IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/103725.html
   My bibliography  Save this paper

The Long Road to First Oil

Author

Listed:
  • Mihalyi, David

Abstract

This paper analyzes the factors affecting the speed at which newly discovered oil and gas fields are developed. Using data from over 25,000 oil and gas assets globally I demonstrate that both asset and country characteristics are critical in determining which assets reach production stage. I analyze the effects of countries adopting a set of market oriented reforms, to shed light on the impacts of institutional changes on petroleum extraction timeline. Mitigating climate change will require a large share of the world's already discovered fossil resources to stay underground. The results of this study can help inform how petroleum producers may respond to the energy transition underway. My findings also calls into question the assumption used in earlier research that giant oil and gas discoveries can be considered exogenous in their impacts on subsequent production.

Suggested Citation

  • Mihalyi, David, 2020. "The Long Road to First Oil," MPRA Paper 103725, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:103725
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/103725/1/MPRA_paper_103725.pdf
    File Function: original version
    Download Restriction: no
    File URL: https://mpra.ub.uni-muenchen.de/103855/1/MPRA_paper_103725.pdf
    File Function: revised version
    Download Restriction: no
    File URL: https://mpra.ub.uni-muenchen.de/103855/8/MPRA_paper_103855.pdf
    File Function: revised version
    Download Restriction: no
    File URL: https://mpra.ub.uni-muenchen.de/106745/1/MPRA_paper_106745.pdf
    File Function: revised version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Brunnschweiler, Christa N. & Bulte, Erwin H., 2008. "The resource curse revisited and revised: A tale of paradoxes and red herrings," Journal of Environmental Economics and Management, Elsevier, vol. 55(3), pages 248-264, May.
    2. repec:oup:qjecon:v:132:y:2016:i:1:p:103-155. is not listed on IDEAS
    3. Lei, Yu-Hsiang & Michaels, Guy, 2014. "Do giant oilfield discoveries fuel internal armed conflicts?," Journal of Development Economics, Elsevier, vol. 110(C), pages 139-157.
    4. Rick Van der Ploeg & Fidel Perez-Sebastian & Ohad Raveh, 2019. "Oil Discoveries and Protectionism," Economics Series Working Papers 895, University of Oxford, Department of Economics.
    5. Torfinn Harding & Radoslaw Stefans & Gerhard Toews, 2020. "Boom Goes the Price: Giant Resource Discoveries and Real Exchange Rate Appreciation," The Economic Journal, Royal Economic Society, vol. 130(630), pages 1715-1728.
    6. Halvor Mehlum & Karl Moene & Ragnar Torvik, 2006. "Institutions and the Resource Curse," Economic Journal, Royal Economic Society, vol. 116(508), pages 1-20, January.
    7. Torfinn Harding & Radoslaw Stefanski, 2016. "Boom goes the price: Giant resource discoveries and real," OxCarre Working Papers 174, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford.
    8. Jeffrey D. Sachs & Andrew M. Warner, 1995. "Natural Resource Abundance and Economic Growth," NBER Working Papers 5398, National Bureau of Economic Research, Inc.
    9. Alberto Abadie & Susan Athey & Guido W Imbens & Jeffrey M Wooldridge, 2023. "When Should You Adjust Standard Errors for Clustering?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 138(1), pages 1-35.
    10. Halvor Mehlum & Karl Moene & Ragnar Torvik, 2006. "Cursed by Resources or Institutions?," The World Economy, Wiley Blackwell, vol. 29(8), pages 1117-1131, August.
    11. Mr. Giovanni Melina & Yi Xiong, 2013. "Natural Gas, Public Investment and Debt Sustainability in Mozambique," IMF Working Papers 2013/261, International Monetary Fund.
