Objective
The Oil for Development (OfD) initiative aims at assisting developing countries with hydrocarbon potential in their efforts to benefit from petroleum resources in a way that generates economic growth and welfare to the population in general, and is environmentally sustainable.
Background
Petroleum plays and will play an important role in a number of developing countries. Oil and gas holds promise of becoming a vital resource for economic and social development. It has, however, in many cases proved difficult to translate petroleum resources into improved welfare for the inhabitants. The combination of large and sudden inflows of revenues and lack of relevant institutions and governance systems increases the risk of corruption, rent-seeking, conflict, dependence and crowding out of industries. As a result, many developing countries score conspicuously low on the current generation of international development performance indexes.
The Oil for Development initiative
The Norwegian Oil for Development initiative aims at assisting countries with hydrocarbon potential in their efforts to overcome these challenges. Several decades of oil and gas experience have given Norway broad competence across the full cycle of petroleum sector management. National control, strong institutions and well educated public servants have been important features of this process, but also the involvement of the international oil and gas industry has been fundamental. Drawing on this experience, Norway has already provided assistance to the oil sector in developing countries since the early 1980s. As of 2006, Norway cooperates with more than 15 countries, covering areas such as legal frameworks, administration and supervision mechanisms, licensing and tendering processes, organisation of public/private interfaces of petroleum governance, local content and industrial development, environmental challenges and revenue management issues, including taxation and petroleum funds.
The steady increase in demand for Norwegian assistance on petroleum sector management, along with growing global focus on these issues, inspired the launching of the Oil for Development initiative in September 2005. Working with other donors to address the challenges of petroleum administration and management more forcefully, the initiative enhances the focus on good governance, transparency and anti-corruption as well as environmental challenges.
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