Corporate Watch

Revealed: Secret world of global oil and mining giants

Oil Africa - Flickr/ the Big Jiggity

‘Natural resources should help poor nations escape poverty but secrecy shrouds profits.’

Ten of the world’s most powerful oil, gas and mining companies own a staggering 6,038 subsidiaries with over a third located in ‘secrecy jurisdictions’.

As a growing number of international think-tanks and campaign groups demand action to prevent an estimated $1 trillion flooding out of developing, but resource-rich countries, attention is focusing on states like Delaware in the US and the Netherlands.

Defined as secrecy jurisdictions, these are places where there are few requirements for companies to publish accounts and beneficial ownership details among a host of other key disclosures, which as a result can be kept hidden from public view.


Trawling annual reports and stock exchange filings of companies such as BP, Glencore and ExxonMobil, a five month investigation by Publish What You Pay Norway (PWYPN)  found that:

  • 2,083 (34.5%) of the 6,038 subsidiaries belonging to just 10 of the world’s most powerful extractive industry companies are incorporated in secrecy jurisdictions.
  • The global extractive industry’s favourite place to incorporate is by far the US state of Delaware with 15.2% of all subsidiaries located there.
  • The second favourite extractive industry company  secrecy jurisdiction is the Netherlands, where 358 subsidiaries belonging to oil and mining giants are based.
  • Chevron is the most opaque extractive industry company in this study. 62% of Chevron’s 77 subsidiaries are located in secrecy jurisdictions. ConocoPhillips is the second most opaque oil and gas major in this report with 57% of its 536 subsidiaries incorporated in secrecy jurisdictions.
  • Glencore International AG is the most opaque mining company in the Piping Profits survey with 46% of its 46 subsidiaries incorporated in secrecy jurisdiction

None of the companies are breaking any laws nor any regulatory requirements of stock market listings. But the disclosure of the enormous scale of the $1.8 trillion extractive industry’s reliance on opaque locations comes as pressure mounts on US and EU policymakers to come up with so-called Country-by-Country Reporting (CBCR) measures to counter corruption and aggressive tax avoidance.


Whether it is the extractive industries or the state itself, they close ranks against the common enemy: civil society questions.
 Bolivian Marco Escalera, Somos Sur 

This would force companies to reveal key financial information – revenues, profits, taxes paid and reserved used – in every country where they do business. Currently EI giants ‘consolidate’ this information in one set of accounts. This makes it impossible for citizens in resource rich countries to get an accurate picture of how much oil, gas or minerals is extracted, how much is left and what kind of deal their country has struck for them.

In America, the Securities and Exchange Commission (SEC) is currently deciding how to adopt the Dodd Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) that forces all US listed companies to report detailed payments to any state it operates on a project-by-project basis.

Next month, the European Commission is expected to introduce similar legislation in the EU parliament. But there are serious concerns that the measures will be watered down before they become law.

Corporate secrecy harms poor nations
Mona Thowsen, national co-ordinator of Publish What You Pay Norway, said: ‘What this study shows is that the extractive industry ownership structure and its huge use of secrecy jurisdictions may work against the urgent need to reduce corruption and aggressive tax avoidance in this sector.

‘This is why there is a large and growing body of opinion throughout the world now demanding the introduction of CBCR because it is a vital tool to reduce corruption, secrecy and aggressive tax avoidance that particularly harms people in developing and emerging economies.’

The report, Piping Profits also involved journalists from Bolivia and Ecuador attempting to establish key financial and operational performance information from strategically important natural resource companies in their countries. However a month-long concerted attempt to gain information from companies yielded nothing, reflecting the veil of secrecy which citizens face in the campaign to find out what is happening to their resources.


CBCR.. it is a vital tool to reduce corruption, secrecy and aggressive tax avoidance that particularly harms people in developing and emerging economies.
Mona Thowsen, Publish What You Pay Norway

‘I always heard it was very complex – and sometimes even dangerous – to obtain financial information about Extractive Industry activities,’ said Bolivian Marco Escalera, co-ordinator for major Southern Hemisphere campaign group Somos Sur, after spending six weeks attempting to draw out key financial information from EICs operating in his country.

‘Whether it is the extractive industries or the state itself, they close ranks against the common enemy: civil society questions. The story is repeated over and over again: Access to timely and reliable information is not good enough.’

Both Delaware and the Netherlands are attractive to corporations. Over 900,000 companies – more than its human population – choose Delaware as a place to incorporate. The Netherlands is the the largest host of conduit companies worldwide and is an important jurisdiction for shifting corporate debt around the same organisation.

The Bureau’s Nick Mathiason researched and wrote the Piping Profits report for Publish What You Pay Norway.