But the concept has only become popular in Africa in recent years due to the new discoveries and the rising price of oil, according to Willie Olsen a senior adviser with INSTOK Norwegian Oil and Gas Partners.
“Local content in this part of the world is very politicized and there is a high degree of meeting expectations and the word local content has become a buzz word in recent years due to higher oil prices,” says Mr. Olsen.
“But at the same time it is clear that the aim is to create more jobs and develop the industrial base and you understand why this policy comes and you have to ask will the policies work?” he says.
Nigeria is the loudest and most controversial voice on local content and Africa’s biggest oil player, producing 2.3 million barrels of crude per day, according to the latest report of the International Energy Agency. Last year after the government passed the Nigerian Oil and Gas Industry Local Content Development Act, oil majors voiced their objections.
The local bill gives Nigerian independent operators first consideration in the awarding of oil blocks, oil field licenses, and it specifies that exclusive consideration should be given to Nigerian-owned service providers. The law also requires that oil companies and industry service providers be required to train Nigerians.