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A view of social housing in Malabo, Equatorial Guinea on Nov. 16, 2022. ExxonMobil distributed $189.2 million last year to the Equatorial Guinea government. Credit: Samuel Obiang/AFP via Getty Images
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Tutu Alicante was studying in the United States when his sister, who suffered an ectopic pregnancy, was rushed to hospital in Equatorial Guinea. It was 1996, a year after Mobil discovered oil off the country’s coast. When she arrived at the hospital, Alicante recently said, there was no power and no doctor. His sister bled to death.

In 2014, Alicante said, his father was rushed to the same hospital and discovered similar conditions, and he too died. For 18 years, the Mobil oil field had brought Equatorial Guinea tremendous economic growth, but that wealth had failed to transform the lives of many of the country’s poor, Alicante said.

Alicante is executive director of EG Justice, a U.S.-based nonprofit focused on corruption in Equatorial Guinea, and he told this story during a recent webinar highlighting new securities filings from U.S. oil and mining companies. The reports to the U.S. Securities and Exchange Commission have been in the works for 14 years and reveal for the first time payments made by extractive companies to governments around the world, including the U.S. federal government.

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The disclosures detail tens of billions of dollars in taxes, royalties and other payments last year from ExxonMobil, Chevron and other companies. A key goal has been to discourage or expose the corruption and unfair deals that have helped explain why oil, gas and minerals have often brought wealth to elites and economic growth to poor countries while failing to substantially raise the living standards of many citizens to increase.

“For many of the people listening today, the issues we are discussing here may be about billions of dollars or about numbers,” Alicante said. “For the majority of people in my country, the issues we need to talk about here are matters of life and death: who lives a fancy life with Lamborghinis and Ferraris and private jets,” he added, “and who dies a preventable death. ”

For the first time, for example, Equatoguinians can see exactly how much ExxonMobil paid their government: $189.2 million last year, split between two ministries and the national oil company. That was a relatively small amount for Exxon, which reported paying $32 billion to 28 countries.

Chevron reported $16.6 billion in payments in 17 countries.

The disclosure rule applies to oil, gas and mining companies that file annual reports with the SEC. Some foreign companies that also trade on foreign exchanges, such as Shell, are already subject to similar disclosure rules in other countries.

The reports are intended to help civil society groups and citizens match payments from companies to data reported by their governments or in individual contracts. Discrepancies could be a signal of possible corruption.

One of the most striking revelations, however, is the discrepancy in taxes paid to different countries, says Aubrey Menard, senior policy advisor for natural resource equity at Oxfam America.

“What’s revealing in the U.S. is that we’re probably getting a bad deal,” Menard said in an interview. The United States is the largest source of oil and gas for Exxon and Chevron, she noted, “and yet they pay far more taxes to other countries.”

For example, Exxon produced about a third of its oil and 30 percent of its gas in the United States last year, more than in any other jurisdiction. Yet the company reported paying nearly five times more in taxes to the United Arab Emirates: $5.6 billion. When you include all types of payments, Exxon reports that it has paid five countries more than the U.S. federal government.

Chevron reported paying more to two countries and a similar amount to Angola as it did to the U.S. federal government, despite about half of its oil and gas production occurring domestically.

Exxon declined to comment for this article, but published a lengthy disclaimer along with its disclosure, saying: “The narrow focus of this report makes it challenging to make meaningful comparisons of payments across countries.” The statement said Exxon has paid more than $10 billion in taxes and duties in the United States, about a fifth of the global total. The disclosures do not require companies to report payments to state and local governments.

Exxon added: “Payments to different governments vary due to factors such as the type of funds, the timing of project start-ups, whether payments are managed by ExxonMobil or by third parties, and whether third parties or partners are considered government entities.”

Chevron said in a statement that comparisons between countries are “difficult” because U.S. state taxes are not included and because royalty structures vary by jurisdiction. For example, in most countries oil and gas are state-owned. In the United States, minerals are privately owned unless they are on public land, meaning most of the royalties go to private citizens rather than the government.

Zorka Milin, policy director of the Financial Accountability and Corporate Transparency Coalition, an alliance of advocacy groups, said the oil industry was fighting against more detailed disclosure of state and local government payments, which might have improved comparisons. Moreover, companies could have made these additional disclosures voluntarily, she said.

“Nothing will stop them,” Milin said. “This is a minimum standard.”

Even without perfect comparisons across countries, Milin said, the tax data could fuel a conversation about why payments are relatively low in the United States. The information will be especially valuable as Congress debates whether to extend or replace the corporate tax cuts enacted in 2017 and set to expire next year.

The Biden administration has proposed reforming and repealing fossil fuel tax breaks, which it says could raise $110 billion over 10 years.

Milin said she thought it was mainly these tax revelations that pushed oil companies to oppose the rules.

“They’re ashamed,” she said, “and they should be ashamed.”

“In many of these communities, the negative costs of these projects are deeply felt.”

— Zorka Milin, Coalition for Financial Accountability and Corporate Transparency

While the United States may receive relatively less tax from oil companies, advocates say many other countries are also getting bad deals.

“A large percentage of concessions obtained by companies are predatory,” Simon Taylor, co-founder and director of the advocacy group Global Witness, said during the webinar. “They entail blatant tax conditions that essentially amount to making them profitable for the companies just because they are a rip-off for the state involved.”

Taylor said the revelations could be particularly instructive in light of global commitments to phase out fossil fuels. Rising production costs and pressure to switch to renewable energy are expected to put pressure on oil industry profits. The revelations could reveal whether governments are making deals that are less favorable to their citizens.

The reports, filed last month, were required by an amendment to the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, which directed the SEC to implement a new rule. The commission’s first attempt was rejected in 2013 after a legal challenge from the American Petroleum Institute and other business groups. The SEC then wrote a new rule, but it was repealed after the election of Donald Trump with the Congressional Review Act. The signing was one of Trump’s first acts as president.

The final rules are missing some elements that advocates had pushed for and that were included in previous versions. Perhaps most importantly, Milin says, companies are not required to report payments at the contract level, but can group all projects within a state or province.

“In many of these communities, the negative costs of these projects are deeply felt,” Milin said. The revelations were intended to show communities exactly how much flowed to the government in connection with these projects.

Even without that detail, Milin argued that the revelations could serve as an example for people trying to push for policies that the oil industry opposes.

“This is quite an educational story about how big, powerful oil interests didn’t want to see this reform happen, and they threw everything at it, and they won some things, but they didn’t win the victory,” Milin said. “I think that’s something hopeful.”

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One thought on “Tens of billions in payments from oil companies to governments”

  1. Aw, this was a really nice post. In idea I wish to put in writing like this moreover – taking time and actual effort to make a very good article… but what can I say… I procrastinate alot and certainly not appear to get something done.

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