Oil for development - Annual Report 2013

Eight years into its existence as a programme, OfD continues to experience a high demand for assistance.

In 2013, the OfD country portfolio counted 18 countries in Africa, Asia, Latin America and the Middle East, 15 of which were active cooperation programmes.

These countries all face different challenges and opportunities, but share an aspiration to make the most of their natural resources and have turned to Norway for assistance. For many of them, the petroleum sector is increasing in significance. In East Africa, for instance, Mozambique, Tanzania and Uganda have made game-changing discoveries of oil and gas in the last few years. In other OfD partner countries, including South Sudan, Timor-Leste and Iraq, rents from petroleum production already constitute a major part of national revenue. The way in which these countries harness the petroleum resources will be a decisive factor in their future development.

2013 saw important achievements in several OfD country programmes:

• In Ghana, the new Petroleum Exploration and Production Bill was completed and submitted to Parliament for approval, and the Petroleum Commission properly established itself as the upstream regulator. A Strategic Environmental Assessment on the consequences of oil and gas exploration and production was successfully completed after three years of Norwegian assistance.
• In Mozambique, a revised Petroleum Law, extended to address LNG (Liquefied Natural Gas) specifically, was presented to Parliament. The civil society platform for the extractive industry, now hosted by the NGO Centro Terra Viva, mobilized and built capacity in civil society to influence extractive industry developments.
• In South Sudan, the Petroleum Revenue Management Bill was approved by the two Houses of Parliament and awaits the President’s signature for enactment. The Ministry of Finance, Commerce and Economic Planning (MoFCIEP) and the Central Bank of South Sudan entered into a cooperation agreement that covers the establishment and operational procedures of the Petroleum Revenue Account, into which all petroleum-related revenues shall be transferred.
• In Sudan, a petroleum policy working group was established and initiated work on recommendations for a new petroleum policy. The General Directorate for Environment and Safety (GDES) in Sudan carried out audits of the operator’s HSE (Health, Safety and Environment) compliance while coached by Norwegian colleagues.
• In Tanzania, the Petroleum Policy Committee completed a draft Petroleum Policy Document.
• In Uganda, the Petroleum (Exploration, Development and Production) Bill and the Petroleum (Refining, Gas Processing and Conversion and Transportation) Bill were enacted into law. The Strategic Environmental Assessment (SEA) for the Albertine Graben was completed and will be submitted for a Cabinet hearing. Several recommendations from civil society were included in the report, following active engagement by WWF-Uganda and project partner civil society organisations (CSOs).

There were also several challenges. The OfD programme is engaged in a technically complex and politically contested sector, often in fragile and conflict-ridden states. Developing capacity under such circumstances is difficult and not without risk. For example, the outbreak of largescale violence and internal conflict in December 2013, put the entire South Sudanese statebuilding project to a test and jeopardized the progress and achievements of OfD’s efforts to date.

In Uganda, the OfD programme was put on hold for most of the year due to corruption in a non-related multilateral aid programme at the Prime Minister’s Office. Also in Mozambique, most of the programme activities were on hold due to investigations of financial discrepancy by the Central Control Unit in the Norwegian Ministry of Foreign Affairs.

In order to enhance contextual awareness and contribute to strategic planning, the OfD programme prioritized political economy analyses and risk assessments for several country programmes in 2013. In addition, considerable efforts were made to clarify and document mandates, responsibilities and guidelines in the management of the programme.