    12. Torfinn Harding & Radoslaw Stefans & Gerhard Toews, 2020. "Boom Goes the Price: Giant Resource Discoveries and Real Exchange Rate Appreciation," Economic Journal, Royal Economic Society, vol. 130(630), pages 1715-1728.
    13. Robinson, James A. & Torvik, Ragnar & Verdier, Thierry, 2006. "Political foundations of the resource curse," Journal of Development Economics, Elsevier, vol. 79(2), pages 447-468, April.
    14. Francisco J. Buera & Alexander Monge‐Naranjo & Giorgio E. Primiceri, 2011. "Learning the Wealth of Nations," Econometrica, Econometric Society, vol. 79(1), pages 1-45, January.
    15. Shaukat Khan,Tehmina & Nguyen,Trang Thi Thuy & Ohnsorge,Franziska Lieselotte & Schodde,Richard, 2016. "From commodity discovery to production," Policy Research Working Paper Series 7823, The World Bank.
    16. Romain Wacziarg & Karen Horn Welch, 2008. "Trade Liberalization and Growth: New Evidence," The World Bank Economic Review, World Bank, vol. 22(2), pages 187-231, June.
    17. Frederick van der Ploeg, 2011. "Natural Resources: Curse or Blessing?," Journal of Economic Literature, American Economic Association, vol. 49(2), pages 366-420, June.
    18. Kornai, Janos, 1992. "The Socialist System: The Political Economy of Communism," OUP Catalogue, Oxford University Press, number 9780198287766.
    19. Cust,James Frederick & Mihalyi,David, 2017. "Evidence for a presource curse ? oil discoveries, elevated expectations, and growth disappointments," Policy Research Working Paper Series 8140, The World Bank.
    20. Abdelwahed, Loujaina, 2020. "More oil, more or less taxes? New evidence on the impact of resource revenue on domestic tax revenue," Resources Policy, Elsevier, vol. 68(C).
    21. Arezki, Rabah & van der Ploeg, Frederick & Toscani, Frederik, 2019. "The shifting natural wealth of nations: The role of market orientation," Journal of Development Economics, Elsevier, vol. 138(C), pages 228-245.
    22. J.-F. Mercure & H. Pollitt & J. E. Viñuales & N. R. Edwards & P. B. Holden & U. Chewpreecha & P. Salas & I. Sognnaes & A. Lam & F. Knobloch, 2018. "Macroeconomic impact of stranded fossil fuel assets," Nature Climate Change, Nature, vol. 8(7), pages 588-593, July.
    23. Christophe McGlade & Paul Ekins, 2015. "The geographical distribution of fossil fuels unused when limiting global warming to 2 °C," Nature, Nature, vol. 517(7533), pages 187-190, January.
    24. Pierre-Louis Vezina, 2016. "Resource discoveries and FDI bonanzas," OxCarre Working Papers 177, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford.
    25. Smith, Brock, 2015. "The resource curse exorcised: Evidence from a panel of countries," Journal of Development Economics, Elsevier, vol. 116(C), pages 57-73.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Paul Fenton Villar, 2022. "Is there a Mineral-Induced ‘Economic Euphoria’?: Evidence from Latin America," Journal of Happiness Studies, Springer, vol. 23(4), pages 1403-1430, April.
    2. Katovich, Erik S., 2024. "Winning and losing the resource lottery: Governance after uncertain oil discoveries," Journal of Development Economics, Elsevier, vol. 166(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Brunnschweiler, Christa N. & Poelhekke, Steven, 2021. "Pushing one’s luck: Petroleum ownership and discoveries," Journal of Environmental Economics and Management, Elsevier, vol. 109(C).
    2. Perez-Sebastian, Fidel & Raveh, Ohad & van der Ploeg, Frederick, 2021. "Oil discoveries and protectionism: Role of news effects," Journal of Environmental Economics and Management, Elsevier, vol. 107(C).
    3. Cust,James Frederick & Mihalyi,David, 2017. "Evidence for a presource curse ? oil discoveries, elevated expectations, and growth disappointments," Policy Research Working Paper Series 8140, The World Bank.
