Rules of Engagement: A Review of Regulatory Instruments Designed to Promote and Secure Local Content Requirements in the Oil and Gas Sector

Abstract

Abstract:Regulatory interventions, such as Local Content (LC) requirements, have been incorporated to counter market forces to maximise petroleum revenues. This has been undertaken with the hypothesis that the governments of petroleum-producing countries depend heavily on petroleum sectors for development, yet energy markets inadequately allocate these resources. Thus, governments revise existing, and often out-of-date, petroleum laws and introduce new petroleum legislation to specifically promote socio-economic objectives. This article explores the key legislative instruments of LC as developed and implemented in the oil and gas sectors both from developed and developing countries' perspectives. In assessing the overall policy approach, this article evaluates instruments used to secure Local Content requirements in the oil and gas industry. In conclusion, governments must identify appropriate frameworks that consider the political and regulatory challenge of striking a balance between incentivising upstream investors and fulfilling national interests, such as creating jobs.

Formation of Infrastructure Provision for Personnel Needs in Gas and Petrochemical Cluster: The Case of Iran

“…It, therefore, has the endogenous factors development system mechanism of design and management of oil contracts. Moreover, the main task of international oil companies is not to train personnel for oil-rich countries, since they do not logically have the necessary incentives to perform this task (Asiago 2017). Teaching and promoting scientific and technical skills in the oil industry has always been the focus of the country's oil officials, and this has not been entirely exclusive to oil contracts.…”