A clear way to encourage investment

For resource-rich nations, transparency enhances the economic climate.

March 19, 2009

Today’s global economic uncertainty has made investors more risk-averse. But our world still needs long-term investments in energy to fuel economic growth.

One way to encourage these investments is to improve transparency in those nations endowed with energy resources.

The International Energy Agency estimates that nearly $12 trillion of new global investment in oil and natural gas supplies will be needed in 2007-2030 to meet projected demand. Finding and producing this energy will require multi-billion-dollar projects that span decades, in dozens of countries around the world.

Transparency will be essential. Government financial disclosure not only helps ensure that countries and their citizens benefit from resource revenues, but also helps create the stable and positive investment climate needed to attract and retain such high levels of capital.

Since 2002, the Extractive Industries Transparency Initiative (EITI) — a coalition of governments, companies, civil society groups, and financial organizations — has worked to strengthen governance in countries rich in oil, gas and minerals by creating global principles for transparency and accountability. Companies report what they pay, and governments disclose what they receive.

The benefits of EITI’s work have been twofold. The 26 nations implementing EITI’s objectives have opened the flow of financial information; just as importantly, they have opened up voluntary, multi-stakeholder dialogues that are helping to create a culture of accountability that benefits a country’s citizens and its economy.

ExxonMobil is an active supporter of EITI and its goals. We have served as one of two international oil companies on EITI’s board of directors, and have participated in all four EITI global conferences, the most recent of which was hosted by Qatar last month.

In addition, we have helped enhance transparency in countries where we have significant investments, including Chad, Azerbaijan, Kazakhstan, Nigeria and Equatorial Guinea.

Improving transparency is part of ExxonMobil’s commitment to build capacity and strengthen economies in communities in which we operate.

By enhancing transparency, the economic climate is improved in resource-rich nations, encouraging investment in the energy our world needs.