Oil & Gas

As the demand for and availability of low-carbon energy sources rises, and with the economic slowdown caused by the novel coronavirus, the fossil fuel industry is facing serious financial challenges. These challenges are creating the conditions for large-scale fraud, including the concealing of environmental and safety problems.

With oil and gas companies recently facing unprecedented financial challenges, corruption is a concern in this industry more than ever. Although much attention has been paid to the impact of the Covid-19 pandemic on the oil and gas industry, the financial challenges facing the oil and gas industry are deeper and more structural.

With executive compensation tied to either stock prices or the discovery and development new reserves, oil and gas executives already have substantial incentive to engage in securities fraud, and as the industry faces greater financial challenges, the pressure to engage in fraud will likely increase.

As fossil fuel companies struggle financially, they are ramping up efforts to tap into federal coronavirus relief funds. Will they engage in fraud at taxpayers’ expense?

There are two types of fraud that will need to be guarded against as oil and gas companies grapple with solutions to this challenge: exaggerated commitments of future carbon reductions and fraudulent financial statements.

Oil and gas drilling and transport poses a significant threat to the environment, one that is often understated by the industry.

Offshore drilling poses a significant threat to the environment, one that is often understated by the industry.

NWC has taken a look at several high profile cases in the oil and gas industry to highlight the type of fraudulent activities that can occur.

While there is not a whistleblower law specific to the oil and gas industry, there is a large framework of U.S. laws that address fraud in the oil and gas industry. These laws can protect and reward whistleblowers with knowledge of fraud.