Oil in Egypt, Oman, and Syria: Some Macroeconomic Implications
Like many other industries in developing countries, oil and gas (O&G) have regularly used a mixture of domestic and external finance. The financial challenges faced by the sector have rarely been about closing financing gaps because of two inherent characteristics. Firstly, O&G have been an enabling factor for developing countries wishing to access international capital markets, partly because of the industry’s strategic importance, and partly because of the implicit guarantee of income from sales. Indeed, like other extractive industries, O&G have attracted foreign investments even where and when other sectors in the host economies failed to do so. Secondly, particularly in the upstream, international oil companies (IOCs) have provided much of the capital costs required, either through in-house finance, or indirectly via their ability to access international capital markets. International private capital tends to play a more prominent and direct role in the natural gas chain, especially in export projects.