Socio-economic impacts of strategic oil and gas megaprojects: A case study in Kuwait

Mustapha Nourelfath, Haitham M.S. Lababidi and Tariq Aldowaisan

International Journal of Production Economics, 2022, vol. 246, issue C

Abstract: The upgrade of existing refining facilities has great importance to produce high-quality petroleum products that meet the future diversified market requirements. In the existing literature, many papers have dealt with impact analysis of projects. However, studies assessing local, regional and national impacts of oil and gas megaproejcts are missing. In this study, a systematic Input-Output methodology is developed to set out the socio-economic contribution of oil and gas megaprojects. This methodology shows how clean energy megaprojects can contribute to Gross Domestic Product and employment. The central concept of the Input-Output analysis is to link the output value of one industry to the products and services it buys as inputs from other industries. These links are interpreted as relationships resulting in Input-Output tables. Using different multipliers, the Input-Output model is used to calculate the economy's overall effects of megaprojects. As a case study, we analyze the impacts of two megaprojects, the Clean Fuels Project and the Al-Zour Refinery Project, on the economy and the society of the State of Kuwait. The proposed methodology estimates the direct impact carried out by companies that are part of the oil and gas sector, the indirect impact of other Kuwait-based businesses in the supply chain, and the induced impact resulting from household spending of labor income. The obtained results indicate significant positive impacts on Gross Domestic Product and employment during the operation and the construction phases.

Keywords: Input-output analysis; Socio-economic impact; Oil and gas; Mega project; Clean energy (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:proeco:v:246:y:2022:i:c:s0925527322000093

DOI: 10.1016/j.ijpe.2022.108416

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