, there is a
considerable group o companies, mostly non-listed23
NOCs that still do not publish their anti-corruption
codes, policies or measures.
Based on our review o publicly available inormation,
there are several important elements o anti-corruption
programmes that appear to be rarely implemented by
companies: the prohibition o acilitation payments,
anti-corruption training or business partners or
reporting on corruption-related incidents.
On average, IOCs report considerably better than
NOCs (see Diagram 1).
ORGANISATIONAL DISCLOSURE
Public disclosure o partnerships and subsidiaries,
including their countries o incorporation, are key
elements o organisational disclosure. The average
results in this section are relatively high. The domination
o IOCs over NOCs is less obvious than in section
1, as European and North American companies
are reluctant to reveal their partners in upstream
operations; the latter also do not disclose much
inormation on their non-consolidated subsidiaries.
COUNTRY-LEVEL DISCLOSURE
Country-level disclosure on international operations
has improved since the rst PRT report was released.
Reporting on production levels has become a broadly
accepted standard (an average score o 71 per cent)
and there are examples o good disclosure or each
remaining type o data. There were positive signals rom
several companies that intend to increase their country
-level reporting soon. This promising trend should be
strengthened by the recently passed US legislation.
Nonetheless, in spite o this positive trend, country-
level disclosure on international operations remains
very weak; it received the lowest average score
among all sections. Concerning governmental
transers and P&L data, many companies do not
disclose any such inormation, and the averagescores ranged rom 4 to 20 per cent.
The host country environment itsel cannot be
exclusively blamed or poor disclosure. In the
same host countries, oten described as dicult
environments, some companies disclose extensive
inormation, while others disclose only very sparse
inormation or none at all.
The average score or country-level disclosure on
international operations was almost twice as high
or IOCs as or NOCs. Concerning disclosure on
domestic operations, NOCs perormed better than
IOCs, supplying 9 o the top 10.
NOC-SPECIFIC ISSUES
Public listing and independence rom quasi-
governmental unctions (those perormed on behal o
the government) are the major actors dierentiating
NOC perormance. Listed NOCs with no quasi-
governmental unctions perorm the best in all
evaluated sections.
Since the rst PRT report was published in 2008,
there has been considerable progress in corporatereporting by NOCs. Eleven companies have begun
publishing corporate documents, including their anti-
corruption programmes such as codes o conduct
and sustainability reports, as well as annual reports.
REGIONAL PERFORMANCE
Regional perormance is mixed, though IOC-
dominated regions (Australia, Europe and North
America) lead in most rankings.
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Companies rom IOC-dominated regions perorm
the best in terms o reporting on anti-corruption
programmes and country-level disclosure o
international operations. On organisational disclosure,
Latin American companies perorm better than those
rom North America. Also, CIS-based companies
come very close to the leaders.
EITI SUPPORT AND TRANSPARENCY
For NOCs, EITI support correlates positively with
perormance in all evaluated sections. For IOCs,
this is the case only or reporting on anti-corruption
programmes and organisational disclosure, while or
country-level disclosure the correlation is negative.
TOP PERFORMERS
Repsol is the only company that reached the top 10
or all three major rankings. Eight companies scored
above average in all three rankings: Conoco, Eni,
Hess, Marathon, Petrobras, Repsol, Statoil, and
Woodside. All o them support the EITI.
4. KEY POLICYRECOMMENDATIONSWe have ormulated several major recommendations
on the basis o our analysis and resulting conclusions.
They concern diverse parties: companies, public
bodies and the investor community.
FOR ALL COMPANIES:
1. Detailed anti-corruption programmesshould be publicly available
We strongly recommend that companies review their
reporting on anti-corruption programmes accordingto the TI - UNGC Reporting Guidance on the 10th
Principle against Corruption. Several companies
already meet the criteria, except or independent
external assurance (D1524). Nonetheless, most
companies do not ollow the guidance, and their
publicly available documents on anti-corruption
programmes lack many key elements.
Some companies still do not make their codes o
conduct publicly available. We strongly recommend
that all such documents be published on websites,
with no password protection.
2. Companies should undertakevoluntary independent assurance oanti-corruption programmes
No company reviewed in this PRT project reported
on independent assurance o its anti-corruption
programme.
Corruption is a major risk actor o concern or
companies and their stakeholders. We encourage
companies to undertake voluntary independent
assurance along the lines o the TI Framework
or Voluntary Independent Assurance. Such a
practice would assist companies in ormulating and
implementing proper programmes, while providing
an objective and comparable assessment o a
companys anti-corruption eorts.
3. Companies should publish detailso their subsidiaries and felds ooperations
Companies should make public details o their
subsidiaries, both ully and non-ully consolidated,
including subsidiaries countries o incorporation and
parent companies interests. The same should hold
or inormation on companies elds o operations,
their interests and partners.
All such inormation should be clearly stated and
easily accessible on the companies websites.
Stakeholders should be able to easily trace the
connections between diverse companies, the division
o responsibilities and interests, and consequently the
possible routes o nancial fows.
4. Oil and gas companies shouldincrease their reporting on a country-by-country basis
Very ew companies report substantial inormation
on a country-by-country basis. However, some
companies already recognise the importance o such
reporting and provide broad voluntary country-level
disclosure, which shows that they do not see it as a
competitive disadvantage. Country-level reporting is
an inherent part o true transparency, and necessary
to assure good management o natural resources.
Companies country-by-country reporting should
include transers to governments (direct and indirect),
basic operating data and key elements o prot-and-
loss accounts. This data should allow stakeholders
to trace how value is s hared and how unds fow
between companies and governments. Both
elements are necessary or good management o
natural resources.
5. Companies should join the ExtractiveIndustries Transparency Initiative
The Extractive Industries Transparency Initiative (EITI)
oers a simple mechanism to ensure the systematic
disclosure and dissemination o inormation on payments
and revenue rom mining and oil and gas. Thereore
companies should join the EITI as a way to promote
both corporate and government transparency.
6. Companies should create andmaintain active corporate websites
Public inormation can be most easily and
inexpensively accessed on the Internet. Thereore
a corporate website is an ideal repository or
inormation on a company. However, corporateinormation is oten spread throughout dierent web
pages, databases and libraries, making it almost
impossible or an independent stakeholder to access
key inormation within a reasonable amount o time.
We believe that i a company truly intends to make
its inormation publicly available, it should maintain
an inormative, user-riendly and updated website.
