How upstream petroleum industry affects economic growth and development in petroleum producing-countries: Evidence from Ghana

Hermas Abudu, Xiangyu Cai and Boqiang Lin ()

Energy, 2022, vol. 260, issue C

Abstract: Upstream petroleum externality determinations may provide policymakers with appropriate natural resource management options and significantly contribute to sustainable development in petroleum-producing countries. This study investigates the above topic with novelty in contributing new knowledge and updating the existing literature gap in the upstream petroleum industry, using qualitative and quantitative techniques. The authors innovatively designed a microeconomic model together with expert judgement technique after obtaining and coding the primary data to investigate the externalities prevalent in petroleum-producing communities in Ghana. The analysis shows that the upstream petroleum industry negatively impacts fishers' and fishmongers' livelihoods. Also, farmers' crop yields are damaged, and some have not received any compensation from the petroleum companies. The results further showcase that oil and natural gas operations have adversely impacted the coastal dweller's economic, social and environment, particularly through damaging public and sacred lands and marine ecosystem. Nevertheless, the industry also contributes positively to the socio-economic benefits regarding social amenities, infrastructure and development. Presently, the social benefits provided by the upstream petroleum companies as a source of corporate social responsibilities fall below the host communities' prior expectations toward development. The implication is that petroleum hosting communities usually have conditional expectations on community development in accepting petroleum production companies. In conclusion, the finding suggests that the current exposure to negative externalities in the host communities are greater than the overall positive externalities. This analysis provides relevant firsthand information for future upstream exploration & development in Ghana. Consequently, the authors have offered intuitive policy recommendations in this paper.

Keywords: Upstream petroleum externality; Socio-economic impact assessment; Deadweight loss; Sustainable livelihood framework; Environmental externality (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:eee:energy:v:260:y:2022:i:c:s0360544222020333

DOI: 10.1016/j.energy.2022.125139

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