Giving Compass' Take:

• Patrick Heller and Daniel Kaufmann explain how transparency and oversights can work together to ensure that National Oil Companies work in the interests of the public. 

• How can funders help provide support for reforms that include transparency and oversight? 

• Learn about an oil company working to address climate change. 

National oil companies (NOCs) are in the headlines a lot of late. In preparation for a $15 billion bond offer, Saudi Aramco disclosed its financial statements for the first time, showing that it is the world’s most profitable company. On the other side of the scales, amidst the chaos that has engulfed Venezuela, the dueling camps of Nicolás Maduro and Juan Guaidó are battling over how to handle the tens of billions of dollars in debt facing the state-owned oil and natural gas company PDVSA, and for control of its U.S. subsidiary.

Too many NOCs fail to provide both governmental and informal oversight actors (including the media and the public) with the core information necessary to hold the companies to account. We found that some NOCs provide a wealth of data on exploration and production, revenues, spending, and payments to government. Reporting practices have grown stronger among NOCs in Eurasia, Latin America, and Europe. But in many cases—especially among companies based in the Middle East and North Africa—NOCs still skip these basic steps of disclosure, as illustrated by the table below, which shows the proportion of NOCs in each region that report on each of 10 key indicators. We found information sufficient for us to complete the database field “total NOC assets,” for example, for only 35 percent of the Middle Eastern/North African NOCs and 20 percent of the sub-Saharan African NOCs in the sample. Across the companies in the database, reporting on expenditure and on employment levels remains particularly spotty.

Even where NOCs are transparent, however, that is not the end of the story. Which brings us to our second persistent challenge: oversight. Public sector actors tasked with monitoring NOC performance and ensuring a good return on public investment in these companies—including in regulatory bodies, parliament, and supervisory ministries—often lack the resources to do so effectively. Worse, in some cases, a lack of checks and balances has enabled corrupt political actors to actively interfere in the management of NOCs to push them toward corrupt ends. Nongovernmental oversight actors in the media and civil society have it even tougher, as they often lack access to decisionmakers and face steep deficits in financial and technical resources.

Read the full article about national oil companies by Patrick Heller and Daniel Kaufmann at Brookings.