How do oil producers respond to giant oil field discoveries?

This paper studies how petroleum producers respond to a giant oil field discovery. Using a large panel of country-level production data and a difference-in-differences identification approach, I show that domestic production levels respond before a newly found oil field has come on line, indicating that producers raise extraction rates from existing reservoirs. Given that domestic petroleum consumption rises by less in response to a discovery, at least part of the increase in production seems to go into (net) oil exports. I find substantial heterogeneity in the impulse responses of oil production and consumption with respect to the location and size of a giant oil field and the country’s OPEC membership status.