    4. Adrien Desroziers & Yassine Kirat & Arsham Reisinezhad, 2023. "Carbon curse: As you extract, so you will burn," Working Papers 2023.09, FAERE - French Association of Environmental and Resource Economists.
    5. Traviss Cassidy, 2019. "The Long-Run Effects of Oil Wealth on Development: Evidence from Petroleum Geology," The Economic Journal, Royal Economic Society, vol. 129(623), pages 2745-2778.
    6. Regina Stéphanie Seri, 2021. "How giant discoveries of natural resources impact sovereign debt ratings in developing and emerging countries ?," Working Papers hal-03144330, HAL.
    7. Regina Stéphanie Seri, 2021. "How giant discoveries of natural resources impact sovereign debt ratings in developing and emerging countries ?," CERDI Working papers hal-03144330, HAL.
    8. Edouard Mien & Michaël Goujon, 2022. "40 Years of Dutch Disease Literature: Lessons for Developing Countries," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 64(3), pages 351-383, September.
    9. James Cust & Torfinn Harding & Pierre-Louis Vézina, 2019. "Dutch Disease Resistance: Evidence from Indonesian Firms," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 6(6), pages 1205-1237.
    10. Zuo, Na & Zhong, Hua, 2020. "Can resource policy reverse the resource curse? Evidence from China," Resources Policy, Elsevier, vol. 68(C).
    11. Christopher Hartwell & Roman Horvath & Eva Horvathova & Olga Popova, 2022. "Natural resources and income inequality in developed countries: synthetic control method evidence," Empirical Economics, Springer, vol. 62(2), pages 297-338, February.
    12. Arsham Reisinezhad, 2024. "The Dutch disease revisited: consistency of theory and evidence," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 87(3), pages 553-603, March.
    13. Chiroleu-Assouline, Mireille & Fodha, Mouez & Kirat, Yassine, 2020. "Carbon curse in developed countries," Energy Economics, Elsevier, vol. 90(C).
    14. Nouf Alsharif & Sambit Bhattacharyya, 2024. "Oil discovery, boom‐bust cycle and manufacturing slowdown: Evidence from a large industry level dataset," Review of Development Economics, Wiley Blackwell, vol. 28(2), pages 406-431, May.
    15. Hasanov, Fakhri J. & Aliyev, Ruslan & Taskin, Dilvin & Suleymanov, Elchin, 2023. "Oil rents and non-oil economic growth in CIS oil exporters. The role of financial development," Resources Policy, Elsevier, vol. 82(C).
    16. Alssadek, Marwan & Benhin, James, 2023. "Natural resource curse: A literature survey and comparative assessment of regional groupings of oil-rich countries," Resources Policy, Elsevier, vol. 84(C).
    17. Cheng, Zhonghua & Li, Lianshui & Liu, Jun, 2020. "Natural resource abundance, resource industry dependence and economic green growth in China," Resources Policy, Elsevier, vol. 68(C).
    18. Konte, Maty & Vincent, Rose Camille, 2021. "Mining and quality of public services: The role of local governance and decentralization," World Development, Elsevier, vol. 140(C).
    19. Smith, Brock, 2015. "The resource curse exorcised: Evidence from a panel of countries," Journal of Development Economics, Elsevier, vol. 116(C), pages 57-73.
    20. Arezki, Rabah & van der Ploeg, Frederick & Toscani, Frederik, 2019. "The shifting natural wealth of nations: The role of market orientation," Journal of Development Economics, Elsevier, vol. 138(C), pages 228-245.

    More about this item

    Keywords

    resource curse; natural resources; oil discovery; institutions; liberalization;
    All these keywords.

    JEL classification:

    • P50 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems - - - General
    • Q33 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Resource Booms (Dutch Disease)
    • Q35 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Hydrocarbon Resources

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:103725. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.