OGJ Washington Editor
WASHINGTON, DC, Feb. 1 -- The US Security and Exchange Commission’s proposed rule to require resource extraction companies to disclose payments to the US and foreign governments could create competitive problems for US-listed companies, the American Petroleum Institute said in a comment it filed with the SEC.
Section 1504 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which became law in December, added a section to the 1934 Securities Act calling for the SEC to issue rules requiring resource extraction issuers to include in an annual report any payments made by the issuer, or by a subsidiary or other entity controlled by the issuer, to the US or a foreign government for oil, gas, or mineral development.
The requirement would be to provide information about the type and total amount of payments made for each development project, and the type and the type and total amount paid to each government, the SEC said. A resource extraction issuer also would have to provide certain information regarding those payments in an interactive data format, as specified by the commission, it added.
“The unilateral approach to revenue disclosure proposed by the SEC would give foreign oil and gas companies access to confidential, proprietary information that they could use against US-listed companies when competing for crucial energy resources around the globe,” said Misty McGowen, a director in API’s office of federal relations, after submitting API’s comments to the SEC.
McGowen said API supports the World Bank-backed Extractive Industries Transparency Initiative approach, which encourages disclosure by all oil and natural gas companies of payments made to foreign governments. The trade association hopes that the SEC works out anticompetitive aspects of the statute before finalizing the rule, McGowen said.
The SEC has extended the comment period on its proposal, which was scheduled to end on Jan. 31, until Mar. 2.
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API: SEC revenue disclosure proposal poses competitive problems