Just model it! How PWYP members can develop a presentation of any oil project in 30 minutes

By Johnny West on February 23, 2022

How much money will Chad see from its oil production and when? How sensitive is that to the wild fluctuations of market prices? And how does the money the government gets compare to what the oil companies get? These are some of the questions PWYP member GRAMPTC and the Berlin-based publisher OpenOil will address in an innovative workshop next week to launch financial modeling of extractives projects for civil society.

Up to 30 participants will learn how to use a model developed by OpenOil of Glencore’s project in the Badila and Mangara fields. Any and all statements about how much money the project can earn Chad can be tested using the model, providing civil society for the first time with an easy-access tool which is completely editorially independent.

The workshop will also be a key place to refine the methodologies used in the model (which has been developed using standard oil industry techniques), to ensure that they meet local need: is there, for instance, a need to break out a separate calculation for the 5% of funds owed to the communities in the Doba Basin where the fields are located? Do Chadian activists need more investor metrics, to be ready if there are company claims that falling oil prices mean the contracts must now be sweetened?

But above all, the participants will provide invaluable help to “beat the model up” – to ensure it does what it is supposed to: allow the presentation of the major financial flows and features of a project in just 30 minutes to non-industry specialists. The last session of the workshop will involve participants presenting the model to each other.

The Glencore contract is just one of four in Chad discovered by OpenOil and their partners PWYP Canada late last year by “text mining” corporate disclosures. That search tripled the number of oil contracts collected in one place for easy access to over 500 contracts. A third edition of the repository is due out in the coming weeks which will add another 200, providing the raw material for the global transparency community to take on the next stage: developing open financial models to make sense of it all.

All contracts are available at a click on the website. For those with low Internet bandwidth, a free USB stick is available and has already been delivered to 24 countries, including India, Mozambique, Uganda, Nigeria, Mexico, Russia, Indonesia, Libya, Tunisia and Kenya. There have been over 150,000 contract-downloads in the three months since the repository was launched.

There has been keen interest from PWYP members in several countries and any member is encouraged to ask about modeling possibilities for projects of special interest to them, such as the “Fair Deal” question, or the “Decision to Extract” in PWYP’s Chain for Change.