All corporate documents and publications should be
directly downloadable, particularly annual reports,
stock exchange llings, social responsibility reports
and corporate codes o conduct. All externally
published inormation relevant or the company
(i.e. EITI reports rom countries where a company
participates in the initiative) should either be on its
website or linked to it. The website should include
active contact inormation or any member o the
public interested in urther inormation. Each corporate
website should have an English version, which allows
or global comparisons and analyses that can be
urther used by local NGOs and other stakeholders.
It is important or websites to be regularly updated,
including media releases and all published data.
FOR NOCS:
7. All NOCs should introduceinternationally or generally acceptedaccounting standards, as well asindependent auditing o their accounts
A number o non-listed NOCs still do not publish
their accounts in line with internationally or generally
accepted accounting standards, others do not
reveal the standards they use, and some do not
undergo independent auditing. Accordingly, even i
they publish their nancial and operating reports, it is
dicult to judge the quality and comparability o the
data against international standards.
8. The relationships between homegovernments and NOCs should be clearand publicly disclosed
NOCs hold special positions because governments
are their controlling owners. This infuences not only
competition in the extractive market but also the
transparency o public nancial fows and company
governance.
The rules that regulate relations between
governments and NOCs must be very careully set
and publicly known. All quasi-governmental unctions
o NOCs, i any, must be reported because they
concern the management o public resources, which
should be perormed or the public good.
Even though non-listed NOCs are not regulatedby stock exchanges, they should be accountable
to their stakeholders, just as listed companies are
accountable to their investors.
FOR PUBLIC BODIES:
9. The European Union shouldamend relevant legislation to requireEU-registered companies to reporton their operations on a country-by-country basis
In July 2010 the US Congress passed the Dodd-
Frank Wall Street Reorm and Consumer Protection
Act, which requires all companies registered with
the US Securities and Exchange Commission to
publicly report on a country-by-country basis their
payments to governments related to the extraction
o hydrocarbons and minerals. This important
piece o legislation is in line with one o the major
recommendations o the 2008 PRT report.
We encourage EU authorities to ollow this example
and additionally to extend required country-by-country reporting to operating and key P&L data. This
should allow or the monitoring o both money fows
and value-sharing processes.
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10. All governments that are home tooil and gas producers should requirecompanies to report on their operationson a country-by-country basis
We strongly encourage governments, including the
US, to ollow up on and broaden the spectrum o
required country-by-country reporting. Companies
should report not only on their gover nmental transers
but also on their operations and key P&L elements.
11. Stock exchanges should enorceregulations providing or country-levelreporting
We strongly encourage all major stock exchangesto enorce appropriate requirements and regulations
aimed at providing more country-level reporting by
companies, primarily among producers o natural
resources. Such inormation should include transers
to governments, basic operating data and key
elements o prot-and-loss accounts.
Stock exchanges have to be transparent in order to
ensure a publicly accountable and ecient market.
Each step toward increasing the level o transparency
decreases the level o unoreseen risk and
consequent excessive volatility. Any such regulation
would have a double positive eect directly orcing
companies to engage in better disclosure, and
indirectly lowering the risk o investors decisions.
FOR THE INVESTOR COMMUNITY:
12. International rating agenciesand risk analysts should includetransparency measures in their riskevaluation models
Corruption constitutes a major risk or companies
and their stakeholders. Anti-corruption programmes,organisational transparency and country-level revenue
transparency can lower the risk o corruption. This is
especially true or industries that are highly vulnerable
to corruption. A thorough risk analysis should
thereore include a corruption risk assessment.
We strongly encourage all rating agencies and risk
analysts to include corporate transparency measures
in their risk evaluation models. Sound anti-corruption
programmes and transparent reporting should become
necessary standards or highly rated companies.
13. The International AccountingStandards Board should requirecompanies to report key inormation ona country-by-country basis
The International Accounting Standards Board (IASB)
should complete its work on new nancial reporting
standards to require extractive companies to report
country-by-country data on reserves, volumes,
key P&L elements, as well as benet streams
to governments. This inormation is valuable or
investors as well as o r the governments and citizens
o resource-producing countries. A new international
accounting standard or the extractive companies
has become all the more essential since the passage
o the 2010 Wall Street Reorm and Consumer
Protection Act in the US. This reorm would also
help standardise reporting between international and
domestic companies, and thus level the playing eld.
14. Corporate responsibility indicesshould include reporting on anti-corruption programmes, organisationaldisclosure and country-level disclosure
Transparency and accountability are important
elements o corporate responsibility. This is especially
true or the extractive industries, where transparency
and accountability lead to better management o natural
resources, which is particularly critical in poor countries.
Accordingly, we recommend that all three elements
o corporate transparency be included in corporate
responsibility indices: reporting on anti-corruption
programmes, organisational disclosure and country-
level disclosure.
Flickr/Robert Galloway
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RESULTS OF THE ANALYSIS
1. GENERAL RESULTSThe analysis o collected data led to very dierent results or each analysed section.
On average, companies perormed relatively well on organisational disclosure, worse
on reporting on anti-corruption programmes and very poorly on country-level disclosure.
For organisational disclosure, the average score was 65 per cent, with only one
company scoring zero. For reporting on anti-corruption programmes, the average
score was 43 per cent; this section had the highest number o zero-scoring
companies, with eight evaluated companies awarded no points or their reporting on
anti-corruption programmes. For country-level disclosure, we evaluated international
and domestic operations separately. Disclosure on international operations wasevaluated or only 31 out o 44 companies, because 13 companies do not produce
hydrocarbons abroad. The average score was 16 per cent, with ve companies
scoring zero. For domestic operations (calculated or all 44 companies), the results
were considerably better; the average score was 53 per cent, with our companies
scoring zero. No company scored zero in all o the rst three sections.
The last section, with ve NOC-specic questions, resulted in a very complex picture
o this group. The NOCs constitute a heterogeneous group, requiring case-by-case
analysis. The major dierentiating actor among these companies was their public
listing on a stock exchange. Accordingly, we divided NOCs into three groups: publicly
listed NOCs, NOCs with listed major upstream subsidiaries, and non-listed NOCs.
Using the division between IOCs and NOCs, as well as the NOC-grouping according
to their listing status, we checked or relative average perormance o each relevant
company group (see Diagram 3). IOCs were the only group scoring above average
in all three sections. Listed NOCs achieved above-average results on organisational
disclosure and country-level disclosure. The remaining NOCs, both those with listed
subsidiaries and those that are non-listed, underperormed signicantly in all three
sections.
Another interesting nding was how NOCs and IOCs perormed depending on their
EITI support. Both NOCs and IOCs who support the EITI outperormed the average
in all three sections. Non-EITI supporter IOCs underperormed on organisational
disclosure, but surprisingly they perormed better than EITI-supporter IOCs on
country-level disclosure. Non-EITI supporter NOCs underperormed in all the
sections. EITI support coincides with better perormance or NOCs, while the eectis mixed or IOCs.
