Energy companies slow to prepare for new Dodd-Frank requirements

Energy companies have not been quick to prepare for reporting requirements established under the Dodd-Frank Act, according to a Grant Thornton survey.

The annual Survey of Upstream U.S. Energy Companies found that while 72 percent of executives who responded said their companies will likely be impacted by new rules under Dodd-Frank, nearly two-thirds (65 percent) have not begun to implement the documentation and reporting required by the law.

Title VII of Dodd-Frank requires the Commodity Futures Trading Commission and Securities and Exchange Commission to promulgate rules defining the range of swaps products and participants. The definitional rules are not yet complete, but energy companies that deal in derivatives will face Dodd-Frank's mandatory clearing requirements ”“”“ and the compliance obligations that accompany them ”“”“ if their operations do not fall within a special exemption for derivatives end users. Twenty-eight percent of executives said their companies will likely qualify for the impending end-user exemption.

The study found that price volatility in natural gas and crude oil markets is energy executives' top concern but industry leaders are generally confident in the coming year's prospects.

The majority of U.S. oil and gas senior executives (77 percent) said they believe new reserves found in the U.S. will serve to shift or change the nation's dependence on foreign oil.

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