(Recasts with Senate vote, adds comment from EU in paragraph10)
By Ernest Scheyder and Nia Williams
HOUSTON/CALGARY, Feb 3 (Reuters) - A reversal of U.S.transparency requirements for the natural resources industrycould give American oil companies an edge over Canadian andEuropean rivals who face some of the toughest rules in theworld, according to company executives, legal experts and tradegroups.
The U.S. Senate passed a resolution early on Friday tooverturn the "resource extraction rule," an Obama administrationregulation that required companies to disclose taxes and otherpayments to foreign governments.
President Donald Trump is expected to soon sign theresolution killing the rule, which had been aimed atdiscouraging shady dealing in far-flung nations.
The rule was among a handful of regulations ushered induring the final months of Barack Obama's presidency that theRepublican-controlled Congress has targeted as overly burdensomefor the U.S. economy.
Overturning the regulation leaves Canadian and Europeannatural resource companies with far more stringent reportingstandards for payments to foreign governments than U.S.behemoths like Exxon Mobil Corp and Chevron Corp.
Certain details of contract negotiations and terms of bidsto access reserves must be divulged under the Canadian andEuropean rules. That could provide American companies a glimpseof their rivals' negotiating tactics around the globe, withouthaving to tip their hands in return.
"It definitely could put Canada at a disadvantage because weare fairly stringent on our rules, both domestically andinternationally, on how our companies operate," said MarkSalkeld, chief executive officer of the Petroleum ServicesAssociation of Canada, an industry trade group.
European oil company Royal Dutch Shell Plc,meanwhile, pointed out that a U.S. reversal of the transparencyrequirements would go against the broader global trend in thenotoriously murky industry.
"The trend that we have, with access to information, withbringing distant countries into our space all the time, we willhave to live with that. I don't think any single politicalsystem can turn that around," Shell CEO Ben van Beurden toldreporters when asked about the proposed U.S. regulation change.
A European Commission spokeswoman, Vanessa Mock, toldReuters that Europe has no plans to weaken its own rules as aresult of the U.S. reversal.
'BANG FOR THEIR BUCK'
Required by the 2010 Dodd-Frank Wall Street reform law, theU.S. Securities and Exchange Commission's extraction rule wasfinalized last summer and was scheduled to take effect nextyear. Democratic proponents of the rule said it would help tocurb corruption in foreign nations.
Canadian and European regulations were modeled after theDodd-Frank efforts. But the rule was quickly targeted bycongressional Republicans after victories in the Novemberelection that brought President Donald Trump and hisanti-regulation, pro-energy agenda into the White House.
Trump has signaled a sweeping reduction in regulation tobolster the American drilling and mining industries, includingundoing Obama's initiatives to combat climate change.
Vivek Warrier, a partner at Calgary law firm Bennett Jones,said that could put Canadian companies at an even steeperdisadvantage.
"When a potential investor comes in, they will look at theadditional regulatory compliance costs that will impact Canadiancompanies and probably conclude there's better bang for theirbuck south of the border," he said.
Suncor Energy Inc, Canada's largest oil and gasproducer, said reporting on payments to foreign governments is aminor administrative burden. "But generally speaking we supportreporting payments to governments, as it contributes to greatertransparency," said Sneh Seetal, a Suncor spokeswoman.
Canadian Natural Resources Ltd and Cenovus EnergyInc, two Canadian oil producers, declined to comment.
American oil companies, including Exxon Mobil, meanwhile,say the regulation had threatened to put them at a competitivedisadvantage to huge state-controlled oil companies likeRussia's Rosneft Ltd and China's CNOOC Ltd.
"As publicly-traded companies, we have to compete globallywith state-owned companies who hold a large majority of provedreserves and have no similar transparency or reportingobligations," Exxon spokesman William Holbrook said.
Stephen Comstock, director of tax policy for the AmericanPetroleum Institute, said revoking the U.S. extraction rule is"a necessary step by Congress to establish sensible regulationsthat balance increasing transparency without diminishing ourindustry's competitive advantage."
Exxon and the API said they support an alternative schemewhereby a host country would report to its citizens at a regularinterval how much money in total was generated from extractiveindustries, without breaking out company details.
The U.S. oil industry also said the U.S. Foreign CorruptPractices Act would still remain in effect, prohibiting briberyof foreign officials.
(Reporting by Ernest Scheyder in Houston and Nia Williams inCalgary; Additional reporting by Lisa Lambert and Sarah Lynch inWashington, D.C., Ron Bousso in London and Alissa de Carbonnelin Brussels; Editing by Richard Valdmanis and Paul Simao)
