Finding the missing millions

The document outlines a framework for analyzing payments made by oil, gas, and mining companies to governments. It details ten specific tests—ranging from simple checks of payment types to complex revenue forecast comparisons—designed to identify 'red flags' or discrepancies that may indicate revenue loss due to bad deals, tax avoidance, or lack of enforcement. The guide emphasizes the use of supplementary data, such as fiscal terms and international commodity prices, to verify the accuracy of company disclosures.

• Governments typically lose extractive sector revenues through three primary channels: negotiating 'bad deals' (often due to corruption or inexperience), company use of 'aggressive tax avoidance strategies', or failure by government officials to enforce existing rules.
• The handbook defines a 'red flag' as a discrepancy between an expected payment and an actual payment, noting that such flags are not definitive proof of wrongdoing but are starting points for further inquiry.
• One-time payments, such as signature bonuses and capital gains tax, are identified as particularly high-risk for 'illegitimate diversion' because they are often very large and not integrated into formal budget processes.
• Analysis of 'value-based' or 'ad valorem' royalties is relatively straightforward because they are typically a fixed percentage of the sale value of the commodity produced and sold.
• Profit-based taxes, such as corporate income tax, generally only become substantial after a project has reached a 'mature production phase' and initial investment costs have been recovered.
• Under-reporting the true market value of a commodity is a major source of revenue loss, particularly when commodities are sold to affiliated companies to shift profits out of the producing country.
• Comparing reported payments against updated revenue forecasts—adjusting for actual production volumes and commodity prices—is one of the most effective ways to identify revenue loss.
• In production-sharing contracts, the 'cost recovery limit' or 'cap' allows analysts to estimate the minimum government share of 'profit oil' during the early years of a project.

APA

Global Witness (n.d.). Finding the missing millions. https://globalwitness.org/en/campaigns/oil-gas-and-mining/finding-the-missing-millions/

Chicago

Global Witness. Finding the missing millions. n.d. https://globalwitness.org/en/campaigns/oil-gas-and-mining/finding-the-missing-millions/.

Wikipedia

{{cite report |author=Global Witness |title=Finding the missing millions |url=https://globalwitness.org/en/campaigns/oil-gas-and-mining/finding-the-missing-millions/ |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{globalwitnessndfinding, author = {{Global Witness}}, title = {{Finding the missing millions}}, institution = {Global Witness}, url = {https://globalwitness.org/en/campaigns/oil-gas-and-mining/finding-the-missing-millions/}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }