"Govern a great nation as you would cook a small fish. Do not overdo it."Lao Tzu (6th Century BCE)
News reaches us that the tiny Gulf state of Kuwait has discovered a new oil and gas field in the west of the country, proximate to the Minagish oil field and on the border with Saudi Arabia. This new find will add to the monarchy’s current 101.5 gigabarrels of proven crude oil reserves and 1.78 trillion cubic metres of proven gas reserves.
In the same time frame as this new discovery comes the recently published Beyond Fossil Fuels: The Investment Case for Fossil Fuel Divestment. In this paper, global investors are urged to steer clear of stocks in the hydrocarbon sector as tighter international regulation on carbon dioxide emissions may force up to 80 per cent of reserves to remain buried and unexploited.
But what happens when a petrochemical company is inextricably linked to the prosperity of a nation? The petroleum industry in Kuwait, for example, accounts for almost half of the country’s GDP. In Saudi Arabia it is 55 per cent and in Qatar it’s 60.
And what of those nations that might be dragged into the 21st century by their untapped oil and gas wealth, countries like Mozambique and Angola where life expectancies are 53 and 51 years respectively and the average person will bring home little more than $600 per year? Will these nations remain as underdeveloped as their hydrocarbons?
A balance must be struck, but surely overdone fish is better than no fish at all?
