The Second South-South High-Level Meeting on Oil & Gas Management was held in Nairobi, Kenya during the period 12 to 15 October 2009 with the main objective of sharing experiences among the petroleum – exporting countries in the south. In addition to Energy and Petroleum Ministers of Kenya, Liberia, Angola and Son ram delegations from 60 countries in Africa, Asia, Latin America and the Caribbean regions representing the oil and gas sector, concerned ministers, in addition to representatives from international energy agencies attended the conference. Over the course of four days of presentations, participants discussed a number of topics as presented in Nairobi Statement.

Over the course of four days of presentations and deliberations, participants discussed a number of topics that were of relevance to oil and gas management. These included:

• Managing and meeting expectations among national governments, international oil companies, and local citizens
• Options and models of petroleum funds (sovereign wealth funds)
• Fiscal policy in oil revenue management
• Financial implications of oil and gas contracts
• Expanding "local content" in the development of the hydrocarbon sector
• Issues in the utilization of Joint Development Zones for shared resources
• Corporate social responsibility
• Environmental management best practices
• Carbon Markets and trading in the context of oil and gas producing states
• Capacity-building issues and challenges for the newly emerging oil and gas producers
  

In the course of the four days of discussion, there was widespread agreement on several issues, including:

• The extreme price fluctuations in world petroleum markets and the current global financial crisis have had a severe impact on existing oil producers and slowed down the pace of exploration and development for most of the newly emerging oil producers.
• These economic impacts have only heightened the challenge for both existing and new petroleum exporting countries is to ensure that oil revenues are used to improve the lives of their citizens and to achieve sustainable socio-economic development.
• Participants reiterated the importance of ensuring that the oil sector is not managed in isolation from the wider economy, and that long-term success can only be achieved when both the oil and other sectors are managed well.
• There is still an ongoing need ford newly emerging oil producer governments to be better equipped to negotiate contracts with international oil companies and better understand the financial and revenues implications for different contractual approaches or components.
• The use of petroleum or sovereign wealth funds represents an important, but not sufficient, mechanism for ensuring support sound macroeconomic management and provide for the effective long-term utilization and allocation of oil revenues.
• Accelerating the pace of local content continues to be a priority for existing and newly emerging oil producers. Local content policies must encourage knowledge transfers and human capital formation in the context of promoting the growth of local companies and service providers.
• The newly emerging hydrocarbon governments need to take a much more proactive approach to corporate social responsibility and environmental management by setting and expecting their foreign partners to using the highest internationally accepted standards.
• Oil producing states have both a special obligation and unique opportunity to address climate change and utilize carbon markets to achieve wider development goals and help their citizens mitigate the impacts of climate change at the community level.
  

The participants expressed their appreciation for the opportunity to share their experiences on a wide range of topics that would facilitate more effective management of the oil and gas sector. They further indicated their support for the new oil and gas capacity building project that would create additional opportunities and new mechanisms for the ongoing exchange of experience. In this regard, the participants further endorsed the following recommendations for more in-depth review and analysis:

• Support to help new oil producers fully understand the financial implications of various contractual components, including allocation of acreage (licensing rounds), renegotiations, arbitration/litigation, and enhanced oil recovery
• Research and policy guidelines on approaches to addressing the local content challenge in a cost-effective and equitable manner.
• Compendium of best practices on managing expectations among national governments, international oil company partners and local populations.
• Establishment of a set of carbon principles for oil and gas companies that are consistent among the regions and include explicit guidance on due diligence for climate change-related impacts of (projects and their mitigation by oil and gas companies.
• Articulation and promotion of social and environmental best practices to guide negotiations and expectations with international oil companies, such as found in the Equator Principles now used by financial institutions.
• Participating countries in Nairobi should reconvene within one year to report on progress achieved through South-South exchange of experience and the capacity-building project for the identification of new priorities that may arise.
  

At the close of their deliberations, participants unanimously expressed their gratitude to the Government of Kenya for hosting the meeting, and to the people of Kenya for their warm hospitality, as well as the quality of services and facilities for the meeting.