Annual Meeting 2020

The 8th Annual Meeting of the New Producers Group took place from 1–3 December 2020, with a focus on fostering resilience in emerging producers.

The meeting was held in the context of the COVID-19 pandemic, which has precipitated a crash in oil markets, hampered or halted operations across the hydrocarbon sector and caused many oil and gas investments to be delayed or shelved. In addition to these immediate effects, there will be long-term ramifications associated with the global energy transition towards a lower-carbon economy.

The meeting focused on how new producers can adapt their approaches in light of the shocks from the pandemic, and the prospects that the global energy transition will precipitate significant changes in oil and gas markets.

At the outset, the group’s organizers encouraged participants to see the meeting as an opportunity to rethink their assumptions about the value of the oil and gas sector to their countries, and to work together to develop resilient strategies that can benefit emerging and established producers alike. Acknowledging apprehension over the uncertainty of the moment and the long-term ramifications of the global energy transition, the host organizations emphasized the value of capacity building and collaboration across agencies, nationally, regionally and internationally.

A summary of the Annual Meeting is available at the link below.

Governance Challenges for Emerging Oil and Gas Producers

This paper presents key questions of concern to emerging oil and gas producers and lays out possible policy options. These producers face a particular set of governance challenges because they are often faced with capacity constraints and have limited information on their resource base. There is a wide variety of national circumstances that affect which policy and investment options are available to them, such as the size of the resource base, state administrative capabilities and oil and gas experience. The paper focuses on two sets of policy challenges. One relates to designing the licensing terms and sector legislation in a manner that attracts the most qualified investors under terms that are beneficial to the country in the long-term. The second is to set up capable institutions to oversee and monitor resource development. This challenge is compounded in a context of uncertainty about the size and lifespan of reserves and, therefore, also about future revenues.

The paper is available to download at the link below.

Guidelines for Good Governance in Emerging Oil and Gas Producers

Guidelines for Good Governance in Emerging Oil and Gas Producers 

Over the last few years significant new oil and natural gas reserves have been discovered in East and West Africa, as well as in the Eastern Mediterranean, the Caribbean and the Asia-Pacific region. These recent discoveries have very quickly added several new countries to the ranks of the world’s oil- and gas-producing nations, and these emerging oil and gas producers have shown a strong interest in receiving advice on governance. They are keen to avoid the mistakes that have led to accountability failures in other more established producers, and which have prevented some producers from reaping the full economic benefits of their resources. The purpose of these Guidelines is to help emerging producers and the groups that advise them to think critically about the policy options that are available, and that would be most effective during the first stages of exploration and development, or during a restructuring of the country’s oil and gas sector. The goal is not to produce a complete guide to governance of the petroleum sector, but rather to offer guidance on making effective decisions about the structure and rules of the sector in an imperfect context.

Guidelines for Good Governance in Emerging Oil and Gas Producers – French

Au cours des dernières années, d’importantes réserves de pétrole et de gaz naturel ont été découvertes en Afrique de l’Est et de l’Ouest, ainsi qu’à l’est du Bassin méditerranéen, dans les Caraïbes et dans la région Asie-Pacifique. Ces découvertes récentes ont vu très rapidement plusieurs pays rejoindre les rangs des nations productrices de pétrole et de gaz, et ces producteurs pétroliers et gaziers émergents ont manifesté un intérêt considérable à recevoir des conseils en matière de gouvernance. Ils ont particulièrement à cœur de comprendre les erreurs qui ont mené à un manque de responsabilisation chez d’autres producteurs plus expérimentés, et qui en ont empêché certains de récolter tous les avantages économiques de leurs ressources. L’objectif de ces Directives consiste à aider les producteurs émergents ainsi que les groupes qui les conseillent à porter un regard critique sur les options de politiques susceptibles de s’avérer plus efficaces dans le cadre des premières phases d’exploitation et de développement, ou en cas de restructuration du secteur pétrolier et gazier d’un pays. L’objectif n’est pas de produire un guide complet sur la gouvernance du secteur pétrolier, mais plutôt de proposer des conseils visant à une prise de décision efficace quant à la structure et aux règles appliquées dans un contexte imparfait.

