The discovery oil resources raise hope of significant economic upturn locally, and the creation of new jobs in numbers often estimated in the hundreds of thousands. The reality however is often very different.
The oil curse is well documented and in many parts of sub-Saharan Africa – Nigeria, Equatorial Guinea and Angola, to name three – oil wealth contributes directly to internal conflict and environmental destruction, exacerbating the problems of poor governance and corruption while doing little to alleviate poverty.
In order to develop sustainable and pro poor employment strategies it is important to analyse where in the framework of a typical oil development industry most of the employment takes place. It is important to understand the oil and gas value chain and the potential of local content development. Therefore, the real employment opportunities and the skills required to meet this demand.
What is local content?
In December 2008 IPIECA members agreed the following definition – local content is the added value brought to a host nation (national, regional and local areas in that country, including communities) through the activities of the oil and gas industry. Activities may include:
- Workforce development (international oil companies/national oil companies, contractors/sub-contractors):
- Employment of national, regional & local workforce
- Training of national, regional & local workforce
- Investments in supplier development (all oil and gas goods and services, including engineering and fabrication yards):
- Developing supplies and services locally
- Procuring supplies and services locally
- Community development (optional)