Environmental dimensions of petroleum sector governance
Download
Report
Transcript Environmental dimensions of petroleum sector governance
Oil for Development – OfD
Stanford
March 13, 2009
Petter Nore
www.norad.no\ofd
Januar 2008
Overview
• Description ”Oil for Development”
• Lessons learnt from the program
• Issues for further discussion :
•
Security of supply and OfD
Introduction
• Norway with petroleum assistance from mid 1980s
Vietnam\Mozambique\Angola
• Oil for Development (OfD) founded in 2005. Aim to
strengthen environmental, governance and financial
aspects of assistance
• Operates in 10 core countries plus regional programs
and 15 ”light” assistance countries.
• Close links with ”Clean Energy for Development” (A
new Norwegian program promoting clean energy
solutions in cooperating countries)
•
OfD – main objectives
• Help cooperating countries to
•
•
•
Generate sustainable
eonomic growth
Promote the welfare of the
whole population
Be environmentally benign
• Combat the ”resource curse”
Core countries
How we work
• Along the integrated petroleum chain
Limited downstream activities
• Demand driven
• No export of the ”Norwegian model”;
• Share experiences
• Enter where ”we can make a difference” and
where there is a clear demand
•
OfD – who we cooperate with
• National governments
• Civil Society (both Norwegian and international)
• World Bank\ African Dev. Bank\ IMF\ UNDP\ EITI
• Norwegian ministries
• Norwegian and international oil and service
companies; where appropriate
OfD and civil society
• Civil society (incl. media) plays a crucial role in
preventing the resource curse
• OfD cooperates with Norwegian and international
NGOs
Aim is to build capacity among civil society
organisations in the South
• 6 Norwegian NGOs and one international NGO have
received funding for 2008 (20 mill NOK)
OfD – our foundation
OfD is built around three integrated
themes:
1. Resource management
2. Environmental protection
3. Revenue management
Principles of good governance, transparency and accountability are a
fundamental part of the three themes
Resource management
• Strengthening of local institutions (ministries &
directorates)
• Development/assessment of petroleum legal
frameworks
• Framework for exploration and production of
petroleum
• Resource databases
• Strategies for transparent licensing and tendering
processes
• Policies to stimulate technology development and
the involvement of local industry
Environmental management
• Build environmental management capacity within the
•
•
•
•
sector
Basic legislation, rules and regulations covering
environmental dimensions of the petroleum sector
Minimise discharges from activities
Environmental impact assessments
Manage gas flaring and other national/global climate
challenges that are directly related to the petroleum
industry
Revenue management
• Design, management and
control of tax regime for the
extraction of oil and gas
(Government take)
• Transparency and
accountability around
payments by oil companies
(EITI)
• Planning and execution of
government budgets
• Management of the financial
savings (oil fund)
Transparency, anti-corruption
• Open bid and tendering processes
• Transparency about licenses and contracts
• Transparancy about payments by oil companies
• Extractive Industries Transparency Initiative (EITI)
• IMFs Guide on Resource Revenue Transparency
Ofd activities, NOK million (1USD=5NOK)
Core activities, percent
Afghanistan; a case-study
• OfD engaged in a number of complicated states
(Sudan\Iraq\Palestine\Afghanistan)
• Afghanistan a case study of what is feasable in such
situations\what are the key uncertainties
Afghanistan
• OfD has worked in Afghanistan for two years
A combination of anti-poverty\development and
foreign policy considerations
• Has helped to create a legal petroleum framework
• A new Petroleum Law enacted
• Draft regulations accepted by the government
•
Afghanistan (2)
• Has given advice to Afghan authorities how to
organize first concession round for three blocks in
Northern Afghanistan
• OfD is helping in capacity building for government
•
Data management and environmental issues
Afghanistan (3)
• Uncertainty 1: The market for gas
Gas for power\export; Who will guarantee the
demand?
• Uncertainty 2: Which companies to bid in today’s
financial situation?
• Uncertainty 3: The actual implementation of the legal
and regulatory system
•
Lessons learnt from OfD
program
Ten Lessons Learnt
1.
2.
3.
4.
Heavy demand for the program
-Rapid growth in environmental and financial advice
-Less demand for governance\ anti corruption; but
increasing
Presents options; not solutions
-Can’t force countries to implement policies
Ensure independence of advice from commercial sector
-But part of Norwegian foreign policy agenda
Keep a Long run (5-10 year) perspective
Capacity building\Institution building takes time
Ten Lessons Learnt
5.
6.
Keep a short term capacity to react
Civil society and transparency; necessary but not
sufficient factors for success
7. Concentrate number of countries\programs
-25 countries and regional program far too many
8. Anchoring in the South
-Too many experts from the North fly in\out
-South\South cooperation\ capacity building must be
strenghtened
9. Better coordination between donors a must
Ten Lessons Learnt
10. Norway; a relatively easy ”brand” to sell
•
Reasonably successful resource rich country
•
Non-imperialist past
•
OfD part of Norwegian foreign policy
•
A balance between interests of state and companies
•
But; Norwegian society\politics\economy differs
fundamentally from situation in other commodity rich
countries
Security of Supply and OfD
Security of Supply
There are suffient physical hydrocarbons in the world
Problem is political: To produce and deliver
resources. We have seen the end of cheap oil NOT of
oil itself
Top of the international agenda
Europe\Ntl gas imports from Russia
US: Crude imports\energy independence
Security of Supply
History
Churchill WWI\Persia\English navy
1973 oil embargo
Ukraine cutoffs of Russian gas
Two Gulf Wars
Two aspects of Security of Supply
with limited relevance for OfD
Physical cut-off of energy
Temporary damage?
The producers need to sell their products in the
end
Security of Demand
Key concept in the gas business used especially
by Russia
Third factor; OfD can play a role in
encouraging long run supplies
Foster increased willingness to invest by IOCs
Higher risk means less investment. Risk premiums
in excess of 10% pluss do not encourage
investments (e.g. Sudan)
IOCs don’t want weak petro states
IOCs want stable legal and regulatory frameworks ;
political predictability and stability
These are also the aims of OfD
World supply less than potential
”Resource nationalism” due to unbalanced
historical record. Little spinoffs\limited transfer of
technology\weak capacity building ?Bolivia, Iran,
Russia?
Weak state capacity ?Iraq, Afghanistan?
Consequences of the ”resource curse” (weak
bureaucracy\internal strife) holds back further
expansion ?Nigeria, Sudan?
OfD can encourage”win\win” situations between
resource states and Western technology
Summary Security of Supply
Link between ”resource curse” and security of supply
OfD can encourage”win\win” situations between
resource states and Western technology
OfD can foster increased willingness to invest by
IOCs