Diagram 2General resultsin section 1, 2 and 3
Each point illustratesone company
100%
80%
60%
40%
20%
0%
Diagram 3Relative perormanceIOCs and NOC-groups
Perormance measuredas relative to the averageo each section(sample average =1)
Diagram 4Relative perormanceNOCs vs. IOCs andEITI-support vs.Non-support
Perormance measuredas relative to the averageo each section(sample average =1)
ABOVE AVERAGE
BELOW AVERAGE IOCs
listed NOCs NOCs with
listed
subsidiaries
non-listed
NOCs
NOCs EITI IOCs
non-EITI
IOCs EITI
NOCs
non-EITI
ORGANISATIONAL
DISCLOSURE
REPORTING ON ANTI-
CORRUPTION PROGRAMME
COUNTRY-LEVEL DISCLOSURE
(INTERNATIONAL OPERATIONS)
ABOVE AVERAGE
BELOW AVERAGE
SAMPLE
SAMPLE
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REPORTING ONANTI-CORRUPTIONPROGRAMMES
43%AVERAGE SCORE
93%HIGHEST PERFORMING:
BG
0%WORST PERFORMING:GAZPROM, GEPETROL,NIOC, NNPC, SNPC, SOCAR,
SONANGOL, SONATRACH
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2. REPORTING ON ANTI-CORRUPTIONPROGRAMMES (SECTION 1)The average score or all 44 analysed companies in the reporting on anti-corruption
programmes section was 43 per cent. The standard deviation25 o the sample was 31
per cent. IOCs perormed much better than NOCs, achieving an average score o 68
per cent compared to only 22 or NOCs.
The highest-perorming company was BG, with a score o 93 per cent. It missed only
2 points on question 28 regarding the exter nal audit o anti-corruption programmes
(no company scored positively on this question), and 0.5 points or question 11 (BG
scored 1 out o 1.5 points), which should be awarded or additional disclosure o
the procedures and controls to enorce the policy that orbids acilitation payments
(although many companies scored positively on question 11 or the prohibition o
acilitation payments, no company was awarded these additional 0.5 points).
The worst perorming companies were eight NOCs: Gazprom, GEPetrol, NIOC,
NNPC, SNPC, Sonangol, Sonatrach and SOCAR, which scored zero or the entire
section. In some cases we received inormation rom the companies that they had
internal codes o conduct that included numerous elements required in this section.
Some companies even provided us with relevant copies. However, none o these
documents are publicly available, so we could not give any points or this inormation.
We strongly encourage these companies to publicly disclose their codes o conduct
and other similar corporate regulations concerning anti-corruption programmes on
their corporate websites. Such disclosure demonstrates public commitment to anti-
corruption and allows stakeholders to access relevant inormation.26
Diagram 5Reporting on anti-corruption programmes- results by company
BG
BHP
BP
Statoil
Eni
Exxon
Repsol
Shell
Hess
Nexen Inc.
OMV
Marathon
Woodside
Conoco
Total
Petrobras
Chevron
Suncor
Talisman
Devon
Wintershall
Pemex
Rosnet
PetroChina
KPC
ONGC
Sinopec
Petronas
QatarPet
CNOOC
PDVSA
CNPC
KazMG
Inpex
Lukoil
SaudiAramco
Gazprom, GEP,
NIOC, NNPC,
SNPC, SOCAR,
Sonangol, Sonatrach
93%
84%
84%
81%
78%
78%
78%
77%
75%
75%
72%
71%
71%67%
67%
64%
61%
61%
61%
57%
45%
43%
41%
35%
32%
32%
32%
30%
29%
28%
28%
16%
13%
9%
9%
6%
0% AVERAGE = 43%
IOCs
NOCs
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REPORTING ON ANTI-CORRUPTIONPROGRAMMES AND EITI SUPPORT
O the 44 companies evaluated, 18 support EITI. Among them, all except Qatar
Petroleum have submitted an EITI-compliant sel-assessment orm. This EITI
supporter group scored on average 70 per cent (st. dev. 15 per cent). The group o
non-EITI supporters includes six IOCs and 20 NOCs, and their average score was 24
per cent (st. dev. 24 per cent). The dierence in scores between EITI supporters and
non-supporters was very similar to the dierence between IOCs and NOCs, although
the groups had dierent members.
When testing IOCs and NOCs separately or EITI support, it emerges that among
IOCs, EITI supporters score an average o 75 per cent, compared to 53 or non-EITI
supporters. Among NOCs, EITI supporters achieved an average score o 54 per cent,
while non-EITI supporters scored only 15 per cent. NOCs that support the EITI score,
on average, about the same (negligibly higher) as IOCs that do not support the EITI. I
there were no points awarded or question 26 (regarding EITI support), all companies
scoring zero or the entire section (NOCs only) would still be non-EITI supporters.
In summary, the positive correlation between EITI support and reporting on anti-
corruption programmes is much stronger or NOCs than or IOCs.
Diagram 6Reporting on anti-corruption programmesEITI-supporters vs. non-supporters
Average or all companies is 43%
IOCs NOCs
BG
BHP
BP
Statoil
Eni
Exxon
Repsol
Shell
Hess
Marathon
Woodside
Conoco
Total
Petrobras
Chevron
Talisman
Pemex
QatarPet
Nexen Inc.
OMV
Suncor
Devon
Wintershall
Rosnet
PetroChina
KPC
ONGC
Sinopec
Petronas
CNOOC
PDVSA
CNPC
KazMG
Inpex
Lukoil
SaudiAramco
Gazprom,
GEPetrol, NIOC,
NNPC, SOCAR,
Sonangol,
Sonatrach, SNPC
AVERAGE = 70% AVERAGE = 24%
93%
84%
84%
81%
78%
78%
78%
77%
75%
71%
71%
67%
67%
64%
61%
61%
43%
29%
75%
72%
61%
57%
45%
41%
35%
32%
32%
32%
30%
28%
28%
16%
13%
9%
9%
6%
0%
NOCS PERFORMANCE IN REPORTINGON ANTI-CORRUPTION PROGRAMMES
NOCs constitute the majority o our sample, and because o their diversity they
deserve additional analysis relevant to their most dierentiating eatures. One such
eature, which emerged as relevant or companies perormance on their reporting on
anti-corruption programmes, is public listing on a stock exchange.
