Results achieved through the Oil for Development cooperation in 2015

‘Establishing new regulations or routines that clarify responsibilities. Contributing to competence enhancement in a complex field. These areas are typical of Norwegian support through the OfD Programme,’ asserts Petter Stigset, who heads the OfD secretariat in Norad.

It may sound bureaucratic and vague, and is less tangible for the world at large than a vaccine or a new school building. Nevertheless, Børge Brende, the Norwegian Foreign Minister, describes the OfD Programme as one of Norway’s most valuable instruments in the effort to achieve the Sustainable Development Goals by 2030.

Long-term results

The OfD programme’s annual report provides a snapshot from 2015.

‘It takes time to achieve results, and the report provides good examples of how the many long meetings and emails between colleagues help to establish clearer parameters for the petroleum sector, more effective management and a greater opportunity for public scrutiny,’ says Stigset.

These are some examples of the results of long-term work:

• In Mozambique the authorities have now finalized a database that includes geological and seismic data, an overview of the resource base and resource estimates, licensing agreements and key information on oil companies.
  
  
• In Tanzania, the authorities and oil companies are practising damage limitation in the event of oil spills, based on a national oil spill contingency plan. In 2015 they carried out the first full-scale emergency response exercise.
  
  
• In Uganda, the government adopted a strategic environmental impact assessment, with accompanying recommendations and implementation framework.

Read more about each of these examples in the annual report for 2015

Less corruption

A clear regulatory framework and well-defined responsibilities mean fewer opportunities for corruption. It is also easier for the authorities to set reasonable demands on companies when backed by legislation, linked to the state’s share of revenues as well as environmental concerns.

Predictable framework conditions also increase the opportunity to attract investors, especially from the most reputable companies.

In 2015, the draft of a new Petroleum Act for Ghana was completed with technical support through the OfD Programme. Extensive work on regulations was also carried out in key areas such as fiscal measurement, data management and HSE, as well as more general petroleum regulations.

Effective management

‘Regulatory conditions are not sufficient. A country’s authorities must also be able to fulfil their key responsibilities in order to facilitate and monitor petroleum activity. The OfD Programme helps to enhance competence in the public sector,’ says Stigset.

Lebanese authorities have boosted the competence of their staff with regard to accounting and auditing mechanisms in the petroleum sector and negotiation techniques in connection with the execution of licensing rounds.

An environmental inspection of the Jubilee field in Ghana was also performed – a critical management responsibility to ensure proper handling of waste and chemicals.

The OfD work in the area of financial management was reinforced in 2015, including a new institutional cooperation with Statistics Norway.

Key personnel in the Uganda Bureau of Statistics enhanced their competence regarding oil investment statistics, company registry data and how the petroleum sector is covered in national accounts.

Fall in the oil price and conflict

The low oil price affected project planning by the oil companies, and in many regions the authorities found that licensing rounds or other negotiations had to be postponed. It became necessary to adjust revenue forecasts.

Several countries in the OfD portfolio were plagued by conflict in 2015, or otherwise found themselves in fragile situations. Instability, economic crisis and political unpredictability affected the entire government apparatus, business climate and people’s livelihoods, and also the OfD programme.

In South Sudan, for example, activities were limited and conducted outside the country. Although several programme milestones were achieved, the challenges associated with the political and military conflict were extensive. Genuine progress towards the overall objective of proper petroleum resource management will depend on stabilization and implementation of the signed peace accord.

A wholesome openness to scrutiny

Academia and civil society organizations were also supported by the OfD programme in 2015.

Along with local partners, the Norwegian People’s Aid programme Accountable governance of oil revenues in Angola helped to carry out budget analyses in Angola. These formed the basis for advocacy work vis-à-vis relevant ministries and parliamentarians.

In cooperation with partner authorities, the OfD programme also emphasized the importance of making information available to the general public.

In Mozambique, the National Petroleum Institute instituted a dialogue with civil society actors and updated their websites in accordance with their need for information regarding a licensing round. The authorities in Tanzania published an environmental atlas of the coastal areas, giving all interested parties access to the empirical data which are also used to follow up the commitments made by the oil companies.

In 2016 the OfD programme is continuing its work in 12 countries, including the programmes in Myanmar and Kenya which are in the planning phase.