‘Invest in compliance programmes’
Falling oil prices shouldn’t deter oil companies from investing in compliance programmes, an expert has suggested.
Jason Rosychuk, an industry expert at Pinsent Masons, a Qatar-based law firm, said that risk profiles did not change when the price of oil dropped. Extractive resources would still be located largely in countries with a high perception of corruption.
“With global oil markets falling by a third since May and still under half their value a year ago, there remains considerable pressure on energy companies to reduce costs and raise efficiency. But as oil prices fall, risks rise, making weakening compliance functions in times of economic difficulty a false economy.”
Inherent compliance risks for energy companies such as opaque bidding, heavy subcontracting, high-risk environments and significant government interaction – all industry norms - will not lessen, while other risks will emerge.
Cutting compliance personnel without beefing up oversight through monitoring or other mechanisms means companies could be setting themselves up for serious and expensive compliance failures, the analyst noted.
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