Oil companies should develop local capacity for services needed now - Chatham House

Oil companies should develop local capacity for services needed now – Chatham House

May 14, 2018 ExxonMobil, News

Emerging oil producers like Guyana, should not hesitate to ensure that oil companies develop local capacity for the goods and services needed now.
This piece of advice was passed on to Guyana since 2016 by Chatham House. This London-based organization has given support to private sector, civil society bodies, and its member states, on the most significant developments in international affairs as well as on how to manage certain sectors efficiently.
Being passionate about the importance of local content, Chatham House advised that Governments should require foreign oil companies to invest in developing local capacity in goods and services for which the petroleum sector has an immediate need, or preferably, in those that have ‘dual use’ applications and can also be used in other sectors of the economy.
The London-based body said that Governments should collaborate with companies to develop training and hiring programmes to ensure that they are well integrated into the petroleum projects’ life cycle and into the national local content strategy.
Chatham House said it is particularly important for developing economies to devise petroleum-sector policies that maximize national development. For this purpose, it opined that governments must have clear local content objectives, which are set within a broader national vision.
It said, “For instance, they should strategically target which skills and supply chains to develop. Governments should identify the sector’s expected needs and assess the potential of the resource base. Foreign oil companies can assist with providing data from their forward plans.”
Chatham House continued, “Governments should assess national capabilities in order to identify strategic targets for national development. At the same time, governments should enact capacity-building plans to ensure that domestic producers are capable of supplying the skills, goods and services that the oil companies require. For maximum impact on the economy, these efforts should be strategic and grounded in a thorough understanding of the local context.”
The Organization added, “Preference should be given to skills that can benefit other sectors of the economy. Governments should then adopt a simple monitoring and reporting system to ensure progress is made in achieving national development goals.”
The body noted that the Government should carefully designed local content policies that address the sector’s needs and are adapted to national capabilities that will be mutually beneficial.

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Oil companies should develop local capacity for services needed now – Chatham House

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