Person:
Tordo, Silvana
Author Name Variants
Fields of Specialization
Petroleum sector,
Sovereign wealth funds,
Strategic investment funds,
Climate change adaptation finance
Degrees
ORCID
Departments
Energy and Extractives Global Practice
Externally Hosted Work
Contact Information
Last updated
January 31, 2023
Biography
Silvana Tordo is a Lead Energy Economist at the World Bank’s Energy and Extractives Global Practice where she co-leads the Extractives-led Local Economic Development (ELLED) program. Silvana’s publications cover a wide range of topics, including value creation by national oil companies, allocation of petroleum rights, oil and gas taxation, strategic investment funds, industrial policy, and climate-smart policies.
Publication Search Results
1 - 10 of 20
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Publication
Local Content in the Oil and Gas Sector
(Washington, DC: World Bank, 2013-07)A number of countries have recently discovered and are developing oil and gas reserves. Policy makers in such countries are anxious to obtain the greatest benefits for their economies from the extraction of these exhaustible resources by designing appropriate policies to achieve desired goals. One important theme of such policies is the so-called local content created by the sector- the extent to which the output of the extractive industry sector generates further benefits to the economy beyond the direct contribution of its value-added, through its links to other sectors. Local Content Policies (LCPs) were first introduced in the North sea in the early 1970s and ranged from restrictions on imports to direct state intervention in the oil sector. While LCPs have the potential to stimulate broad-based economic development, which is necessary to alleviate poverty and achieve the United Nation's Millennium Development Goals (MDGs), their application in petroleum-rich countries has achieved mixed results. This paper serves to introduce the topic by describing policies and practices meant to foster the development of economic links from the petroleum sector, as adopted by a number of petroleum-producing countries both in and outside the Organization for Economic Co-operation and Development (OECD). The paper is organized as follows: chapter one defines local content and briefly illustrates the links between the petroleum sector and other economic sectors (where policies may be able to increase the economic benefits of the petroleum sector). An attempt is made to measure local content levels in a wide sample of petroleum-producing countries including net importers and net exporters, and countries at different stages of economic development to put LCPs in context and to consider if the structure of an economy is a key driver of local content levels. Chapter two discusses the arguments that have been used in favor and against the use of productive development policies in general and LCPs in particular. Chapter three provides an outline of the tools and types of LCPs that have been used by petroleum producing countries, and present their strengths and weaknesses. Chapter four focuses on issues related to the measurement and monitoring of LCPs, and discusses the limitations of alternative metrics. Chapter five provides a description of LCP objectives, implementation tools, and reporting metrics used in a selected sample of oil-producing countries including Angola, Brazil, Kazakhstan, Indonesia, Malaysia, and Trinidad and Tobago and draw initial lessons that may be relevant to other countries. -
Publication
Natural Oil Companies and Value Creation : Volume 2. Case Studies
(World Bank, Washington, DC, 2011-03)Approximately two billion dollars a day of petroleum are traded worldwide, which makes petroleum the largest single item in the balance of payments and exchanges between nations. Petroleum represents the larger share in total energy use for most net exporters and net importers. While petroleum taxes are a major source of income for more than 90 countries in the world, poor countries net importers are more vulnerable to price increases than most industrialized economies. This paper has five chapters. Chapter one describes the key features of upstream, midstream, and downstream petroleum operations and how these may impact value creation and policy options. Chapter two draws on ample literature and discusses how changes in the geopolitical and global economic environment and in the host governments' political and economic priorities have affected the rationale for and behavior of National Oil Companies' (NOCs). Rather than providing an in-depth analysis of the philosophical reasons for creating aNOC, this chapter seeks to highlight the special nature of NOCs and how it may affect their existence, objectives, regulation, and behavior. Chapter three proposes a value creation index to measure the contribution of NOCs to social value creation. A conceptual model is also proposed to identify the factors that affect value creation. Chapter four presents the result of an exploratory statistical analysis aimed to determine the relative importance of the drivers of value creation. In addition, the experience of a selected sample of NOCs is analyzed in detail, and lessons of general applicability are derived. Finally, Chapter five summarizes the conclusions. -
Publication
Natural Oil Companies and Value Creation : Volume 3. Data Set
