A new SEC rule that will force SEC listed companies to report payments made to foreign governments could put US firms at a competitive disadvantage and interfere with ongoing and more effective efforts to increase transparency, according to the API Chief Economist John Felmy.
"This unilateral approach to revenue disclosure will harm the US economy. US firms could lose business, US jobs might not be created, and potential revenue to our government could be lost.
"The rules will give foreign oil and natural gas companies access to confidential, proprietary information that they could use against US companies when competing for crucial energy resources around the globe. State owned foreign firms could plunder this information to help them determine the strategies and resource levels of their US rivals.
"Unfortunately, disclosure would not be a two way street. State owned foreign companies would have to reveal nothing and might even be favoured for projects in host countries reluctant to have financial information disclosed.
"All of this potential harm and sacrifice is unnecessary. A better solution is the Extractive Industries Transparency Initiative approach, which requires that all oil and natural gas companies operating in a country disclose payments made to that government. US companies have been working to increase transparency for more than a decade using this World Bank and the Obama Administration backed approach."
Adapted from press release by Claira Lloyd.