ABSTRACT
This chapter looks broadly at the link between petroleum and corruption. Petroleum is the lifeblood of industrialized economies. Its products are indispensable commodities. Petroleum products have highly elastic demand Oil and gases are essential goods for all modern economies. Extractive industry (EI) countries are generally dependent upon export revenues from these natural resources, rather than taxes upon personal income and corporate profits. There is an emerging consensus that many of the negative outcomes are the results of corruption, made possible by pre-existing governance weaknesses. Politically and economically underdeveloped countries often suddenly find themselves with a surge of financial inflows into their country when a new natural resource reserve is exploited. According to Transparency International the oil and gas sector is perceived the third most likely to involve bribes, followed only by public works contracts and the defense industry. Multinational companies are issuing public statements and joining forces to combat systemic corruption.
