A research by Schlumberger’s strategic management consulting arm Schlumberger Business Consulting (SBC) says there is a better appreciation by the oil and gas industry of the need for local content participation.
This follows the outcome of a local content forum by SBC dubbed “Optimizing Local Benefits from Oil & Gas Projects” that brought together E&P operators, regulatory bodies, EPC contractors, tertiary educational institutions and financial institutions convened to share best practice regarding local content initiatives.
The research narrows down discussions into four pillars to local content development towards sustainable socio-economic growth namely developing a national talent pool, enhancing the local supply chain, pioneering approaches to fund social infrastructure and local content regulation governance.
Under developing a national talent pool SBC says research has shown that local content has had a bigger impact than earlier thought on employment with one direct job generating 2 to 3 jobs indirectly and up to eight jobs can also be generated by increased local economic activities induced by the spending of oil and gas staff.
To develop the talent pool the research calls for coordinated planning and close collaboration amongst a large variety of stakeholders with competency requirements needed to be formulated determined based on expected activity levels of oil and gas operations in the short, medium and long term.
Under enhancing local supply chain capabilities, the research notes that vendor prequalification requirements have inhibited the participation of local suppliers in the oil and gas industry. SBC then calls for close working between local suppliers and oil and gas players where the latter can help prepare the suppliers by in advance informing them about future demand and required standard.
In the third pillar the research calls on governments, petroleum development funds and industry players to work close with financial institutions in deploying various instruments to promote local participation and thus increase the impact of oil and gas investments.
Lastly SBC says a balance between promoting both rapid and efficient project delivery and supporting development of local content is necessary provide a stable platform for industry growth.