Among the 24 analysed NOCs, seven are publicly listed companies, ve have listed
major subsidiaries, and the remaining 12 are ully state-owned with no listed major
subsidiaries. The perormance o each NOC s ubgroup diered. Listed NOCs scored
an average o 37 per cent; NOCs with listed major subsidiaries scored 24; and non-
listed NOCs scored only 11. Public listing on a stock exchange is accompanied by
better reporting on anti-corruption programmes.
Another tested eature was the internationality o production. Among the 24 analysed
NOCs are 13 single-country producers and 11 multi-country producers. The latter
perormed much better regarding their reporting on anti-corruption programmes, withan average score o 33 per cent, while single-country producers scored only 15 per cent.
One possible explanation is that global presence osters the adoption o global standards.
Another is that in a globally operating company, public access (i.e. through a website) to
some internally set standards is the most practical way to introduce them to all employees.
Diagram 7Reporting on anti-corruptionprogrammes. Perormance o NOCs- listed vs. non-listed companies
Average or all NOCs is 22%
LISTED NOCs WITH LISTED SUBSIDIARIES NON LISTED
Statoil
Petrobras
Rosnet
PetroChina
ONGC
Inpex
Gazprom
Sinopec
Petronas
CNOOC
CNPC
KazMG
Premex
KPC
QatarPet
PDVSA
Saudi
Aramco
GEPetrol,
SOCAR,
Sonangol,
Sonatrach,
SNPC, NIOC,
NNPC
AVERAGE = 37%
AVERAGE = 24% AVERAGE = 11%
81%
64%
41%
35%
32%
9%
0%
32%
30%
28%
16%
13%
43%
32%
29%
28%
6%
0%
EITI SUPPORTERS NON-EITI SUPPORTERS
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Diagram 8Reporting on anti-corruptionprogrammes. Perormance o NOCs- one vs. multi-country producers
Average or all NOCs is 22%
SINGLE-COUNTRY PRODUCERS MULTI-COUNTRY PRODUCERS
Pemex
Rosnet
Sinopec
QatarPet
PDVSA
KazMG
SaudiAramco
Gazprom,
NIOC, NNPC
SNPC, SOCAR,
Sonangol
Statoil
Petrobas
PetroChina
KPC
ONGC
Petronas
CNOOC
CNPC
Inpex
GEPetrol,
Sonatrach
AVERAGE = 15%
AVERAGE = 33%
43%
41%
32%
29%
28%
13%
6%
0%
81%
64%
35%
32%
32%
30%
28%
16%
9%
0%
REGIONAL PERFORMANCE IN REPORTING ONANTI-CORRUPTION PROGRAMMES (BY HOME REGION)
Home jurisdiction also plays a role in shaping companies reporting. In our sample,
there are two Australian companies, nine European, nine North American, three Latin
American, seven Asian, our Middle Eastern, ve rom CIS countries and ve Arican.27
The division between NOCs and IOCs is, to a high degree, consistent with
geographical division (by home country). Australia, North America and Europe are
IOC regions, while Latin America, Asia, the Middle East, CIS and Arica are NOC
regions. The only exceptions to this rule are one European NOC (Statoil) and one
Russian IOC (Lukoil), but the perormance o both Statoil and Lukoil is closer to their
regional averages than to the IOC/NOC averages.28
One o the most striking results o the regional analysis is the varied perormance
o NOCs depending on their home region. Statoil outperorms all other continental
European companies. The average score o Latin American NOCs is higher than the
average score o the s ample, while all Arican companies scored zero.
The least consistent regional group is CIS, in which the standard deviation o the
sample is higher than its average. Scores in this group range rom zero or SOCAR
and Gazprom, to 41 per cent or Rosnet. The large dierence between Rosnets
and Gazproms scores is o particular interest, as both companies are publicly listed,
Russian NOCs. A possible explanation is that Gazprom has certain anti-corruption
programmes in place, but they are not publicly disclosed.
Diagram 9Reporting on anti-corruptionprogrammes. Perormance by region
Average or all companies is 43%
*Pemex included in Latin America
80%
60%
40%
20%
0%
Australia Europe USA+Can Latin America* Asia Middle East CIS Arica
IOCs
NOCs
ST. DEV.
78%74%
81%
67%
45%
26%
17%
9%
13%
0%
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ORGANISATIONALDISCLOSURE
65%AVERAGE SCORE
100%HIGHEST PERFORMING:
BG, BHP, ONGC
0%WORST PERFORMING:NNPCorge Osodi / Panos
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3. ORGANISATIONAL DISCLOSURE(SECTION 2)The average result or the 44 analysed companies in the organisational disclosure
section was 65 per cent. The standard deviation o the sample was 27 per cent. IOCs
generally perormed better than NOCs, averaging 78 vs. 55 per cent. The dierence
between these groups was much smaller than in the rst section (reporting on anti-
corruption programmes).
Three companies obtained the maximum possible score or this section: ONGC, BHP
and BG. Only one company, NNPC, scored zero.
Diagram 10Organisational disclosure- results by company
IOCs
NOCs
BG
BHP
ONGC
BP
Woodside
Chevron
Eni
KPC
Marathon
OMV
PDVSA
Repsol
Shell
Conoco
Gazprom
Wintershall
Exxon
Hess
Inpex
KazMG
Pemex
PetroChina
Rosnet
Sinopec
Sonangol
Statoil
Petrobras
Suncor
Total
Devon
Talisman
Lukoil
SOCAR
Nexen Inc.
QatarPet
Sonatrach
Petronas
CNOOC
SaudiAramco
CNPC
NIOC
SNPC
GEPetrol
NNPCAVERAGE = 65%
100%
100%
100%
94%
94%
88%
88%
88%
88%
88%
88%
88%
88%
81%
81%
81%
75%
75%
75%
75%
75%
75%
75%
75%
75%
75%
69%
63%
63%
56%
56%
50%
50%
44%
44%
44%38%
31%
25%
19%
19%
13%
6%
0%
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ORGANISATIONAL DISCLOSURE AND EITI SUPPORT
The group o 18 EITI supporters scored an average o 80 per cent in the second
section o the questionnaire (st. dev. 15 per cent), while the group o non-EITI
supporters averaged 55 per cent (st. dev. 29 per cent). Like with the r st section, the
dierence in scores between EITI supporters and non-supporters was very similar to
the dierence between IOCs and NOCs.
Testing IOCs and NOCs separately or EITI support, it emerges that among IOCs that
support the EITI, the average score or the second section is 84 per cent, vs. 64 or
non-EITI supporters. Among NOCs, EITI supporters averaged 66 per cent, while non-
EITI supporters scored 53. Like with the rst section, EITI-supporting NOCs perorm
comparably to non-EITI supporting IOCs.
