Despite billions of dollars in revenue from oil exports, many African oil-producing countries continue to suffer poverty and disease, largely due to corruption, conflict, and mismanagement. Part of the solution, according to many analysts, is broader disclosure of oil revenues—or transparency.
African national oil companies (NOCs) need to improve the transparency of their revenues in their home territories compared with their activities abroad, according to Juanita Olaya, revenue transparency program manager at the anticorruption group Transparency International (TI).
“There is a huge difference between companies that have an anticorruption practice and those on stock exchanges and those that are not. None of the NOCs are listed unless they operate abroad to seek capital so they need regulation within their own home countries to make them operate better when it comes to revenue transparency,” she told OGJ.
Because of inconsistent reporting, information on oil revenue often is difficult to obtain, interpret, and compare across companies and countries.
According to a recent TI report ranking 42 international oil companies (IOCs) and NOCs in the transparency of revenue reporting based on publicly available data, Nigerian National Petroleum Corp. and Algeria’s Sonatrach are middle-level performers that disclose relatively little about revenues and anticorruption programs. They need to increase their reporting on policy and management systems as well as all areas of revenue transparency, TI said.
GEPetrol (Equatorial Guinea), Societe Nationale des Petroles du Congo (Congo-Brazzaville), and Sonangol (Angola) were among the worst performers, lacking disclosures on payments and anticorruption efforts. “Further improvement for this group requires increased reporting on all areas of revenue transparency at all levels of implementation,” TI said.
Reasons for poor disclosure included confidentiality clauses and difficult environments, but Olaya called upon all companies in this group to negotiate for transparency.
However, the International Association of Oil & Gas Producers criticized the methodology and data by TI for its report. “Much of this was proprietary and irrelevant to the issue of transparency,” the association said.
In February, Conger (former Zaire), Equatorial Guinea, Madagascar, Congo (Brazzaville), and Sao Tome and Principe became candidates for the Extractive Industries Transparency Initiative (EITI), launched in 2002 as a program whereby companies voluntarily publish what they pay and governments disclose what they receive.
As candidates, the nations must publish a fully costed work plan agreed with other stakeholders. The next stage will be full compliance with the EITI through dissemination of the information on revenues.