Guidelines for Good Governance in Emerging Oil and Gas Producers – Portuguese

Durante os últimos anos, foram descobertas novas reservas de petróleo e gás natural na África Oriental e Ocidental, assim como na zona Ocidental do Mediterrâneo, Caraíbas e Ásia-Pacífico. Estas recentes descobertas adicionaram muito rapidamente vários novos países às listas mundiais de nações produtoras de petróleo e gás, sendo que estes produtores de petróleo e gás emergentes demonstraram forte interesse para receberem aconselhamento sobre gestão. Pretende evitar os erros que conduziram a falhas de responsabilidade por parte de outros produtores mais estabelecidos e que impediram que alguns produtores colhessem as vantagens económicas plenas dos seus recursos. O objetivo destas Diretrizes consiste em ajudar os produtores emergentes e os grupos que os aconselham a pensar de forma crítica acerca das opções de políticas mais eficazes durante as primeiras fases de exploração e desenvolvimento, ou durante a restruturação do setor nacional de petróleo e gás. O objetivo não consiste em produzir um guia completo sobre a gestão do setor petrolífero; em vez disso, pretende-se oferecer orientações sobre como tomar decisões eficazes acerca da estrutura e das regras do setor num contexto imperfeito.

Guidelines for Good Governance in Emerging Oil and Gas Producers – Swahili

Katika miaka michache iliyopita kiasi kikubwa cha akiba mpya ya mafuta na gesi asilia kimegunduliwa katika Afrika Mashariki na Magharibi, kama vile katika Bahari ya Mashariki, Caribbean na kanda ya Asia-Pacific. Uvumbuzi huu wa hivi karibuni uliongezea kwa haraka sana nchi kadhaa mpya kwa safu ya mataifa ya kuzalisha gesi na mafuta duniani, na hawa wazalishaji wanaoibuka wa mafuta na gesi wameonyesha nia imara katika kupokea ushauri juu ya Usimamiaji bora. Wamekuwa makini kuepuka makosa ambayo yamepelekea kushindwa katika uwajibikaji miongoni mwa wazalishaji walio imara zaidi, na ambayo yamezuia wazalishaji wengine kuvuna faida kamili za kiuchumi kutoka kwa rasilmali zao. Madhumuni ya mwongozo huu ni kuwasaidia wazalishaji wanaoibuka na makundi ambayo huwashauri kufikiri kwa umakinifu kuhusu chaguo za sera ambazo zitakuwa na ufanisi zaidi katika hatua za kwanza za utafutaji na ukuzaji, au wakati wa kuunda upya sekta ya kitaifa ya mafuta na gesi. Lengo sio kutoa mwongozo kamili wa Usimamiaji wa sekta ya petroli, lakini badala yake ni kutoa mwongozo wa kufanya maamuzi ya ufanisi kuhusu muundo na sheria za sekta katika muktadha wa mazingira yasiyo kamili.

Left Stranded? Extractives-Led Growth in a Carbon Constrained World

 

  • Throughout the commodities boom of the last decade, multilateral banks, donor agencies and investors joined hands in promoting or supporting ‘extractives-led growth’. Their approach assumes that low-income countries with fossil fuel, mineral or metal reserves will be able to deploy them for economic development. The resulting assistance and policy advice has generally had little or no connection to parties’ broader commitment to low-carbon development.
  • Two global factors now seriously challenge the extractives-led growth model. The first is the recent fall in oil prices and the longer-running downward trend in mined commodities prices. With most exporters now facing a period of rising deficits and debt, newer producers such as Ghana and Mozambique must revise their expectations for growth. The second is climate change and the longer-term risks to export markets from action to reduce greenhouse gas emissions.
  • The concept of fossil fuels as ‘unburnable carbon’ or ‘stranded assets’ has little traction in low- to middle-income countries, especially when set against urgent poverty alleviation and infrastructure needs. Yet emissions regulation, fuel subsidy reforms and new technologies, particularly across Western and Asian markets, will affect the prospects for new and prospective exporters.
  • Most countries banking on extractives-led growth have also committed to national visions for green growth and sustainable development. Their 2015 ‘intended nationally determined contributions’ (INDCs) demonstrate ambition to create a range of social goods through climate resilience and emissions management measures. Without careful handling, the political and investment emphasis on extractive-sector development could derail implementation.
  • In contrast to prevailing pressures to develop reserves quickly, donors and advisers should help put back on the table the full range of options available to a country. This includes choices to ‘go slow’, in tandem with boosting local capacity to benefit from investments, business and job opportunities; to integrate extractives development into sustainable economic diversification plans from the outset; and the choice not to extract or expand the sector.
  • To make responsible policy choices, new and prospective producers need better information. This applies not only to their own resources and the full costs of producing them (including social and environmental impacts), but also to deciding whether and how to use resources at home, and to understanding the future risks to export markets for their products given evolving energy and carbon policies globally.
  • Practical conversations regarding low-carbon development aims for extractives-rich low-income countries might best be framed in terms of national goals for sustainable economic diversification. They should place strong emphasis on energy policy and pricing, industrial planning, investment in efficient, resilient infrastructure and the development of skills such as the management of carbon within national oil companies.

The report is available to download at the link below.