Oil Companies That Gave ‘Bonuses’ to Libya Also Lobbied Against
by Marian Wang
Black smoke billows from a petrochemical factory on fire following clashes between pro- and anti-Qaddafi militants close to the eastern Libyan oil town of Ras Lanuf on March 12, 2011. (Mahmud Turkia/AFP/Getty Images)
Multinational companies operating in Libya have had to deal with many obstacles, including a government rife with corruption that often asked for what amounted to bribes.
Sometimes those companies balked; sometimes they paid them, New York Times reported today.
In 2009, Libya’s Qaddafi demanded that oil companies operating in Libya pay him to offset the cost of reparations to victims of Libyan terror attacks, according to the Times. (Several major oil companies had also previously lobbied against the law that ensured American victims would be compensated by Libya, arguing this could harm business ties between the two countries.)
The Times cited an example of two oil companies who made other payments to Libya:
In 2008, Occidental Petroleum, based in California, paid a $1 billion “signing bonus” to the Libyan government as part of 30-year agreement. A company spokesman said it was not uncommon for firms to pay large bonuses for long-term contracts.
The year before, Petro-Canada, a large Canadian oil company, made a similar $1 billion payment after Libyan officials granted it a 30-year oil exploration license, according to diplomatic cables and company officials.
The Dodd-Frank financial reform bill includes a disclosure rule that would require such payments to be disclosed to the Securities and Exchange Commission. Occidental Petroleum was one of several companies that lobbied against that rule. Oil companies have argued that the disclosure law will hurt their competitiveness ($) and perhapsviolate laws in the countries they are dealing with.
Last fall, representatives from ExxonMobil, Anadarko Petroleum, Chevron, ConocoPhillips, Marathon Oil, and Occidental—all members of the American Petroleum Institute, an oil and gas trade group—met with SEC officials to raise objections to the rule, the Wall Street Journal noted at the time.
According to a memo published by the SEC [PDF] after the meeting, the disclosure rules would apply to the seven oil companies operating in Libya that report to the commission. They are: Hess Corporation, Chevron, Occidental Petroleum, Shell, Eni, Husky Oil, Petro-Canada, Repsol, StatoilHydro and Canadian Occidental.
The American Petroleum Institute has touted a separate transparency program called the Extractive Industries Transparency Initiative, which it describes as a “voluntary, multilateral, multi-stakeholder global effort to promote revenue transparency in resource-rich countries.”
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