Egypt
- introductionLocal content is not a particularly urgent issue in Egypt's oil industry. There
is, as yet, no clearly defined local content strategy, for three main reasons.
Firstly, the country's economy is, whilst not immune, better protected than
many
developing producers against price fluctuations. Secondly, a relatively high
level of human capital means that building up local capacity is not a priority.
Thirdly, the regime of 81-year old Hosni Mubarak is, partly for the first two
reasons, less concerned with building up a local content industry than many
newer
governments: it simply has not had to do so during its' almost three decades of
power.
However, IOCs do report that there is increasing pressure to boost the levels of
local content in training, employment, and boosting local capacity. Much of
this
pressure comes after the exploration phase, when foreign companies are required
to set up joint ventures with the EGPC, EGAS or Ganoupe and make decisions with
a joint board.
Legislation determining the scope of participation by international companies in
the Egyptian economy is extensive and in addition, production sharing
agreements
stipulate a general obligation to source goods and services locally.