(World Bank, Washington, DC, 2011-03-01)Approximately two billion dollars a day of petroleum are traded worldwide, which makes petroleum the largest single item in the balance of payments and exchanges between nations. Petroleum represents the larger share in total energy use for most net exporters and net importers. While petroleum taxes are a major source of income for more than 90 countries in the world, poor countries net importers are more vulnerable to price increases than most industrialized economies. This paper has five chapters. Chapter one describes the key features of upstream, midstream, and downstream petroleum operations and how these may impact value creation and policy options. Chapter two draws on ample literature and discusses how changes in the geopolitical and global economic environment and in the host governments' political and economic priorities have affected the rationale for and behavior of National Oil Companies' (NOCs). Rather than providing an in-depth analysis of the philosophical reasons for creating aNOC, this chapter seeks to highlight the special nature of NOCs and how it may affect their existence, objectives, regulation, and behavior. Chapter three proposes a value creation index to measure the contribution of NOCs to social value creation. A conceptual model is also proposed to identify the factors that affect value creation. Chapter four presents the result of an exploratory statistical analysis aimed to determine the relative importance of the drivers of value creation. In addition, the experience of a selected sample of NOCs is analyzed in detail, and lessons of general applicability are derived. Finally, Chapter five summarizes the conclusions. -
Publication
Sovereign Wealth Funds and Long-Term Development Finance : Risks and Opportunities
(World Bank, Washington, DC, 2014-02)Sovereign wealth funds represent a large and growing pool of savings. An increasing number of these funds are owned by natural resource exporting countries and have a variety of objectives, including intergenerational equity and macroeconomic stabilization. Traditionally, these funds have invested in external assets, especially securities traded in major markets. But the persistent infrastructure financing gap in developing countries has motivated some governments to encourage their sovereign wealth funds to invest domestically. This paper proposes some basic elements of a conceptual framework to create a system of checks and balances to help ensure that the sovereign wealth funds do not undermine macroeconomic management or become a vehicle for politically driven "investments." First, the risks and opportunities of domestic investment by sovereign wealth funds are analyzed. Central issues are the relationship of sovereign wealth fund financing to the budget process and to the procurement systems of sector ministries, as well as the establishment of appropriate benchmarks and safeguards to ensure the integrity of investment decisions. The paper argues that a well-governed sovereign wealth fund, with a sound mandate and professional management and staffing, can possibly improve the quality of the public investment program. But its mandate should not duplicate that of other government institutions with investment mandates, such as the budget, the national development bank, the investment authority, and state-owned enterprises. Establishing rules on the type of investment (for example, commercial and/or quasi-commercial) and its modalities (for example, no controlling stakes, leveraging private investment) is one way to ensure separation between the activities of the sovereign wealth fund and those of other institutions. The critical issue remains that of limiting the sovereign wealth fund's investment scope to that appropriate for a wealth fund. If investments that generate quasi-market returns are permitted, the size of the home bias should be clearly stipulated and these investments should be reported separately. -
Publication
Crude Oil Price Differentials and Differences in Oil Qualities : A Statistical Analysis
(World Bank, Washington, DC, 2005-10)This report updates and extends previous work by a statistical analysis of the relationship between crude price differentials and three quality differentials, as well as transport costs and seasonal effects. In addition to the API (American Petroleum Institute) gravity number and the sulfur content of the crudes, which are the qualities generally included in existing analysis, the report presents the impact of acidity (measured by the Total Acid Number - TAN) on the price differential. This is because acidity has become increasingly important as the volume of high acid crudes, particularly from West Africa, has steadily increased in recent years. -
Publication
Experiences with Oil Funds : Institutional and Financial Aspects