Diagram 11Organisational disclosure
EITI-supporters vs. non-supporters
Average or all companies is 43%
IOCs NOCs
EITI SUPPORTERS NON-EITI SUPPORTERS
BG
BHP
BP
Woodside
Chevron
Eni
Marathon
Repsol
Shell
Conoco
Exxon
Hess
Pemex
Statoil
Petrobas
Total
Talisman
QatarPet
ONGC
KPC
OMV
PDVSA
Gazprom
Wintershall
Inpex
KazMG
PetroChina
Rosnet
Sinopec
Sonangol
Suncor
Devon
Lukoil
SOCAR
Nexen Inc.
Sonatrach
Petronas
CNOOC
SaudiAramco
CNPC
NIOC
SNPC
GEPetrol
NNPC
AVERAGE = 80%
AVERAGE = 55%
100%
100%
94%
94%
88%
88%
88%
88%
88%
81%
75%
75%
75%
75%
69%
63%
56%
44%
100%
88%
88%
88%
81%
81%
75%
75%
75%
75%
75%
75%
63%
56%
50%
50%
44%
44%38%
31%
25%
19%
19%
13%
6%
0%
NOCS PERFORMANCE ON ORGANISATIONAL DISCLOSURE
We tested whether there is a relationship between companies perormance on
organisational disclosure and their public listing status on stock exchanges.
Publicly listed companies achieved an average score o 79 per cent, NOCs with
listed subsidiaries 48, and non-listed NOCs 44. Public listing o companies is
accompanied by a higher level o organisational disclosure, which is primarily
related to legal reporting requirements.
We also tested the relationship between the internationality o production (one- vs.
multi-country producers) and companies perormance on organisational disclosure.
The test showed there is no considerable dierence in perormance based on
internationality o production, and among NOCs, single-country producers and
multi-country producers achieve similar scores.
Diagram 12Organisational disclosurePerormance o NOCslisted vs. non-listed companies
Average or all NOCs is 55%
LISTED NOCs WITH LISTED SUBSIDIARIES NON LISTED
ONGC
Gazprom
Inpex
PetroChina
Rosnet
Statoil
Petrobras
KazMG
Sinopec
Petronas
CNOOC
CNPC
KPC
PDVSA
Pemex
Sonangol
SOCAR
QatarPet
Sonatrach
SaudiAramco
NIOC
SNPC
GEPetrol
NNPC
AVERAGE = 79%
AVERAGE = 48%
AVERAGE = 44%
100%
81%
75%
75%
75%
75%
69%
75%
75%
38%
31%
19%
88%
88%
75%
75%
50%
44%
44%
25%
19%
13%
6%
0%
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RESULTS BY HOME REGION
In the section on organisational disclosure, regional dierences are smaller than in
the section on reporting on anti-corruption programmes. Also, the division between
better-perorming IOC-dominated regions vs. worse-perorming NOC-dominated
regions does not hold. Latin American companies and NOCs rom the CIS region
perorm better on average than Northern American companies. In each regional
group at least one company scores above the total sample average.
The section on organisational disclosure tested companies on eight questions.
Two concerned the reliability o accounts, asking about external audit and applied
accounting standards (questions 35 and 36). All companies scoring zero on one
or both o these questions were NOCs rom NOC-dominated regions (Asia, Arica,
Middle East and CIS). Such companies accounts, even i publicly available, lack
comparability against international standards, and their quality is dicult to judge.29
The remaining six questions concentrated on the disclosure o subsidiaries and
upstream operations. Such inormation should be publicly available or stakeholdersto reveal the connections between diverse companies, the division o responsibilities
and interests, and consequently the possible routes o nancial fows.30 Questions 29,
31 and 33 asked about the disclosure o consolidated subsidiaries, non-consolidated
subsidiaries and upstream elds o operations respectively (including names and
percentages o ownership/interest). Questions 30 and 32 asked about the disclosure
o countries o incorporation o companies' consolidated and non-consolidated
subsidiaries, while question 34 asked about partners in upstream elds o operations
(including their percentages o interest).
For these six questions we tested regional perormance, separately, or each o
them. Australia leads on all six questions, while other regions perormance is
more question-dependent. The weak point or European companies is question
34, regarding partners and their interests in upstream elds o operations. North
American companies on average revealed little inormation on their non-consolidated
subsidiaries and partners. Latin American companies (which perorm very well in
the entire category) were the weakest on question 32 regarding non-consolidated
subsidiaries countries o incorporation. For CIS countries, reporting on countries
o incorporation o both consolidated and non-consolidated subsidiaries is very
poor. Middle Eastern and Asian companies have relatively good reporting on their
subsidiaries, while Arican companies reveal more inormation about their partners
than, or example, European companies.
Some companies disclose their subsidiaries and countries o incorporation but do
not report their percentage o interests in such companies. As a result, some regions
score higher on question 30 regarding countries o incorporation o consolidated
subsidiaries than on question 29 regarding naming consolidated subsidiaries anddisclosing companys interests in each o them (i.e. Northern American companies,
see Diagram 14).
Diagram 13Organisational disclosureperormance by region
Average or all companies is 65%
*Pemex included in Latin America
80%
60%
40%
20%
0%
Australia Europe Latin America* North America CIS Asia Middle East Arica
IOCs
NOCs
ST. DEV.
