Welcome to Menas'
Local Content Online
Disclaimer: Please note that this web site is no longer being updated.
Until the end of 2009 this web site was a subscription-based service; it is now
available as a free resource for anyone interested in Local Content. In order
fully access all the content on this site you will have to register with Menas Associates here.
We hope you find these pages a useful source of information. If you would like
to know more about Local Content requirements in any particular country or
region, please contact one of our consultants here.
There is a renewed interest in local and national content driven by a number of
converging factors, including a requirement for transparency in the oil and gas
sector, the need to combat “Dutch Disease” and an increasing emphasis on sustainability. Resource-rich countries are
becoming more and more aware of the importance of building strong and durable
relationships with international companies for the benefit of their economies.
Both national and international companies are looking to improve their local
content policies due to both informal and (increasingly) formalised dynamics,
legislations, guidelines and standard contract terms which stipulate that local
content programmes go beyond philanthropy and the hiring of manual labour.
There are also internal drivers at play. A well planned and conscientiously
implemented local content strategy may bring direct economic benefits, not only
terms of reducing the costs of labour, goods or services, but as a means of
differentiation in a competitive market, of forging relationships with
and even hedging against political change.
There are also risk factors for all involved such as: governments setting overly
ambitious challenges in light of actual capacity within a given country or
region; or legislation being too broad and ill-defined leaving foreign
unsure of what a host government really requires. Additionally, companies are
sometimes tempted to pay lip-service to local content, funding development or
projects but doing little to confer the knowledge and skills required to
increase capacity within the host country. Local contractors are occasionally
left with a sense of being patronised by IOCs who are unwilling to contract
projects large enough to justify investment in the technology and services
to begin competing nationally, regionally or globally.
These are few of the many factors to consider regarding local content, and might
interest IOCs, oil and gas companies, lawyers and other service providers,
regulators or ministries who may wish to see how their policies, laws or
stack up against those of others.