# and additional policy changes.

# _Unrealized expectations_

The first impact is unrealized expectations. Given the complexity of the sector, public misunderstanding is common. This can lead to unrealistic expectations about the scale and timing of production and its benefits. Over-optimistic projections and statements by companies and International Financial Institutions (IFIs) are also likely to have caused and exacerbated inflated public expectations in many of the countries we analyzed. The role of government is less clear cut. In some cases, the government has attempted to temper those expectations and align them better with reality. In others, government and politicians have only inflated them further.

Earlier studies have documented this impact. Cust and Mensah (2020) find a jump in citizen expectations after oil finds in Africa, as measured by survey responses regarding their personal economic outlook using Afrobarometer public polling data. In Tanzania, a local research institute has been mapping citizen expectations around the gas sector. In 2015, only five years after the gamechanging offshore discovery in 2010 and still some years from FID, 53 percent of citizens surveyed believed production was already taking place.<sup>21</sup> The survey also highlighted over-optimistic expectations of how transformative gas production could be: 40 percent believed that they or a family relation would be employed in the sector, equivalent to more than 4 million jobs if extrapolated (Twaweza, 2015).

Despite Liberia’s very limited oil resources, its potential benefits have captured the imagination of citizens on multiple occasions, as discussed by Collier (2016). Confusion erupted in 2013 when African Petroleum reported a pre-drill estimate for its Bee Eater prospect (African Petroleum, 2013). But the 840 mbbl figure in estimated recoverable resources was mistakenly interpreted in the media, as if Liberia was starting to produce 840 barrels of oil a day (see, for example: All Africa, 2013). Another newspaper ran a headline “If last week’s announcement by African Petroleum that there’s a huge deposit of oil offshore Liberia is anything to go by, then there is no need for Liberians to live in abject poverty again.”<sup>22</sup> A third article stated that Exxon will be starting oil production in 2017 (Oguh, 2015), despite the Mesurado well that it drilled the year before being dry. After drilling, the well was announced as a discovery and it was some time before it was acknowledged to be noncommercial.

In several countries, the government has attempted to counteract some of this unrealistic excitement. After the confusion around exploration results in Liberia, the National Oil Company of Liberia (NOCAL) issued multiple public statements to try and clarify the situation (see, for example: NOCAL, 2012).

In Senegal, there have been only minor slippages in the production timeline. However, the government and the IMF have been cautious not to integrate the boom expected from petroleum into their projections. For example, a bond prospectus issued by the government in 2018 states: “Until a reputable international firm sets a date and production targets, production and earnings from oil and gas will not be integrated into Senegal’s macroeconomic framework. No assurance can be given as to when or whether the new oil and gas discoveries will be developed or the level of production they will represent” (Government of Senegal, 2018).<sup>23</sup>

> 21 A limited amount of gas was being produced from onshore projects at this time, which could have been partly the reason for this mistake.

> 22  The article ran in print by _Independent_ , January 21, 2013 (source: presentation by David Santley, World Bank, 2013).

> 23 Bond prospectus of the $1bn Eurobond issued by Senegal on 13 March 2018 due 2048.

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