Diagram 14Organisational disclosureresults by region/question
*Pemex included in Latin America
97%
86%
75%77%
69%
50%
70%
59%
44%
28%
QUESTION 29
CONSOLIDATED SUBSIDIARIES
Australia
Europe
Latin America*
Asia
Middle East
North America
CIS
AricaAVERAGE = 83%
100%
100%
100%
93%
88%
78%
70%
40%
Australia
Europe
Asia
Middle East
CIS
Latin America*
North America
Arica
QUESTION 31
NON-CONSOLIDATED SUBSIDIARIES
AVERAGE = 69%
100%
94%
79%
75%
70%
67%
44%
40%
QUESTION 33
FIELDS OF OPERATION
AVERAGE = 77%
Australia
Latin America*
Europe
North America
CIS
Asia
Middle East
Arica
100%
100%
94%
94%
90%
50%
50%
40%
Australia
Latin America*
Europe
North America
Asia
CIS
Middle East
Arica AVERAGE = 61%
QUESTION 30 - COUNTRIES
OF INCORPORATION
(CONSOLIDATED SUBSIDIARIES)
100%
100%
89%
89%
43%
40%
25%
0%
Australia
Europe
Asia
Middle East
North America
CIS
Arica
Latin America*
AVERAGE = 38%
QUESTION 32 - COUNTRIES
OF INCORPORATION
(NON-CONSOLIDATED SUBSIDIARIES)
100%
83%
43%
25%
22%
20%
0%
0%
QUESTION 34 - PARTNERS
IN FIELDS OF OPERATION
AVERAGE = 32%
Australia
CIS
Latin America*
Asia
North America
Arica
Europe
Middle East
75%
60%
50%
36%
28%
20%
17%
13%
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COUNTRY-LEVELDISCLOSURE
16%AVERAGE SCORE
69%HIGHEST PERFORMING:
STATOIL
0%WORST PERFORMING:CNOOC, GEPETROL, INPEX,PETROCHINA, PETRONAS
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4. COUNTRY-LEVEL DISCLOSURE(SECTION 3)The section on country-level disclosure evaluates companies based on their reporting
o nancial data, transers to governments and operating data on a country-by-
country basis. Our sample includes 31 multi-country producers and 13 single-
country producers; all o the latter are NOCs producing oil and/or gas exclusively in
their home countries. For single-country producers, reporting on their country-level
operations is equal to their overall reporting and thereore only partially comparable to
country-by-country reporting o international producers. Moreover, most multi-country
producers apply higher reporting standards or their home operations than or their
international operations. Creating one company ranking, including data on both home
and international operations, would give an unintended comparative edge to single-
country producers.31 Thereore, we decided to ocus on the oreign operations o
analysed companies and calculate the ranking based on average country disclosureor international upstream production. This evaluation is only relevant or 31 multi-
country producers (see Diagram 15). In Annex 4, we include the supplementary
analysis o disclosure on domestic operations.32
The average score or country-level disclosure on international operations or 31
analysed companies was 16 per cent (standard deviation o 16 per cent).33 This was
the lowest average score among all the sections, and the poor perormance applies
to both international and national companies, and both publicly listed and non-listed
companies.34 On average, IOCs perormed better than NOCs (19 vs. 10 per cent;
without Statoil the average score or NOCs would only be our per cent). The best
perorming companies regarding international operations were Statoil, Nexen Inc.,
Talisman and Woodside. Five companies scored zero: CNOOC, GEPetrol, Inpex,
PetroChina and Petronas.
Diagram 15Country-level disclosureon international operations*results by company
*Only 31 companies rom the sample have upstreamproduction abroad, the remaining 13 companies aresingle-country producers.
IOCs
NOCs
Statoil
Nexen Inc.
Talisman
Woodside
Marathon
Repsol
Eni
Hess
Petrobras
Conoco
Lukoil
OMV
Wintershall
BP
BHP
ONGC
Suncor
Devon
Total
Exxon
Shell
BG
Chevron
KPC
Sonatrach
CNPC
CNOOC,
GEPetrol, Inpex,
PetroChina,
PetronasAVERAGE = 16%
69%
54%
40%
38%
29%
25%
20%
19%
18%
16%
15%
15%
15%
14%
14%
13%
12%
12%
11%
10%
10%
8%
8%
6%
2%
1%
0%
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COUNTRY-LEVEL DISCLOSURE AND EITI SUPPORT
Regarding country-level disclosure on international operations, the EITI supporters score
is more than double the score o non-EITI supporters 22 vs. 10 per cent, respectively.
The analysis o both actors NOCs vs. IOCs, and EITI supporters vs. non-supporters
results in a very interesting ranking. The best perorming group in both domestic
and international country-level disclosure are NOCs that support the EITI, while the
worst perorming group are NOCs that do not support the EITI. The unexpected result
is that while EITI support among NOCs is accompanied by much better country-level
disclosure, EITI-supporters among IOCs perorm worse than the non-EITI supporters.
A possible explanation is that some companies consider their participation in the EITI
as an alternative or country-level reporting in their own corporate documents.
Diagram 16
Country-level disclosure -EITI-supporters vs. non-supportersinternational operations (31 companies)
Average or all companies is 16%
IOCs NOCs
EITI SUPPORTERS NON-EITI SUPPORTERS
Statoil
Talisman
Woodside
Marathon
Repsol
Eni
Hess
Petrobras
Conoco
BP
BHP
Total
Exxon
Shell
BG
Chevron
69%
40%
38%
29%
25%
20%
19%
18%
16%
14%
14%
11%
10%
10%
8%
8% AVERAGE = 22%
Nexen Inc.
Lukoil
OMV
Wintershall
ONGC
Suncor
Devon
KPC
Sonatrach
CNPC
CNOOC,
GEPetrol,
Inpex,
PetroChina,
Petronas AVERAGE = 10%
54%
15%
15%
15%
13%
12%
12%
6%
2%
1%
0%
Diagram 17Country-level disclosure -NOCs vs. IOCs and EITI-support
*Average perormance or each group**For exact results on domesticdisclosure see Annex 4
INTERNATIONAL
DOMESTIC
NOCs/EITI-supporters
IOCs/non-EITI
IOCs/EITI-supporters
NOCs/non-EITI
Petrobras, Statoil
Pemex, Petrobras, QP, Statoil
43%
81%
21%
62%
19%
48%
48%
3%
*
**
REGIONAL PERFORMANCE ON COUNTRY-LEVEL DISCLOSURE(BY HOME COUNTRIES)
Concerning country-level reporting on international operations, Australia ranks rst,
which should be reinorced with the new BHP disclosure.35 North America, Europe
and Latin America score above the sample average, and CIS comes close to their
levels. The worst perorming regions are Arica, Asia and the Middle East, as the only
disclosure in these regions is partial inormation on production levels and reserves.36
IOCs NOCs
Diagram 18Country-level disclosureon international operationsperormance by region
Average or all companies is 16%
For regions including one companyonly, the name o the company isquoted beside the score.
60%
40%
20%
0%
Australia North America Europe (av=21%) Latin America CIS Middle East Asia Arica
26%
22%
15%
69%
18%15%
6% 2% 1%
Statoil
PetrobrasLukoil
KPC
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COUNTRY-LEVEL DISCLOSURE AND THE HOST COUNTRIES
The analysis o country-level disclosure raises an interesting question about how
much the host country environment infuences corporate disclosure. During our
consultations with companies, the dicult environment argument as an obstacle to
country-level reporting was oten mentioned.
