with respect to sector development and the related risks and opportunities. Such choices are effective, however, only if they are closely linked to institutional capacity and country context.12 There is a necessary caveat to these remarks about the supply of knowledge in the EI field. Throughout, the assumption is made that the main players on the governance stage, and governments in particular, are able to recognize their need for greater knowledge of the EI sector and are willing to do something about it. A great deal is known about how to avoid the negative effects of oil, gas, and mining development, and even more knowledge is now in the mainstream about how to tackle legal, contractual, fiscal, and revenue management issues. However, there will always be some who will prefer opaque arrangements that leave scope to conclude deals on terms that are rarely published. Such arrangements may be concluded by governments, companies, or individuals within them for short-term business or personal advantage. They are unlikely to prove sustainable or capable of delivering benefits to the country or its peoples. The Sourcebook is not intended for those who are unwilling to harness specialist knowledge in the interest of sustainable economic and social development. 1.4 BRIDGING THE KNOWLEDGE GAP
The Sourcebook has been developed as a contribution to the new sources of demand. Drawing on many new sources of knowledge, particularly on an emerging network of knowledge centers and suppliers, it strives to present a compendium of established good practice. It is informed by recent research, includes a critical exposition of principles, and provides analysis of relevant experiences and commonly used instruments. It seeks to meet demand by presenting knowledge in both print and electronic forms, providing a concise, comprehensive, and dynamic guide that nonetheless notes the diversity of opinion and experience. It is guided by the awareness that without good governance and management, dependence on extractive industries can lead to poor development outcomes, including environmental degradation and social dysfunction that will undermine the sustainability of development. The Sourcebook is therefore much more than an assembly of knowledge. It brings together diverse kinds of knowledge on the kind of operational issues that are driving demand and frames them in a new way. It advances and expands the knowledge base on practical approaches to the management of resource wealth. Its “creation” of knowledge includes rigor, accessibility, and the manner in
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OIL, GAS, AND MINING
which it shares knowledge and information with users. Further, it aims to provide an overarching framework for the program of education now needed in this field, to guide knowledge exchange in the form of workshops, seminars, and symposia. The Sourcebook is based on four premises: 1. The oil, gas, and mining—or extractives—industries, or “extractives,” have sufficient common characteristics to justify a unified assessment: the resources are taken from below the surface of land or seabed by human efforts and converted into sustainable opportunities. Key elements follow from this: the importance of geology, ownership by a surface owner, and the need for some degree of complex technology. The infrastructure-heavy linkages to extractives, such as transportation networks or grids, and complex manufacturing processes (crucial to both gas and mining) have fewer claims to homogeneity and can be treated as analytically distinct. 2. Successful management of the oil, gas, and mining sectors requires that all stages of the value chain, and any cross-cutting themes such as transparency and accountability, be carefully considered and viewed as belonging to a whole. Neglect of one aspect may undermine success in dealing with another. 3. No single approach will suit all states. The Sourcebook is a guide to good practice, which will require adjustments to differing state contexts. The arbiters of that adjustment process reside in the states. Not only will they need to tailor good practice to a particular national context, but also a particular policy is unlikely to suit each province or project or be suitable over time if circumstances—for example, prospects for extraction—change. 4. A focus on applied knowledge will serve the user well only if it is accompanied by a discussion of principles or general theory. Even if the Sourcebook provides the user with a very brief introduction to those general principles as they apply to topics such as awards of rights or revenue management, and furnishes guidance on further reading, it seeks to introduce and share with the user the core assumptions that often guide practice in the extractive industries. The value chain
The concept of a value chain for the extractives sector helps drive the Sourcebook’s structure. This framing device captures both the comprehensiveness and the integration of core activities. See figure 1.2.
