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10181. Qatar Petroleum and the Extractive Industries Transparency Initiative: Implications for State Companies in the Middle East and North Africa

Author:
Kaisa Toroskainen
Publication Date:
04-2021
Content Type:
Policy Brief
Institution:
Natural Resource Governance Institute
Abstract:
In many resource-rich countries, state-owned enterprises (SOEs) play a major role in collecting taxes and payments, selling oil, and contributing to government revenue from extractive industries. In the Middle East and North Africa (MENA) region, SOEs often control the end-to-end value chain of extraction. This briefing explores how becoming an Extractive Industries Transparency Initiative (EITI) supporting company can facilitate transparency of SOEs from non-EITI implementing countries in the MENA region. The EITI is a global standard to promote the open and accountable management of extractive resources. Fifty-four countries currently implement the EITI and commit to a set of disclosures along the extractive industry value chain as defined in the EITI Standard. Beyond national EITI implementation, extractive companies can become EITI supporting companies by committing to a set of expectations to advance sustainable development, transparent management of natural resources and by supporting the initiative financially. In this briefing, the author has provided an overview of how becoming an EITI supporting company has supported Qatar Petroleum (QP) in improving reporting and transparency, with a view of providing relevant lessons to the EITI and other SOEs in the MENA region. The briefing concludes with recommendations to the EITI, QP and other SOEs in the MENA region.
Topic:
Oil, Natural Resources, and Industry
Political Geography:
Middle East, North Africa, and Qatar

10182. Opportunities and Challenges for Senegal in Oil and Gas Production: Lessons Learned from Other New Producers

Author:
William Davis and David Mihalyi
Publication Date:
05-2021
Content Type:
Policy Brief
Institution:
Natural Resource Governance Institute
Abstract:
Senegal, with significant reserves of natural gas, appears to be on the verge of becoming a significant hydrocarbon producer. This resource wealth presents the country with opportunities, but also risks. NRGI's new paper reviews the recent experience of other “new producers”, mainly in Africa, and attempts to draw lessons for Senegal on how to make the most of its hydrocarbon resources, taking into account both the changing context due to the coronavirus pandemic and the ongoing transition to renewable energy. Countries face a number of challenges in managing revenues from natural resources. This brief focuses on some of the challenges affecting countries as they prepare for production from oil and gas finds. First, international experience has shown that a number of countries have succumbed to the “presource curse, where overoptimism regarding the future benefits from the sector undermines government policies and ultimately leads to disappointing outcomes. As such, it is important to manage public expectations around what the finds will mean for the economy, and resist pressure to embark on unsustainable borrowing, public spending or investment plans based on overly-optimistic forecasts of the revenues that will flow from these resources. There are also challenges around putting in place an appropriate governance framework to prevent revenues from being lost to tax avoidance/evasion and mismanagement. In the context of the coronavirus pandemic, these challenges are particularly difficult, as countries grapple with fears of losing out on investment, and weigh whether to use resource wealth to finance temporary spending needs to stabilize the economy.
Topic:
Oil, Natural Resources, Gas, Renewable Energy, COVID-19, and Revenue Management
Political Geography:
Senegal and Africa

10183. NRGI Impact: Demystifying Ghana’s Agyapa Royalties Deal

Author:
Natural Resource Governance Institute
Publication Date:
06-2021
Content Type:
Policy Brief
Institution:
Natural Resource Governance Institute
Abstract:
As the coronavirus pandemic struck Ghana in March 2020, its government introduced sweeping social and health measures, but with a hefty price tag: the IMF subsequently projected the government deficit to reach 9.5 percent of GDP. Ghana’s gold wealth was seen as a possible solution. The government proposed creation of a new company, Agyapa Royalties Ltd. The Agyapa plan involves assigning most gold mining royalties from Ghana’s industrial gold production to an offshore company and selling 49 percent of the shares for approximately $500 million. When information on the Agyapa IPO surfaced in social media in early August 2020, NRGI convened discussions with a group of key Ghanaian civil society organizations (CSOs). This group coalesced into a 25-member “Alliance of CSOs Working on Extractives, Anticorruption and Good Governance.” Analysis by NRGI and the CSOs exposed important governance vulnerabilities in the deal, including risk of undervaluation; loss of control over gold sector governance; loss of ability to repay existing loans; limited consultation and questions on transparency and accountability provisions; and corruption risks. NRGI helped the alliance to broaden its advocacy agenda beyond just seeking transparency around the deal terms and politically exposed persons involved. NRGI suggested solutions to ensure an adequate valuation of Ghana’s gold and to protect the sovereign rights of the government to adjust fiscal terms and control decisions made by Agyapa Royalties. The alliance held several press conferences which led Ghana’s top media to actively report on the deal. NRGI connected with key international media outlets, with the Financial Times and the Economist citing NRGI analysts and Ghanaian members of the alliance. Following two months of coordinated pressure from civil society, a special prosecutor’s report outlined potential corruption risks and infringement of procurement legislation, validating some of the risks raised by civil society. The future of the deal is still pending, but civil society successfully placed the issue at the top of the national agenda.
Topic:
Civil Society, Media, Journalism, COVID-19, and Revenue Management
Political Geography:
Africa and Ghana