To ollow up on this important issue, we used the collected data to compare levels
o corporate disclosure among dierent oil and gas producers within the same host
countries. As examples, we chose three countries rom each region rom the recently
published Revenue Watch Index country ranking.37 The major criterion was to have
a sucient number o producers in the sample in each selected country, in order to
present a comparative perormance eect.38
The results o the analysis are presented in Diagrams 19-23. For each country, there
are scores or disclosure on operations in this particular country. The companies in the
sample are not representative or each analysed country, and thereore the averages
concern only companies rom our s ample and not the entire upstream industry o thecountries. Thereore, the diagrams compare perormance o companies within the
same host environments and not the perormance o countries.
Among top-scoring companies in the selected Arican countries is only one local NOC
(Sonangol), while the remaining companies are oreign producers. Equatorial Guinea
is a particularly interesting case, because there are three US-based companies
with upstream production there, and their disclosure levels range rom eight to 54
per cent. Although operating within the same home and host laws, they apply very
dierent reporting standards.
In Asia local NOCs perorm well, and the perormance o oreign producers is very diverse.
In CIS countries the level o corporate disclosure is very diverse, ranging rom 0
to 77 per cent in Azerbaijan, 92 in Kazakhstan and 100 in Russia. Among the top
perorming companies are not only local NOCs but also several oreign producers.
The analysis o developed countries yields similar results. In Norway, companies
perormance ranges rom eight to 100 per cent, and in the US rom 0 to 69.
In Latin America the results are more country-specic. In Brazil, Petrobras strongly
outperorms the remaining producers. In Colombia, the perormance o companies
is less varied, ranging rom eight to 23 per cent. In Ecuador, Repsol discloses 69 per
cent o evaluated inormation. The disclosure o other companies remains rather modest.
Some producers publish extensive records o their nancial and operating
perormance in a certain country, while others do not publish any such data in the
same country. This phenomenon is repeated across countries and regions. Thereore,
there must be actors other than host country environment that infuence revenuetransparency. Among possible reasons or non-reporting are contractual agreements
with governments, lack o reporting capacities o companies, or other specic
company actors.
Diagram 19Corporate disclosurein chosen host countries ABOVE AVERAGE BELOW AVERAGE
ALGERIA
Statoil
Talisman
Woodside
BHP
Eni
Hess
Repsol
BP
Conoco
Total
PetroChina,
Sonatrach
ANGOLA
Sonangol
Statoil
Eni
Exxon
Petrobras
Total
BP
Chevron
ASIA
Marathon
Hess
Exxon
CNPC,
GEPetrol
EQUATORIAL GUINEA
Diagram 20Corporate disclosurein chosen host countries
CHINA
ABOVE AVERAGE BELOW AVERAGE
INDONESIA MALAYSIA
Sinopec
Statoil
CNOOC
PetroChina
CNPC
BP
Chevron
Conoco
Eni
Shell
Devon,
KPC
Talisman
Hess
Eni
BP
Chevron
Conoco
Exxon
KPC
Total
CNOOC,
CNPC,
Inpex,
PetroChina,
Petronas
Petronas
Talisman
Hess
Exxon
KPC
Shell
AFRICA
69%
31%
23%
15%
15%
15%
15%
8%
8%
8%
0%
77%
69%
15%
15%
15%
15%
8%
8%
54%
23%
8%
0%
85%
69%
54%
38%
15%
8%
8%
8%
8%
8%
0%
54%
23%
15%
8%
8%
8%
8%
8%
8%
0%
85%
31%
15%
8%
8%
8%
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LATIN AMERICA
EUROPE AND NORTH AMERICACIS
Diagram 23Corporate disclosurein chosen host countries
BRAZIL
ABOVE AVERAGE BELOW AVERAGE
COLOMBIA ECUADOR
Petrobras
ONGC
Repsol
BG
Chevron
Shell
Devon,
Inpex
Nexen Inc.
Petrobras
ONGC
Repsol
BP
Chevron
Total
Repsol
Petrobras
Eni
Conoco
CNPC,
PetroChina
Diagram 22Corporate disclosurein chosen host countries
NORWAY
ABOVE AVERAGE BELOW AVERAGE
USA
Statoil
Talisman
Eni
Hess
Total
Conoco
Marathon
BP
Chevron
Exxon
Shell
Nexen Inc.
Statoil
Exxon
Hess
BP
Chevron
Conoco
Marathon
Shell
Talisman
Woodside
Devon
Suncor
BHP
Petrobras
Repsol
BG
Eni
Total
Inpex
Diagram 21Corporate disclosurein chosen host countries
AZERBAIJAN
ABOVE AVERAGE BELOW AVERAGE
SOCAR
Statoil
BP
Hess
Lukoil
Chevron
Total
CNPC,
Devon,
Exxon,
Inpex,
PetroChina
KAZAKHSTAN
Eni
KazMG
Lukoil
OMV
BG
BP
Chevron
CNPC
Exxon,
PetroChina,
Shell
Lukoil
Rosnet
Gazprom
Statoil
Wintershall
BP
Conoco
Hess
Eni
ONGC
Repsol
Shell
Total
Exxon
RUSSIA
77%
69%
54%
23%
15%
8%
8%
0%
92%
85%
15%
15%
8%
8%
8%
8%
0%
100%
100%
92%
69%
62%
54%
54%
23%
15%
15%
15%
8%
8%
0%
100%
54%
50%
23%
23%
15%
15%
8%
8%
8%
8%
69%
69%
62%
62%
54%
54%
54%
54%
54%
54%
54%
46%
31%
15%
15%
15%
8%
8%
8%
0%
100%
15%
15%
8%
8%
8%
0%
23%
23%
15%
15%
8%
8%
8%
69%
17%
15%
8%
0%
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COUNTRY-LEVEL DISCLOSURE ON INTERNATIONAL OPERATIONS COMPARATIVE PERFORMANCE
Another way to look at companies perormance on country-level disclosure is to
evaluate their perormance relative to the sample. For example, i a company scores
50 per cent on question 40 (development and exploration costs) and 50 per cent on
question 45 (production volumes), and the sample averages or these questions are
11 and 71 per cent respectively, then on the rst question the company outperorms
the sample, while on the second question it underperorms although it was awarded
the same scores or both questions.
