Oil companies in resource-rich nations are recognizing the power of investor trust and a focus on national development as their best tools for survival in the current financial downturn.
"State-owned oil companies are a pivot-point in this crisis," said Karin Lissakers, director of Revenue Watch Institute. "They are realizing that transparency in revenue management and reporting has become an economic necessity."
At a meeting hosted by Revenue Watch during this week's global conference of the Extractive Industries Transparency Initiative (EITI) in Qatar, companies voiced anxiety about losing revenue in the downturn and setting aside regulatory reforms that could lead to long-term fiscal and national growth.
"Without sound corporate governance and disclosure policies, companies will lose the trust of the investors and lending institutions they need to operate successfully," said Lissakers. "Open reporting practices can safeguard future windfalls against the volatility that is wreaking havoc today."
With more than two dozen countries now in the EITI, and Azerbaijan named as the first compliant country, Revenue Watch is urging resource-rich nations to use the momentum of the transparency movement to secure their prospects for long-term growth.
The Revenue Watch meeting on Monday brought national oil companies from countries including Azerbaijan, Qatar, Kazakhstan and Norway together with experts from the World Bank and Stanford University, and international business leaders including EITI Chairman Peter Eigen, George Soros of the Open Society Institute, and Karina Litvack of F&C Asset Management.
George Soros warned producing countries against energy deals that favor quick profit over sound practice. Speaking to the full EITI conference on Tuesday, Soros said "The commodity downturn is likely to be temporary, but the deals bind you for decades. Don't give away the store for short-term gains. Better to leave a valuable asset in the ground than accept terms that will yield your country little revenue or other benefits over the long term."
Revenue Watch offered its warm congratulations to the Republic of Azerbaijan for being named the first EITI compliant country, and welcomed the United Republic of Tanzania as the latest confirmed candidate country.
The attendance of Iraqi oil minister Hussain al-Shahristani at the EITI conference also underscored the importance of adding a major Middle East oil producer to the initiative. Revenue Watch expressed its continued enthusiasm about the progress of Iraq toward becoming an EITI candidate. Revenue Watch Institute is a part of the EITI governing board and was actively involved in its founding in 2002.
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SOURCE Revenue Watch Institute |
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