30, May, 2017

Boosting the benefits from the oil and gas sector through local content

An analysis and discussion of the dimensions and implications of local content policy and its adoption as a development strategy in oil and gas rich countries

Participants of the Online Learning Alliance on Oil and Gas Local Content came from 34different countries across 5 continents. They discussed and reflected on different strategies and approaches to local content and analysed the policy and outcome experiences of oil and gas producing countries in Latin America and Africa. The focus was on identifying the challenges and opportunities when designing and adopting local content as a strategy to enhance the contribution of the extractive sector to the national economy. Insights from international experts as well as comparative analysis between the two regions, facilitated by the moderators, supported this inter-regional lesson learning.

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Key Conclusions:

  • In contemporary non-renewable resource endowed economies; local content has become a priority strategy for development. This is why governments are enacting more relevant legislation and policies, while at the same time International Oil Companies (IOCs) are making commitments to review their practices and to involve citizens in harnessing oil and gas resources.
  • World over, policy makers and implementers are adopting various local content strategies, the most common ones being national industry participation, skills development and employment generation.
  • Two key factors that can contribute to the success of local content strategies are i) a specific framework relating to local content, and ii) a strong National Oil Company (NOC) with clear guidelines and strategy
  • Recent studies show that countries which prioritise national industry participation as a local content strategy have achieved better outcomes in terms of national skill development and job creation.
  • Based on the successes achieved through the enterprise centres in Nigeria, Angola and Chad, African countries such as Uganda, Kenya, Tanzania and South Sudan, which are still developing local content strategies, should consider the development of training programmes through such centres in order to build skills in the local workforce and promote the long-term reputation of local companies.

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