Abstract

This chapter presents new data and statistics on the economic importance of giant oil and gas discoveries. Giant discoveries are major economic events—they reveal previously unknown subsoil riches and preview a flow of investment and revenues to countries throughout the coming decades. For lower-income countries, they can exceed in net present value terms the entire annual GDP of the country. We discuss how countries have managed these opportunities—for some it has led to decades of sustained prosperity; for others it has failed to generate anticipated benefits, creating a dependence on resource revenues; and in some cases, it has exacerbated problems of economic mismanagement, corruption, and conflict. A new strand of social science literature is now interested in the effect of discoveries in isolation from the longer-term effects of a country becoming resource dependent. We review this work, concluding that the news of a giant discovery can significantly shift the economic and political trajectories of countries, for better and for worse.