The mouth, ears and soul of the petroleum industry

The World Petroleum Council is crucial in its arena of regulating oil and gas production worldwide

There's no doubt that next to religion, petroleum is possibly the most divisive while simultaneously uniting factor on Earth. Wars have been fought over it, countries run on it and some people become exceedingly rich because of it. A product this vital needs a group that attempts to ensure the multitude of oil and gas using nations and producers communicate and plan for life after their finite resources run out.

That group is the World Petroleum Council (WPC), a voluntary non-profit, unbiased and non-political organisation whose membership represents over 90 percent of oil and gas production and consumption worldwide. Founded in March 1933 in London the stated aim of the WPC is to facilitate communications between all countries and all parts of the petroleum industry. It is recognised by the United Nations and due to its status as a Non-Governmental Organisation is allowed access to UN negotiations.

There are now many expectations placed upon the oil and gas businesses in they way that they operate with a greater emphasis on corporate social responsibility. The WPC does not set or enforce standards but it attempts to raise them by providing a forum for countries and companies to exchange views on what constitutes good practice.

The Director General of the WPC, Dr Pierce Riemer, has highlighted the need for the industry to act in a socially responsible manner: "The oil and gas industry’s prime responsibility is to meet the world’s demands for energy. It should do so in a way that addresses society’s concerns."

Economic development
The WPC has outlined the key areas in which the industry should be looking to act in this socially responsible manner. They believe that the priorities for oil and gas producers should be for the industry to maximise its contribution to sustainable economic development. To ensure that local communities benefit from the presence of oil and gas projects, helping to tackle global health and taking a fresh approach to human rights challenges.

Encouraging and developing sustainable economic development is an issue that the WPC is working hard to promote and encourage within the industry. "The industry’s effort involves working more and more with society to strike the correct balance between our efforts and those of governments and international institutions that have primary responsibility for sustainable development." They believe that sustainability will only be achieved by the industry displaying a continued ability to work together.

The WPC highlights the Chad/Cameroon pipeline as a clear example of a success through the industry cooperating with external influences. Many of their members are looking for solutions that build upon the experience of these successes. In order to do this they are looking to close the ‘governance gap’ that occurs when public sector bodies fail to manage their relationships with communities directly involved in oil and gas exploration and production.

To achieve this many publicly traded oil and gas companies support greater transparency on revenue flows and as a result have become engaged in the ‘Extractive Industry Transparency Initiative’ (EITI). However, initiatives such as the EITI are only effective if as many companies as possible choose to become active participants and even there are limits to what they can do to influence how host governments spend the revenues they receive from oil and gas resources.

A key ideal that the WPC is trying to make its members adhere to is ensuring that communities where oil and gas activities are undertaken feel the benefits. The benefits they would like to see companies proactively seeking local hires and providing them with new skills, training, and a higher income. They would also like local taxes accrued from projects to be applied to assist the community and the economic and infrastructure developments related to company activities and presence utilised to create mutual benefits.

Sense of injustice
The situation that the WPC wants to avoid is the benefits to the country accruing but not being directed toward the local population. This understandably leads to a sense of injustice within the local community. The failure to deliver benefits can be caused by a lack of local and regional economic planning leading to the squandering or misuse of funds. Situations such as these create problems for both the local population and the oil and gas companies.

They point to the community partnership undertaken by Nexen in Yemen. A core part of the partnership is a three-year English language and technical course that qualifies people for full-time employment across several disciplines. Since the program began in 1993 the numbers of Yemenis employed by Nexen has increased by about nine per cent a year. Another element is a scholarship programme that provides promising Yemeni students a post-secondary education in Canada. As part of Nexen’s drive for 80 percent of its workforce in Yemen to be Yemeni by 2009 the company doubled its commitment to 40 scholarships.

As the WPC points out "Though health management is not a core competency for the oil and gas industry, it does have a bearing on staff – both expatriate and local – and ultimately on the industry’s ability to deliver product. Many of the communities and countries in which the industry works face critical health issues." In order to help with this the council encourages a number of its members to support initiatives that help to fight the major health issues of our times.

Events such as ChevronTexaco's on-line workshop for African women journalists to promote HIV/AIDS prevention and awareness is an example the type of project the WPC wishes to see its members become involved in. The WPC has also highlighted and congratulated initiatives such as Statoil's attempts to promote Human Rights in Azerbaijan through the production and distribution of school support materials and training for primary and secondary school teachers as well as Shell's efforts to adhere to its self imposed business principles enshrined in their 1997 Report entitled ‘People, Planet and Profits.’

Room for improvement
Dr Riemer does believe that attempts by oil and gas companies to act responsibly are being successful but there is room for improvement:  "The industry is making steady progress in meeting them. There is no doubt our industry has achieved a great deal. But that’s about as close as we dare come to complacency. Instead, we should readily acknowledge that as individual companies and as an industry we do not always have the right answers and mistakes are made."

Through its triennial World Petroleum Congress the WPC hopes to encourage the industry to meet these challenges. The embodiment of this hope is the Legacy programme that sees the surplus from the congress used towards the funding of a legacy project proposed by the host and agreed with the WPC and the Council. The WPC states the aims of the World Petroleum Congress are "not only to organise a world class event and then move on to the next venue, but to enrich the local host community and to leave an enduring legacy".

The Legacy programme originated from the 14th conference held in Stavanger, Norway in 1994. Following the Congress the surplus funds were put towards the creation of the Norwegian Petroleum Museum. Featuring some of the most striking architecture in the country the museum is home to a number of interactive, hands-on exhibits that educate visitors about oil and gas about the origins and developments in the Norwegian petroleum industry.

Since then the World Petroleum Congress has established a legacy in every nation that has hosted the event. The 16th Congress's legacy was the Millennium Sponsorship Programme in Canada, a fund that can sponsor 200 post-secondary students in several petroleum-related fields annually until 2009. Other legacies have also included the WPC Educational Fund in Brazil and the World Petroleum Congress Legacy Trust, in South Africa.

The concept of sustainability
The congress is also the WPC's forum to introduce new ideas and to highlight areas that the oil and gas industry needs to look at improving. At the 2000 Congress in Brazil the WPC promoted the concept of sustainability as the core element of the event. Under the title: "The Petroleum Industry: Excellence and Responsibility in Serving Society" the congress brought together environmental groups such as Greenpeace and Conservation International and high-level speakers from the largest oil and gas companies in the world. The 17th World Petroleum Congress also saw 30 governmental, non-governmental and business organisations engage in discussions in a unique forum called the Social Responsibility Arena.

Dr Riemer remains confident that if the industry constantly evolves to meet the challenges that the WPC highlights then it can prosper. "The industry’s response to these issues can never remain static. Oil and gas companies must adapt to shifting priorities, new interests and changing attitudes. The growing importance of sustainability and social issues is indicative of this readiness to change,” he said.

“The years ahead will see significant changes in energy production and the way the world uses it. The oil and gas industry is playing a positive and important role in affecting these changes as it meets the challenges ahead. Though admittedly, the oil and gas industry has some way to go, many of these challenges are already being tackled. The future will bring new and enhanced opportunities to deal with these issues and others as they arise,” Dr Riemer added.