Local Content In The Global Oil Industry: Driving Growth, Transforming Emerging Economies Local Content is gradually changing the face of economies of the world, helping to transform emerging economies, while helping to create a level playing field in the global oil and gas industry. Analysis of the global oil and gas industry reveals that a number of countries, since the introduction of local content, have been able to open their oil and gas sector for the participation of their indigenes; create increased access to their oil fields for higher productivity while building capabilities in their vicinity to support increased investment in the industry. In addition, it was revealed that local content has helped a number of countries in building a technologically advanced oil and gas industry, while a number of others have developed competence in critical areas of operation. According to report, the impact of local content is also seen, in that it has helped a number of countries to optimize the linkages between the oil and gas sector and the economy and also played a major role in infrastructural development and utilization. Local content is the development of local skills, technology transfer, and use of local manpower and local manufacturing. Local content has become a very important issue due to the fact that in this day and age, every country would like its citizens to capture the commanding heights of its economy and thus assist to keep its wealth within its borders, as well as providing jobs to the ever increasing population. This is achieved through capacity building, creating small and medium scale enterprises, SME, as well as offering products and services locally. In addition, global management consulting, technology services and outsourcing company, Accenture, in a report titled, ‘Developing local content programs’, defines local content as total value added to a national economy through the localised production of select services and key materials, equipment and goods related to target sectors of the economy upon which such nation is dependent. According to Accenture, for states with National Oil Companies, NOC, such as Nigeria, Brazil, Malaysia and Indonesia, where oil and gas are prime national assets, local content is defined as the total combination of related services and production of goods and materials used within the local oil and gas industry. “It also covers the spillover effect of such activities on other sectors of the economy with the underlying assumption that such linkages are capable of stimulating increased economic growth across other areas,” Accenture said. Accenture further stated that host countries and states with National Oil Companies, NOC, have widened local content focus to cover policies and initiatives to stimulate industrial development; promote and diversify the national economy; bring in advanced technology and competence; and develop local capability resulting in a competitive local supply base and technically competent workforce. It said, “Today, the rules of the game have changed: developing local economies, stimulating industrial development, increasing local capability, building a skilled workforce and creating a competitive supplier base—also referred to as local content—are minimum requirements for doing business with host countries and National Oil Companies (NOC).” Presently, a number of countries have achieved success in developing models that define how technology and competence will be either transferred or developed, chief among these countries are Norway, Brazil, Ghana and Mozambique.
Posted on: Sat, 09 Nov 2013 08:51:31 +0000
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