American Oil and Gas Reporter - August 2016 - 35

Leasing Act, would amend the Outer
Continental Shelf Lands Act to provide the
secretary of interior authority to conduct
Internet-based, sealed-bid offshore oil
and natural gas lease sales. According to
a House Natural Resources Committee
posting, the bill requires DOI to conduct
its first Internet-based sale within one year
of enactment.

NOIA's Luthi calls HR 5577 "a costeffective improvement that will increase
transparency and efficiency in the offshore
leasing process, and perhaps drum up more
interest in offshore lease sales."
Luthi notes that BOEM already holds
online offshore wind lease sales, and
BLM will hold its first Internet-based onshore lease sale this fall.

HR 5577 sponsor, Representative Garret Graves, R-La., points out that his bill
is one piece of the Innovation Initiative
spearheaded by House Majority Leader
Kevin McCarthy, R-Ca., and Chief Deputy
Whip Patrick McHenry, R-N.C., which
"seeks to remove government-made obstacles to innovation and bring government
into the 21st Century."
❒

API Pans SEC's New Disclosure Rule
WASHINGTON-The Securities and
Exchange Commission's reworked rule under which oil and gas companies must disclose payments to governments still goes
too far, contends the American Petroleum
Institute.
On June 27, the SEC announced Rule
13q-1, by which resource extraction issuers
must disclose payments made to governments for the commercial development of
oil, natural gas or minerals, as mandated
by the Dodd-Frank Wall Street Reform and
Consumer Protection Act of 2010.
SEC notes that Rule 13q-1 was adopted initially in August 2012, but was vacated the following July by the U.S. District
Court for the District of Columbia. That
lawsuit, which was filed by industry

groups including API and the Independent Petroleum Association of America,
contended SEC went beyond the requirements of Dodd-Frank by requiring companies to file information at the project level, rather than aggregate payment information (AOGR, August 2013, pg. 33).
The reissued rule still mandates disclosure at the project level. According to SEC,
companies must report payments of
$100,000 or more in a fiscal year for taxes, royalties, fees (including license fees),
production entitlements, bonuses, dividends, and infrastructure improvements,
or if required by law or contract, as well
as community and social responsibility
payments. Reporting must begin for fiscal
years ending on or after Sept. 30, 2018.

SEC points out it included two targeted exemptions to the reporting obligations:
* Resource extraction companies that
acquire entities not previously subject to
the disclosure rule will not be required to
report payment information for the acquired company until the fiscal year following the acquisition.
* Payments related to exploratory activities are granted a one-year delay.
In addition, SEC says resource extraction companies "may use a report prepared
for other disclosure regimes . . . if the commission determines the requirements applicable to those reports are substantially
similar." And in a separate order issued
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AUGUST 2016 35
American Oil and Gas Reporter - August 2016

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