(World Bank, Washington, DC, 2006-06)This study brings together detailed information on the creation, operation, and financial performance of 12 oil funds and 3 other resource funds. The report looks at various funds in Alaska, Alberta, Azerbaijan, Norway, Chad, Sao Tome Principe, Timor, Chile, Nauru, Papua New Guinea, Kazakhstan, Kuwait, Oman, Venezuela, and Russia. The purpose of the study is to provide comparative information on the backgrounds of the creation of these funds, the legislation used to do so, the details of the organization and management of the funds, and of their financial performance. The report opens with a brief review of the reasons for establishing an oil fund and the principal issues involved. The report then provides detailed coverage of four oil funds where there is substantial public information about the operation and performance of the funds. The final chapter provides some comparative material on the different funds and explores the construction of a set of indicators for good practice in the design of the funds. The appendixes contain the legislation which created the governing funds. -
Publication
Crude Oil Prices : Predicting Price Differentials Based on Quality
(World Bank, Washington, DC, 2004-10)Many developing countries are becoming oil exporters, producing crude oils that often differ markedly in quality from those principally traded. Governments must predict the prices of such crudes, to forecast revenue and evaluate the fairness of the price they receive from companies selling on their behalf. Oil companies, and industry consultants, have models for analyzing price differentials with well-known "marker" crudes, but these models have not been widely known, or adapted to account for increasingly important quality characteristics, such as acidity. This note explains a methodology for price analysis, and a new extension for incorporating acidity, which can have a big effect on the price differential. -
Publication
Managing Resource Rents : The Special Challenges in Postconflict Countries
(World Bank, Washington, DC, 2006-02)Resource flows from extractive industries can be a lifeline for postconflict countries, helping to fund critical reconstruction needs. But these resources present issues not found elsewhere in the economy and need to be well managed. Sector governance principles that apply to oil-producing countries in general are even more important in postconflict countries. This note discusses these principles and shows how they apply in two cases, Timor-Leste and Sudan. -
Publication
Petroleum Exploration and Production Rights : Allocation Strategies and Design Issues
(World Bank, 2009-11-01)Petroleum has become an integral part of today's global economy and a key component of many national economies. Hence, the presence of petroleum in meaningful quantities can have important economic, developmental, and strategic consequences for a country. While a country's petroleum resource base is a gift of nature, translating this resource into saleable crude oil requires investment and effort. Whether governments choose to invest directly or allow private investors to do so, their primary concern should be to maximize the social benefits derived from the exploitation of the resource base. In practice, however, defining what constitutes maximum social welfare is essentially a political question, which helps explain the variety of objectives pursued by governments over time. In order to exploit their natural resources efficiently, many governments rely on private oil companies. Governments have a challenging task in deciding which companies should be awarded the exclusive rights to explore, develop, and produce their resources, and on what conditions such rights should be awarded. There is little empirical documentation on the design and relative effectiveness of alternative systems for the allocation of petroleum exploration, development, and production (E&P) rights and their policy implications. This paper analyzes the available evidence on the advantages and disadvantages of various practices used by petroleum producing countries to allocate petroleum E&P rights, and draws conclusions about the optimal design of E&P allocation systems. -
Publication
Fiscal Systems for Hydrocarbons : Design Issues
(Washington, DC: World Bank, 2007)Although host governments and the investors may share one common objective-the desire for the project to generate high levels of revenue-their other goals are not entirely aligned. Host governments aim to maximize the rent for their country over time, while achieving other development and socioeconomic objectives. Investors' aim is to ensure that the return on investment is consistent with the risk associated with the project, and with their corporations' strategic objectives. To reconcile these often conflicting objectives, more and more countries rely on transparent institutional arrangements and flexible, neutral fiscal regimes. This paper examines the key elements of the legal and fiscal frameworks utilized in the petroleum sector and aims to outline desirable features that should be considered in the design of fiscal policy with the objective of optimizing the host government's benefits, taking into account the effect that this would have on the private sector's investment. Chapters 2 and 3 provide background material on, respectively, the stages of an oil and gas project and the type of legal arrangements normally used in the petroleum sector. The relative advantages and disadvantages of the tax and non-tax instruments used in petroleum fiscal regimes are discussed in Chapter 4. Chapter 5 outlines the features of successful fiscal regimes, while system measures and economic indicators are described in Chapter 6. Finally, in Chapter 7, a sensitivity analysis is used to illustrate some typical fiscal systems' design issues.