Governance of the petroleum sector
Congratulations to Professor Kwaku Appiah-Adu on conceiving this project and on his tenacity and perseverance in seeing it through successfully. I call his achievement a project simply because it was conceived and accomplished as a compendium of well-selected and mutually complementary contributions from several authors across five countries – Ghana, Trinidad and Tobago, Norway, Canada and the USA. The focus of the compendium is on the challenges facing emerging countries that are keen on securing sustainable economic growth.
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I also wish to extend my congratulations to the authors who are all recognised experts in their respective fields, on making the project a success.
The special attraction of this book lies in combining descriptive analysis, empirical studies and practical policy recommendations. Thought-provoking and instructive in every respect, the content is presented in a captivating and easily digestible style, covering a range of carefully selected subjects that an emerging oil-producing country cannot afford to ignore if it is to manage its petroleum resources effectively.
This compendium could not have come about at a better time. Over several decades, the petroleum sector has grown increasingly in importance within the context of industrial activity, national economies, global economy and geopolitics. In spite of the quest for new ways to meet the world’s energy demands over the last decades, petroleum still remains pivotal in ensuring that the global energy demand is met. Escalation in energy needs and the emergence of new demand patterns across the world accentuate the need for old and new petroleum-producing nations to try and meet global requirements in an adequate and timely manner.
However, the proper management of natural resources has for decades been the subject of extensive studies and comments by scholars. While the abundance of natural resources in a country is expected to result in economic blessings for its citizens, the experiences of many developing countries with natural resources are nothing to write home about. Sadly, many of these nations suffer from the ‘resource curse’ or the ‘paradox of plenty.’ The ailment makes countries with abundance in natural resources - specifically non-renewable resources like minerals and petroleum resources - have lower, and in many cases, negative economic growth, less democratic governments, and consequently worse development outcomes than countries less endowed with natural resources.
After decades of oil exploration, Ghana, a role model for Africa in many ways, has finally discovered oil in commercial quantities and is about to become an oil exporting nation. The question is: Can Ghana really be a trailblazer from which other African oil-producing nations can learn how to manage their petroleum resources effectively?
Over the last few years, I have had the privilege of sharing my experiences with Ghana in its preparation for the oil era. Many economic, political and social well-wishers of the developing world will join me in hoping that Ghana succeeds in delivering the expected benefits to its citizens and thus become a worthy example for other African oil-producing nations to emulate.
For countries that aspire to achieve the noble goal of soundly managing their petroleum resources, this book highlights a number of thematic areas that must be successfully handled. First, the country should have a well-considered and clear legislation based on a fundamental petroleum policy that receives wide support in the country from the beginning. Second, the sector must be governed effectively so that the interests of stakeholders are well aligned and effectively and justly reconciled when the need arises. Third, the petroleum-producing nation must ensure that transparency and stakeholders’ participation are entrenched in the decision-making process.
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Again , the country should manage operations and the petroleum revenue so as to turn its resource wealth into sustainable and equitable development.
it is also critical for the host nation to safeguard security as well as prevent any harmful impact from petroleum operations on the environment, the economy and way of life.
While each petroleum-producing nation has to develop an approach that best fits its particular social aspirations and economic objectives, there are always lessons that can be learned from the experiences of other countries that have succeeded in making the resource a blessing.
The chapters of this book address s important aspects of the issues mentioned above. In doing so, the book deals with a range of factors that are critical to the success of managing petroleum resources and hence requires close attention by emerging petroleum-producing nations.
the book makes a significant contribution to the literature on oil and gas, particularly with respect to developing economies. Interestingly, the style of the text makes it of value to a wide spectrum of readers. These include personnel involved in the petroleum industry, particularly technical staff involved in policy making in both oil companies and government agencies.
Additionally, the book is strongly recommended to readers who wish to acquaint themselves with the dynamics of the petroleum industry. I also believe that scholars in business schools as well as engineering institutions, business executives, consultants and policy makers will find the contents of this book instructive and an invaluable reference material.