# Presentation: 018443

## The Financial Reporting System and Petroleum DevelopmentsDr. Mark Rodekohr, Energy Information Administration

- June	1999

**Notes:**
No notes for this page.

## EIA’s Financial Reporting System

- Proprietary company-level data on U.S. majors collected since 1977
- Uniform reporting of line-of-business on company worldwide financial and operating details
- Audited by independent CPAs; summary data consistent with company annual reports and SEC disclosures

**Notes:**
Reporting companies benefit by seeing reports that compare their corporate results to those of the industry by line of business.
Some corporate staff like this others do not.

## The Financial Reporting System (FRS)

## Criteria for Inclusion in the FRS 

- P.L. 95-91, Section 205(h):
- -- requires the Administrator [of EIA] to “*identify and designate* major energy-producing companies...involved in one or more lines of commerce in the energy industry *so that* *the energy information collected* from such major energy-producing companies *shall provide a statistically accurate profile of each line of commerce in the energy industry* in the United States.” (Emphasis added)
- -- defines an “energy-producing company” as one engaged in...“*refining*, milling, or *otherwise processing mineral fuels.*..”  (Emphasis added)

## U.S. Refining/Marketing is a Key Area for FRS
FRS U.S. Refining/Marketing data have been of considerable use in EIA reports and to EIA customers
However, in the absence of a change in the FRS selection criteria, the statistical reliability and representativeness of FRS refining/marketing data will decline sharply in the 1998 reporting year and beyond. 

- FRS U.S. Refining/Marketing data have been of considerable use in EIA reports and to EIA customers
- However, in the absence of a change in the FRS selection criteria, the *statistical reliability and representativeness* of FRS refining/marketing data will decline sharply in the 1998 reporting year and beyond.

## Reasons for These Changes

- Structural changes in the industry/consolidations
- FRS survey criteria which were developed by EIA to implement Section 205(h)
- -- An FRS respondent must be among the Top 50 U.S.-based companies ranked by world oil production
- -- And be a publicly-traded U.S.-based company who accounts for 1% or more of U.S. production or reserves of oil, natural gas, coal, uranium, or of U.S. refining capacity or refined product sales volume

## The “Top 50” requirement has had the effects of:

- Adding oil and gas producers who gain more than 1% of U.S. production or reserves to the survey group(e.g., FRS companies’ natural gas production share was 44% in 1986 and 1997)
- Adding integrated refiners who gain more than 1% of U.S. refining capacity to the survey group
- Not adding non-integrated refiners who gain more than 1% of refining capacity to the survey group

## Proposal

- Drop the “Top 50” requirement
- Also, drop the 1% criteria for coal and uranium
- Effect is to add companies such as
- Tosco, Sun, and PDV America
- while dropping companies such as
- Ashland.

## Effective Tax Rates (Income and Production Taxes) in Oil and Gas Production for FRS Companies, 1981-1997

**Effective Tax Rates (Income and Production Taxes) in Oil and Gas Production for FRS Companies, 1981-1997**

## Exploration and Development Expenditures of the FRS Companies, 1989-1997

## Regional Distribution of FRS Companies' Exploration and Development Expenditures,1989-1991, 1992-1994, and 1995-1997

## Worldwide Crude Production Shares

- 1972

- 1997