Abstract

Many oil and gas producing states are introducing requirements for ‘local content’ into their regulatory frameworks. These requirements aim to create jobs, promote enterprise development and accelerate the transfer of skills and technologies. Local content has therefore become a strategic issue for the industry, presenting both challenges and opportunities.

The IPIECA Local Content Task Force was set up in 2007 and gathered information on company/national approaches to local content. In December 2008, IPIECA members agreed upon a definition: "Local Content is the added value brought to a host nation (and regional and local areas in that country) through the activities of the oil and gas industry. This may be measured (by project, affiliate, and/or country aggregate) and undertaken through workforce development (including the employment of local workforce and the training of local workforce) and investments in supplier development (including developing supplies and services locally, and procuring supplies and services locally).

A guidance document has been developed based on IPIECA members' efforts to develop good practice in managing local content. It is aimed at practitioners and other company representatives with responsibility for this objective. The guidance is divided into three sections: Part One discusses the business benefits of developing and implementing a local content strategy, including the types of data and analysis that may be used as inputs; Part Two provides detail on developing the primary components of a local content strategy, including building local workforce and supplier capacity; Part Three focuses on key issues that practitioners should consider to help ensure the successful implementation of a local content strategic plan.

The experience of IPIECA members suggests that the time and effort invested in developing local content strategy can create social and commercial benefits that progress economic growth and contribute to sustainable development.

The document also highlights actions for achieving local content objectives, which include four key critical factors: thoroughly analysing the local context; starting early in the project life cycle to consider how and when to intervene; taking a long-term perspective; and effectively managing information flows and transparency.

This content is only available via PDF.
You can access this article if you purchase or spend a download.