Local Content Policies in the Oil and Gas Sector

Abstract

Some rights reserved 1 2 3 4 16 15 14 13 World Bank Studies are published to communicate the results of the Bank's work to the development community with the least possible delay. The manuscript of this paper therefore has not been prepared in accordance with the procedures appropriate to formally edited texts. This work is a product of the staff of The World Bank with external contributions. Note that The World Bank does not necessarily own each component of the content included in the work. The World Bank therefore does not warrant that the use of the content contained in the work will not infringe on the rights of third parties. The risk of claims resulting from such infringement rests solely with you. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Nothing herein shall constitute or be considered to be a limitation upon or waiver of the privileges and immunities of The World Bank, all of which are specifically reserved.

Institutions in Transition: Is the Eu Integration Process Relevant for Inward Fdi in Transition European Economies?

“…As the oil and gas projects can be very investments intensive, since obtaining independence, the government of Kazakhstan has adopted a series of reforms to liberalize its economy and facilitate foreign investment, first of all in the oil and gas sector. (2014) However, Kazakhstan shows awareness of the potential negative effects of FDI, especially as motives for FDI in Kazakhstan are resource-seeking (Tordo et al 2013). The FDI in the host country may crowd out the domestic firms, and thus have destructive effects on the level of employment and profits in that country (Greenwald and Stiglitz, 2006).…”

Rules of Engagement: A Review of Regulatory Instruments Designed to Promote and Secure Local Content Requirements in the Oil and Gas Sector

“…In broader sense, LC requirements are mandates imposed by government on investors to procure and/or support the growth of an industry [11,21,23]. Ideally, as a requirement, the objective of LC is to effectively expand local participation through creating local jobs or building local industries [24].…”

“…This is because the petroleum industry has distinct characteristics that tend to favour global supply chains with long-term contracts, which in turn preclude local participants [11]. Thus, intervention is often undertaken to mitigate the challenges encountered by local companies amidst the advantages enjoyed by foreign companies [4].…”

“…The common forms of binding mandates are pursued within legislative instruments (law, decrees, and hydrocarbon agreement) while non-binding instruments include policies, guidelines, and initiatives. Most oil-producing nations evaluated tend to formulate them either as a provision within a legislative instrument (e.g., a regulation or decree) or a provision under a hydrocarbon agreement (for example a production-sharing agreement (PSA) or license) [11].…”

Towards best practice jobs decision-making: institutionalising fuller consideration of the social context in resource projects

“…A structural skills mismatch is evident across many developing economies (such as Malaysia, South Africa, Tanzania, and Brazil), between those who are unemployed and underemployed and the skills and abilities required by the resource sector (Tordo et al 2013;Tshilongamulenzhe 2012;World Bank 2013b). The same is evident in indigenous communities in developed economies where "the mere proximity to jobs does not mean that people are qualified for them or that employers will employ them" (Moran 2009, p. 2).…”