Crisis to induce transparency in oil companies

The global financial crisis and the resulting difficulty in raising finances may force national oil companies to become more transparent in their operations.

Analysts at the World national oil companies congress’ said oil firms, particularly those of consumer countries and emerging oil producers such as Petrobras of Brazil, raise finances through new business partnerships and issue of bonds.

Gulf majors such as Saudi Aramco, Adnoc and Kuwait National Petroleum Company (KNPC) will, however, remain immune to these changes, considering the low costs involved in extracting crude and strong financial positions. However, even they will be forced to diversify their sources of funding during the prevailing turbulent times, an analyst said.

“National oil companies may be forced to disclose their accounts especially if they are looking forward to raising finances from banks and financial institutions,” said Valerie Marcel, an associate fellow at Chatham House, a London-based non-profit analysis and research institution.

“We may however not see similar changes among the Middle East producers. It is yet to be seen whether correct production levels will be disclosed here,” said Darren Davis, Managing Director, Head of Resources and energy wing of HSBC.

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