The Obama administration’s top financial regulator agreed on Friday to impose new financial disclosure rules on the oil and gas industry, which the industry warns could benefit U.S. oil rivals in the Mideast and elsewhere.
The Securities and Exchange Commission said the proposed rules are mandated by the Dodd-Frank financial reform assessed after the 2008 financial crisis.
The proposed rules require producers to disclose payments made to the U.S. or foreign governments.
The American Petroleum Institute, representing the oil and gas industry, raised concerns about the agency’s decision to move ahead with the proposed regulations. The rules add to a growing list for the industry from all sides of government, including the Environment Protection Agency and Interior Department.
The trade group said the proposed disclosure requirements issued by the Securities and Exchange Commission “could harm U.S. competitiveness while possibly weakening a decade-old effort to implement payment transparency programs worldwide.” It argues that the rules would make it difficult to proceed with industry’s own financial transparency initiatives.
The rule also could give a competitive leg-up to U.S. rivals such as Venezuela, Saudi Arabia, Iran and other countries that have large state-owned oil and gas companies with no such regulations to encumber them, according to the group.
“The SEC rule would only apply to U.S. firms, placing them at a competitive disadvantage against government-owned oil giants not subject to the rule,” said Stephen Comstock, the group’s director of tax and accounting policy. “Not only could the rule hurt the millions of Americans who own shares in oil and natural gas companies, it could also cost jobs and damage America’s energy security by making it more difficult for U.S. firms to gain access to resources abroad.”
The agency says it plans to move rapidly on developing the rules, seeking public comments by Jan. 25.