10184. Surplus or Shortage? The Challenge of Setting a Domestic Supply Obligation for Tanzania’s Offshore Gas BRIEFING20 JULY 2021

Author:
David Manley and Thomas Scurfield
Publication Date:
07-2021
Content Type:
Policy Brief
Institution:
Natural Resource Governance Institute
Abstract:
One of the priorities of Tanzania’s new president is negotiating a way forward for the country’s long-planned offshore gas project. A key issue in this negotiation is the amount of gas that the government will take in the form of a domestic supply obligation (DSO). To increase the country’s energy supply, it wants a larger DSO than the currently agreed amount of around 8.5 percent of reserves. This report analyzes the implications of a larger DSO for meeting Tanzania’s energy needs, for the offshore project and the government revenues it can generate. It builds on previous NRGI analyses by the authors.
Topic:
Energy Policy, Natural Resources, Gas, Regulation, Legislation, Tax Systems, Commodities, and Revenue Management
Political Geography:
Africa and Tanzania

10185. Stuck in the Past: Lessons on Emissions for Developing Oil Producers

Author:
David Manley and David Mihalyi
Publication Date:
07-2021
Content Type:
Policy Brief
Institution:
Natural Resource Governance Institute
Abstract:
As much of the world slowly moves into a low-carbon future, a group of countries are firmly stuck in a fossil-fuel past. These are mainly countries rich in fossil fuel resources. This is not only a problem for the global target to limit the emissions of greenhouse gases, but it puts these countries under a “carbon curse”. Under this curse, people pay more for energy, might be locked out of trading opportunities with countries with carbon taxes, and breath dirtier air. These fossil fuel-rich countries provide a lessons for developing countries with fossil fuels that are still to industrialize. These are countries that still have time to change direction to avoid being stuck in the past, and move into a more prosperous and cleaner future. Key messages Most economies are slowly decarbonizing, but the economies of high-income, fossil fuel-rich countries are not. This is the case whether examining production- or consumption-based emissions. Low-income, fossil fuel-rich countries can learn from the experience of wealthier fossil fuel-rich countries. Remaining on their current path could mean that low-income, fossil fuel-rich countries could face high energy costs, exclusion from export markets, and failure to meet future climate commitments.
Topic:
Climate Change, Energy Policy, Oil, Carbon Tax, and Carbon Emissions
Political Geography:
Global Focus

10186. Recommendations for Strengthening the Role of the EITI in the Fight Against Corruption

Author:
Sebastian Sahla and Matthieu Salomon
Publication Date:
09-2021
Content Type:
Policy Brief
Institution:
Natural Resource Governance Institute
Abstract:
Corruption in the extractive industries is one of the biggest obstacles to the accountable and sustainable management of natural resources. While EITI has the potential to contribute toward the fight against corruption, the initiative is falling short in realizing this potential in many countries. NRGI’s new memo details recommendations for EITI to strengthen its relevance for anticorruption efforts. This memo builds on a review of EITI disclosures from around the world conducted by NRGI, the findings of which are summarized in a February 2021 report titled How Can Anticorruption Actors Use EITI Disclosures?.
Topic:
Corruption, Natural Resources, Sustainability, and Industry
Political Geography:
Global Focus

10187. Tying Their Hands? How Petroleum Contract Terms May Limit Governments’ Climate Policy Flexibility

Author:
Nicola Woodroffe
Publication Date:
09-2021
Content Type:
Policy Brief
Institution:
Natural Resource Governance Institute
Abstract:
The pathway to net-zero emissions will be a fraught one for many petroleum-dependent countries. Radical policy action is necessary to decarbonize the global economy , with significant economic implications for countries dependent on oil and gas revenues. The Intergovernmental Panel on Climate Change has warned that global warming will exceed 1.5 and even 2 degrees Celsius without deep emissions cuts. At the same time, the International Energy Agency has proposed a freeze on new development approvals for oil and gas fields from 2021 if we are to limit the global temperature rise to 1.5 degrees Celsius. Current and emerging producers may want to go beyond merely reacting to foreign governments’ or international oil companies’ evolving climate policies – they may seek to proactively decarbonize and build climate resilience in their own petroleum sectors. Yet the long-term contracts governments sign with companies for petroleum exploration and production may significantly limit this flexibility for decades. Have producer countries begun to modify petroleum contract terms in response to climate change and energy transition risks? To explore this, the author of this briefing reviewed 34 contracts and model contracts from 11 countries, signed or issued since the Paris Agreement. This review focused on stabilization, arbitration, and force majeure clauses. The contracts reviewed do not yet indicate a shift in these clauses to respond to climate change risks, and the need for government flexibility to take climate policy action. Producer governments should reconsider traditional contract clauses and assess and adapt their petroleum sector legal framework to address energy transition and climate change risks.
Topic:
Climate Change, Energy Policy, Government, and Transparency
Political Geography:
Global Focus

