OITJ—Can’t you already get online information on company reports?
Zakaib—Yes. But the situation today is that for the SEC*’s EDGAR and the Canadian CEDAR, online data is in pdf documents. This makes for rather inaccessible data with a somewhat inconsistent presentation. There are commercial services like EDGAR Online which populate their proprietary databases for sale clients. XBRL, which used to be ‘XBFRL’ began five years ago when XML first came into vogue. The idea was to tag-up business information on company balance sheets. This would enable an XBRL repository of EDGAR type information. So you could extract say, Talisman’s Q2 2005 results and compare with peers for operating costs etc.
OITJ—What about different countries’ reporting requirements?
Zakaib—The spec of course needs tuning to different accounting jurisdictions and has support from accounting bodies such as AICA (US), CICA (CA) etc. Taxonomies have been developed for the US GAAP, C&I (commercial and industrial) and the Canadian GAAP. These taxonomies need further extension to embrace oil and gas reporting specifics.
OITJ—Like reserves reporting?
Zakaib—Exactly. The extension of these taxonomies to non financial reporting is hugely topical. This is where the real ‘juice’ of XBRL lies and is the object of industry collaboration, with pressure on the SEC, and with involvement of the SPE, API, WPC and other stakeholders. Sustainability disclosure and other Sarbanes-Oxley reporting are also relevant – with the drive to ‘triple bottom line’ reporting of economics, social and environment. A new global sustainability index is to be released in XBRL with support from Shell, BP and PetroCanada. This has backing too from the international Global Reporting Institute (GRI).
OITJ—What’s actually happening today?
Zakaib—One key development that took place earlier this year was the release of a new financial reporting markup language from the US-based EBR Consortium (www.ebrconsortium.org). The EBR General Ledger (EBR-GL) 2005 spec will be underpinned by XBRL. XBRL FR for financial reporting will be next. The idea here is to build a cross industry framework with vertical extensions, rolling in GRI and COSO Risk Management and SOX legislation. We are working on extending EBR to the oil and gas vertical.
Zakaib—My company and other interested parties like PriceWaterhouseCoopers are trying to move this forward. We are talking to POSC and PPDM about data exchange and reserve reporting—we don’t want to re-invent the wheel here. Much of this information is applicable to joint venture billing, land sales, seismic transactions and performance management. To derive meaningful key performance indicators today may involve getting data from 10 different systems, reserves, accounting, etc. XBRL could fix this by simplifying interoperability.
Zakaib—The XBRL organization (www.xbrl.org) released a new version of its GL taxonomy in July. We are currently in the process of setting up a Consortium for Oil & Gas Performance and Enhanced Reporting (COGPER), a neutral, open group which is to forward this initiative. A website, www.cogper.org, is ‘under construction’ but interested parties can email email@example.com for more.
OITJ—What will drive take-up, a regulatory stick or a performance carrot?
Zakaib—Perhaps the sticks of reserves and sustainability will do most. The SEC has had a voluntary XBRL filing program as of this spring. After which there is a strong chance that this will become one of the SEC’s official filing methods.
* Securities and Exchange Commission.
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