Based on this approach, we calculated each companys relative perormance or each
question rom the section on country-level disclosure on international operations (or
the 31 multi-country producers). In order to make the results clearer the questions
were grouped into three categories: transers to governments, nancial data and
operating (technical) data. The companies were then ordered according to their
overall ranking in the section (the ranking on international operations; see Diagram 15
at the beginning o this section).
q.45
q.46
q.37
q.42
q.43
q.44
q.38
q.39
q.40
q.41
q.45
q.46
q.37
q.42
q.43
q.44
q.38
q.39
q.40
q.41
q.45
q.46
q.37
q.42*
q.43
q.44
q.38
q.39
q.40
q.41
STATOIL
OPERATING DATA TRANSFERS
FINANCIAL DATA AVERAGE
Diagram 24Country-level disclosure on internationaloperations relative perormance
How to read the spider-webs: Each spider-webillustrates the perormance o one company as relativeto the analysed sample. The average line (black dottedline) indicates the border between under- and over-perormance. The large coloured areas indicate betterthan average perormance o a company. I a companysresult is on the average line, it perormed equal to thesamples average. I a coloured area is smaller than theaverage line, the companys perormance was poor. Forexample, Statoil outperormed strongly on transers togovernments, while it had below-average reporting onother nancial data (except or revenues, q.38) and onreserves (q. 46). The scale is equal or all diagrams.
*question number
NEXEN INC.
q.45
q.46
q.37
q.42
q.43
q.44
q.38
q.39
q.40
q.41
TALISMAN
q.45
q.46
q.37
q.42
q.43
q.44
q.38
q.39
q.40
q.41
WOODSIDE
q.45
q.46
q.37
q.42
q.43
q.44
q.38
q.39
q.40
q.41
MARATHON
q.45
q.46
q.37
q.42
q.43
q.44
q.38
q.39
q.40
q.41
REPSOL YPF
q.45
q.46
q.37
q.42
q.43
q.44
q.38
q.39
q.40
q.41
HESSENI
q.45
q.46
q.37
q.42
q.43
q.44
q.38
q.39
q.40
q.41
q.45
q.46
q.37
q.42
q.43
q.44
q.38
q.39
q.40
q.41
PETROBRAS
WINTERSHALL
q.45
q.46
q.37
q.42
q.43
q.44
q.38
q.39
q.40
q.41
CONOCO
q.45
q.46
q.37
q.42
q.43
q.44
q.38
q.39
q.40
q.41
OMV
BP
q.45
q.46
q.37
q.42
q.43
q.44
q.38
q.39
q.40
q.41
LUKOIL
q.45
q.46
q.37
q.42
q.43
q.44
q.38
q.39
q.40
q.41
q.45
q.46
q.37
q.42
q.43
q.44
q.38
q.39
q.40
q.41
BHP
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OPERATING DATA TRANSFERS
FINANCIAL DATA AVERAGE
Diagram 24 cont.Country-level disclosureon international operationsRelative perormance
Please reer to page 40 orull explanation.
SUNCOR
q.45
q.46
q.37
q.42
q.43
q.44
q.38
q.39
q.40
q.41
ONGC
q.45
q.46
q.37
q.42
q.43
q.44
q.38
q.39
q.40
q.41
q.45
q.46
q.37
q.42
q.43
q.44
q.38
q.39
q.40
q.41
DEVON
EXXON
q.45
q.46
q.37
q.42
q.43
q.44
q.38
q.39
q.40
q.41
TOTAL
q.45
q.46
q.37
q.42
q.43
q.44
q.38
q.39
q.40
q.41
SHELL
q.45
q.46
q.37
q.42
q.43
q.44
q.38
q.39
q.40
q.41
BG
q.45
q.46
q.37
q.42
q.43
q.44
q.38
q.39
q.40
q.41
CHEVRON
q.45
q.46
q.37
q.42
q.43
q.44
q.38
q.39
q.40
q.41
q.45
q.46
q.37
q.42
q.43
q.44
q.38
q.39
q.40
q.41
KPC
CNPC
q.45
q.46
q.37
q.42
q.43
q.44
q.38
q.39
q.40
q.41
SONATRACH
q.45
q.46
q.37
q.42
q.43
q.44
q.38
q.39
q.40
q.41
CNOOC, GEPETROL, INPEX,
PETROCHINA, PETRONAS
0 points
q.45
q.46
q.37
q.42
q.43
q.44
q.38
q.39
q.40
q.41
5. NOC-SPECIFIC (SECTION 4)The NOCs constitute a highly diverse group. The only common characteristic that
dierentiates them rom IOCs is their ownership structure they are all controlled by
the state. Our sample includes 24 NOCs: 16 ully state-owned; seven majority-state
and minority privately-owned; and one (Inpex) majority privately-owned (though the
Japanese state owns a 30 per cent stake and a golden share, allowing it to control all
substantial decisions o the company).
GROUPING OF NOCS
Several major eatures could be used as criteria or grouping NOCs. First, some
NOCs perorm and some do not perorm quasi-governmental unctions in the oil
and gas market, such as licensing, awarding concessions or even regulating the
oil and gas industry. Second, NOCs have dierent levels o international exposure;
some o them, although called national, are in act international companies, as theyproduce hydrocarbons not only domestically but also abroad. Our sample includes
11 international and 13 ully homebound NOCs. Third, some NOCs are publicly
listed companies (with the state being the controlling shareholder), some have major
upstream subsidiaries that are publicly listed, and some are non-listed, ully state-
owned companies.
Company grouping along these three types o criteria is summarised in Table 1.
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The division between single- and multi-country producers coincides little with the
other two eatures, while there does exist a relationship between public listing and
the type o activities the company perorms in the oil market. We decided to use the
listing criterion as the basis or NOC-grouping:
1. Publicly listed NOCs
This group has two major eatures in common: public listing and no regulatory
unctions (as reported) within the oil and gas market. The group includes: Gazprom,
Inpex, ONGC, Petrobras, PetroChina, Rosnet and Statoil.
2. NOCs with listed subsidiaries
These NOCs have publicly listed major upstream subsidiaries, making them partially
accountable to public investors. Most perorm certain quasi-governmental activities,
usually limited to licensing. This group includes: CNOOC, CNPC, KazMunaiGaz,
Petronas and Sinopec.
3. Non-listed NOCs
The third group has two major, common eatures: ull state-ownership and
engagement in regulatory unctions o the oil and gas market. This group is the
least homogeneous o the three and includes 12 companies: GEPetrol, KPC, NIOC,
NNPC, Pemex, PDVSA, Qatar Petroleum, SaudiAramco, SOCAR, SNPC, Sonangol
and Sonatrach. All NOCs rom OPEC countries belong to this group.
Table 1NOCs grouping
*Companies in purple aresingle-country upstream producers
PUBLICLY LISTED NOCsNOCS WITH LISTED
SUBSIDIARIESNON-LISTED NOCS
COMBINING REGULATORY
AND MARKET ACTIVITIES
KMG*
Petronas
CNOOC
CNPC
GEPetrol QatarPet*
KPC SNPC*
NIOC* SaudiAramco*
NN
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