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sharing in governance of extractive industries

What has Philosopher Theodore Zeldin got to do with public interest financial modeling in the extractives sector?

Twenty years before I got into the world of extractive industries governance I studied Economics at university (Edinburgh, UK).  Albeit not for very long: my Masters was in Politics, Philosophy and Economics (PPE) and I decided to major in Politics, so that amounted to four years of study, rather than the other ‘P’ or the ‘E’, which only got two years of study (all concurrently).  And, yes, I am that old. 

I mention this both in the context of the economic modeling of petroleum and mining projects, as pioneered by OpenOil (a leading and global consultancy for this particular niche), and one of the philosophers (the “other ‘P’” referred to above) I read during my four, wonderfully enjoyable, Edinburgh years.  The philosopher in question is the wonderfully named Theodore Zeldin a former dean of St Anthony's College, Oxford University (UK); here is an equally wonderful photo of him – plus more biographical information on the gentleman. 

Zeldin, regrettably not yet a GOXIan but I could invite him to join, wrote (page 53, 2007, cost: £0.28p+):

“Work increasingly consists of talk..  But the more we talk, there less there is we can talk about with confidence..  We have nearly all of us become experts, sepcialised in one activity..” 

I want to tell you about an opportunity for other GOXIans to jump in the deep end of something that may (or may not) be new to them, to learn to talk about this new (if it is so) topic with confidence too, alongside whatever legal, geological, engineering, management or leadership etc. topics you can already talk about with confidence.  To reverse the above equation, such that, collectively, “the more we talk, the more we can talk about with confidence”; the opportunity in question goes by the name of the public interest financial modeling paradigm (catchy, no?) developed by OpenOil, see above.  But first, more Zeldin (ibid., p.53):

 “An economist openly admits that ‘Learning to be an economist is like learning a foreign language, in which you talk about a rational world which exists only in theory’”.

Well, whilst there is more to economics than just “talk”, I can attest that there is plenty of that too, and that sometimes the talking seemed to me to be in Ancient Hunnic, or something.  Of course, there are also numbers.  And equations.  And statistical tests.. in fact, plenty of all these things too.  And such things are also well represented in the modeling paradigm in question, as is talk, in the form of clear communication about what the models are telling us, their assumptions and particular sociopolitical contexts, their sources and their results.

What we want to do (I am very pleased to be assisting OpenOil on this project) is to open up a conversation about our public interest financial modeling paradigm.  We are not talking a lecture series, but a genuine set of online conversations taking place through Google Hangouts and supported by documentation.  It is entirely free to join, but places will be strictly limited.

Zeldin also said (link to http://www.gurteen.com/gurteen/gurteen.nsf/id/when-minds-meet) “Conversation is a meeting of minds with different memories and habits,  When minds meet, they don't just exchange facts: they transform them, reshape them, draw different implications from them, and engage in new trains of thought. Conversation doesn't just reshuffle the cards: it creates new cards’.  It is that philosophy that we want to take forward through the Google Hangouts.

It’s probably time for some specifics.  Here goes: beginning on Friday November 13th (why not?), there will be five weekly Google Hangouts which walk through models of a mining and an oil project, adapted for training purposes to teach the basics of project economics, supply and demand curves, investor metrics such as Net Present Value and Internal Rate of Return and discount rates. Each 90-minute session will build on the last and work against presentation materials and exercises provided online. Participants are encouraged to devote 2-3 hours a week between sessions to the exercises and materials, and post questions, and answers, on message boards. For more information, please drop me, Daniel Gilbert, an email.

Does this sound like something for you?  If so, please do sign-up.

The sessions will be led by Alistair Watson, who developed the Fiscal Analysis of Resources Industries modelling too for the International Monetary Fund and has modelled for governments, industry and civil society for 20 years. They explore the public interest financial modelling paradigm developed by OpenOil, and will also discuss full project models already published on the Internet of oil projects in Chad (extractives company: Glencore), Afghanistan (CNPC) and the Bulyanhulu gold mine in Tanzania (Acacia Resources). 

Each Friday for five weeks (14:00 UK time, 15:00 CET, 9:00 EST), Alistair, together with OpenOil director Johnny West, will lead a 90-minute video presentation of modules in the training course and answer questions.  By the way, it's also entirely free.

NB: we may need to restrict numbers to create a viable learning environment. Applicants will be informed by Tuesday November 10 of if a place is available on the first course. Familiarity with Excel is advised but no prior experience of extractives project modelling is necessary. Priority on the first course will be given to applicants from extractives dependent economies. A French-language version of the same online training will be offered in January 2016.

Let the conversations begin!  Including here, on GOXI… 

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