10188. NRGI Impact: Safeguarding Ghana’s Petroleum Funds and Ensuring a Resilient Recovery

Author:
Natural Resource Governance Institute
Publication Date:
11-2021
Content Type:
Policy Brief
Institution:
Natural Resource Governance Institute
Abstract:
Before the coronavirus pandemic struck Ghana, the country’s economy was relatively strong, with growth forecast at around 5.8 percent in 2020. A month after the country’s first recorded coronavirus case, with both national and global restrictions put in place, the IMF revised this figure down to 1.5 percent. The pandemic also exposed Ghana, with its reliance on mining and oil revenues, to sudden volatility in commodity prices. A significant drop in oil prices caused by the pandemic delayed government plans to increase oil production and reduced expected oil revenues, on which Ghana’s 2020 budget forecasts were built. In order to address short-term needs and raise funds to finance an ambitious coronavirus alleviation program, the government obtained a credit line of $1 billion from the IMF in April 2020, as well as support packages from the World Bank and the African Development Bank. But, with aims to reduce dependence on foreign funds, the government turned its attention to oil revenues to fund the pandemic response. Officials floated plans to free up around $200 million for contingency spending by amending the Petroleum Revenue Management Act (PRMA) to allow the use of the Ghana Heritage Fund and to request a cap on the Ghana Stabilization Fund. These were met with protests. The Ghana Heritage Fund was established to save and invest a portion of oil revenues in safe assets to benefit future generations once oil deposits are depleted. Around nine percent of petroleum revenues flow into this fund annually, which, as of June 2020, held around $608 million in allocations and interest on investments. The Ghana Stabilization Fund was set up to balance the budget in times of shocks to the economy and unanticipated shortfalls in oil revenues. The minister of finance, subject to parliamentary approval, can cap accruals to the fund. Excess funds above the cap can then be used for debt servicing or for contingency spending.
Topic:
Natural Resources, COVID-19, and Revenue Management
Political Geography:
Africa and Ghana

10189. National Oil Companies and Climate Change: Insights for Advocates

Author:
Patrick Heller, Greg Muttitt, Alexandra Gillies, Paasha Mahdavi, David Manley, Valerie Marcel, Joachim Roth, Lourdes Melgar, Francisco J. Monaldi, and Angelo Picciariello
Publication Date:
11-2021
Content Type:
Policy Brief
Institution:
Natural Resource Governance Institute
Abstract:
National oil companies are the “hidden half” of the global oil industry. The authors of this briefing write that climate and development advocates who seek to reduce fossil fuel supply and promote sustainable economies must engage with these state-owned companies, many of which are based in countries with high levels of poverty.
Topic:
Climate Change, Energy Policy, Oil, Natural Resources, and State-Owned Enterprises
Political Geography:
Global Focus

10190. Transforming Livelihood Systems: Meeting needs in a changing world

Author:
Merry Fitzpatrick, Hassan Alattar Satti, and Manal Hamid Ahmed
Publication Date:
03-2021
Content Type:
Policy Brief
Institution:
Feinstein International Center, Tufts University
Abstract:
This is the second in a series of learning briefs under the Taadoud II: Transition to Development project, a collaboration led by Catholic Relief Services. The collaboration includes Catholic Agency for Overseas Development (CAFOD), Norwegian Church Aid (NCA), World Vision, and Feinstein International Center, Friedman School of Nutrition Science and Policy at Tufts University. The project is funded by UK Aid. The learning brief series aims to promote awareness and understanding of natural resource use and management in Darfur to support the Taadoud II program and wider programs and policies to effectively build resilient livelihoods. Livelihood strategies are the way people support themselves. People change their strategies as their opportunities, risks, and limitations change. A change in a household’s strategies can affect members of the household differently. Often changes that benefit a household as a whole increase women’s risk and labor burdens. Furthermore, when nearly all livelihood strategies depend on natural resources, changes to the strategies will change demands on natural resources. How one set of households changes the way they use natural resources will affect other households who also depend on those same resources. This could cause conflict over those resources and deplete them.
Topic:
Agriculture, Climate Change, Natural Resources, Food, Food Security, and Livelihoods
Political Geography:
Africa and Darfur