Core Petrobras Field tops new entrants to the repository, now 800 contracts strong
It’s almost been a year since we have first launched the OpenOil contracts repository and we are happy to today announce our fourth update: 83 new full-text agreements, including new host government contracts from countries such as Colombia, Egypt, Libya, Mongolia, Portugal and most notably Brazil, taking the total past the 800 mark.
As we explain in a separate blog, this release also now enables full-text searches across the 30 million words of the contract document base. But there are also some notable additions to the repository.
Let’s start with Petrobras. The Brazilian state owned company has been constantly in the news for various corruption allegations. We are adding 11 Petrobras contracts into the repository today, as well as welcoming Brazil to the list of countries covered. These had been published previously to investors, so we scraped them from financial regulator websites, as we have done before.
But the Petrobras contracts are noteworthy for two reasons: first, we have now managed to acquire contracts for most major oil companies, including Chevron, ExxonMobil, Shell, Total, BP, BG, Anadarko, Tullow, Statoil – and now also Petrobras.
This is relevant in so far, as it is much harder to get access to the terms in the contracts signed by these companies. Materiality regulations, requiring listed companies to release contracts to stock markets, are connected to the individual weight that agreements hold for a particular company. Only if the business of a company is considered dependent on a particular contract, the contract will be classified as material and released to investors. So given the sheer size of oil majors with their many assets across the globe, most published contracts come from smaller or medium sized oil companies where it is more likely for a company to depend on them. The Petrobras contracts therefore form a rare exception.
The second reason for why the Petrobras contracts are interesting, is that they include the main host government agreement, signed in 2013, on Brazil’s biggest oil field to date, Libra. The contract assigns Petrobras, Shell, Total and CNOOC the rights to develop what has been classified as a supergiant oil field, that is expected to produce over a million barrels of oil per day and has been the prestige project driving the whole of Brazil’s deep offshore development.
It regulates what is likely to become a significant income stream to the Brazilian government, and it is now possible to extract the relevant terms for the project such as the cost oil provisions, royalties, etc, and to use these terms to create a public interest financial model.
The contract repository now stands at 806 contracts from 73 countries, and we are happy to have more than doubled the number since our initial release. This of course still represents a small proportion of the total number of contracts in the world. But it is enough of a base to allow norms and best practices to be much more findable. Need a dozen references for gas royalty rates? Trying to figure out how contracts might price local grades of crude against benchmarks? Or simply trying to find language on any issue in Spanish and French? All are now a short search process away in the full-text search set up on Aleph, our corporate filings database.
We are even happier that there is ongoing demand. The last month has seen steady traffic of about 200 contract downloads a day – and a full mirror of the repository downloaded every other day. We estimate that there are now over 200 complete copies of the repository saved on a harddrive somewhere around the globe.
This is particularly important to us, since it was one of our aims to work against contracts ‘disappearing’. By disappearing contracts I mean those documents that had been released somewhere before, but then taken down again. It happens. But with 300 complete copies spread across the globe, the repository effectively ensures that “once public, always public”.
Finally, the list of countries from which we have logged downloads is growing. Although most downloads still come from the global north, our logs show downloads from 50 countries over the last 30 days only. Recent spikes of interest include in Greece, where natural resource management has become a hot issue under the Syriza government, Yemen, Tanzania, where contract transparency continues to be an issue of major public interest, and Egypt, where companies have recently declared new finds on a scale they say will transform the local energy sector.