Progressive reporting: Statoil and transparency

1. Progressive reporting:
Statoil and transparency
Oslo 31 May 2016
2016-04-15

2. 2016-04-152
Agenda and participants
Name and
Surname
Organization
Larysa
Melnychenko
Ministry of Finance of Ukraine
Dina Narezhneva National EITI Ukrainian Secretariat
Oleksandr
Shumskyi
State Fiscal Service of Ukraine
Olena Dyachenko Ministry of Economic Development and Trade of
Ukraine
Vadym Altukhov NGO All-Ukrainian Narodnyi Control (Civil Control)
Vladyslav
Deineko
NGO Analytical Center for Regional Cooperation
Mariia Sushkova Ministry of Energy and Coal Industry of Ukraine
Mariia Melnyk NGO Dixi Group
Maryna Shapoval NGO IBSER
Viacheslav
Zubenko
NGO IBSER
Andrii Chubyk NGO Centre for Global Studies “Strategy XXI”
Olga Belkova Verkhovna Rada of Ukraine
1. Opening – introductions
2. Revenue transparency in
Statoil
3. The EITI experience
4. Experience so far in Ukraine
5. Discussion around the table
6. Closing Name and
Surname
Organization
Bente Hovland VP Sustainability. Reporting and Monitoring, Statoil
Siri Farstad Sustainability expert, Statoil

3. 2016-04-153
Background
As part of this year’s sustainability
reporting, Statoil published its second
annual Payment to Governments report.
This sets out all Statoil's payments to
governments around the world in 2015 on
a project-by-project basis.
Statoil has been a pioneering company
within revenue transparency, publishing
voluntarily on a country-by-country basis
for more than ten years before it became a
requirement.

4. 2016-04-154

5. 2016-04-155

6. 2016-04-156
Our values embody the spirit and energy of
Statoil. They are at the core of our
management system.
Our values drive our performance and
guide us in how we do business, and in
how we work together and towards
external stakeholders.
Our values
Courageous
Open
Hands-on
Caring

7. Statoil works in partnerships to
advance it safety and sustainability
objectives:
 To be recognised as the most
carbon efficient oil and gas
producer
 Committed to creating lasting
value for communities
 Industry leader in safety and
security
Engagement is part of how we work
2016-04-157
Payments to
governments

8. From voluntary to mandatory disclosure
8
Disclosing payments to governments is important to prevent corruption and tax
evasion – it enables communities to hold governments accountable and
contributes to a level playing field
2011
US Securities and
Exchange Commission
(SEC) approved rules for
oil and gas producers on
project level disclosure of
payments to governments.
The rules were vacated in
July 2013
July 2013
EU directive, which to a
large extent is aligned
with the original
requirements in the
SEC rule, was
approved
December 2013
Norwegian Parliament
passed requirements
aligned with the EU, but
also requiring
disclosures and
2016
SEC is to propose new
rules on reporting of
payments to
governments
December 2014
UK adopted the EU
transparency rules
2016-04-15

9. Scope of reporting and payment types
Key terms
• Project: operational activities that are governed
by a single or substantially interconnected
contracts, licenses, leases, concessions or
similar legal agreements and form the basis for
payment liabilities with a government.
• Government: any national, regional or local
authority of a country. It includes a department,
agency or undertaking (i.e. corporation)
controlled by that authority.
Validity
• Extractive activities (upstream); subsidiaries
consolidated into the group’s accounts
Principles
• Payments made directly by Statoil, or on behalf
of partners, are disclosed (100%)
Payments in scope
9
Companies in extractive and logging industries, i.e. Statoil
Subsidiaries that are consolidated into the group’s accounts
Upstream activities (exploration, prospection, discovery,
development and extraction)
Certain types of payments e.g. Tax on income and
production
Payments to governments
Payments made by Statoil, individually or on
behalf of partners – ‘publish what you pay’
Materiality treshold of 800 000 NOK
on cash basis
2016-04-15

10. Report layout: Consolidated overview
2016-04-1510

11. Report layout: Project and receipient
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12. Feedback loop
2016-04-1512

13. Engagement is part of how we work
2016-04-1513

14. 2016-04-1514
EITI

15. The EITI experience of Norway
15 2016-04-15
• 2014: For the seventh
consecutive year, Norway’s
report has no discrepancies
• Over 98% of revenue streams
made up of two payment types
• The petroleum sector is the
dominant sector in Norway

16. Norwegian government’s petroleum revenue
2016-04-1516
NOK billion

17. Governance of the EITI in Norway
• The reporting requirements for the
companies and government agencies were
passed into law under regulation effective
1 July 2009.
• The Norwegian EITI office is hosted by the
Ministry of Oil and Energy.
• Members of the multi stakeholder group is
appointed for two years at a time by the
King-in-Councel.
• There are meetings of the multi
stakeholder group two to three times per
year.
• The EITI report complements other
important reports and discussion papers
that are publicy awailable and discussed
by a wide range of stakeholders in Norway.
17 2016-04-15

18. Experience from actual reporting
Statoil reports within three areas
1. Corporation tax/special tax.
2. Indirect taxes and area fees.
− Indirect taxes in scope are CO2 and NOx.
− Area fee, paid by operator on behalf of
joint venture.
3. Payments in conjunction with Statoil’s role of
marketing and selling the Norwegian State’s
share of petroleum production.
This is experienced as a very smooth process,
not requiring much effort (max. ten days)
− Very few people involved
− Everyone knows what to do
− Forms are found on the NEITI web page.
Important to avoid frequent changes
Main success criteria: management buy-in and
well-working systems
The Norwegian form
18 2016-04-15

19. EITI and Statoil outside Norway
Statoil has supported the EITI since its
inception
• Annual financial contribution
• Staff secondment
• Board membership
• Committee work
• Participating in round tables
• Hosted events
• Active on several local MSGs
19 2016-04-15

20. EITI - what’s in it for Statoil?
• Be at forefront and influence shape of future development on transparency.
• The multi stakeholder set-up allows good dialogue with stakeholders.
• Be informed about country issues in Statoil countries
− e.g. Azerbaijan, Columbia, Indonesia, Mosambique, Myanmar, Nigeria,
Norway, Tanzania, UK, USA
• Work on improved governance in important countries.
• Share experience on how to report efficiently.
2014-11-0520 Classification: Internal

21. Other Statoil reports you might find useful
2016-04-1521

22. Presentation title
www.statoil.com
2016-04-1522