A comparative analysis of the economic impact of the implementation of local content policies in Oil and Gas producing countries. Ghana and Norway

Research Paper (postgraduate) , 2018 , 52 Pages , Grade: A

Business economics - Business Management, Corporate Governance

Most petroleum-producing countries have enacted local legislation and content to regulate international Oil and Gas companies. However, there is a dearth of literature focusing on local content policies. Due to the gap in the literature, the research focused on exploring the contents and the impacts of the LCP implementation in Norway and Ghana. These two petro-states have been chosen because they emphasis the contrast between a developing country which initially did not have the means to develop a regulatory framework for local content (Ghana) and a developed country which did (Norway).
The aim of the study was to determine the economic impact of the implementation of local content policies in Oil and Gas producing countries, using Ghana and Norway as examples.

There are a number of major conclusions from the research. First, very high minimum targets for local employment can lead to the creation of skill gaps in some areas while only achieving increases in some job categories; mostly the semi-skilled and the unskilled positions. Secondly, considering the unemployment, there appears to be no relationship between the unemployment percentage and the quality of the local content policies. Third, where National Oil Company takes the lead in the fostering of local content policies, better results are achieved in terms of skills transfer, increased local sourcing and better training programs. Moreover, mandatory cooperation through JVs and partnerships leads to greater technology spill over from the foreign companies to the local companies. Coupled with the above, higher government spending by there would be an increase in the local supply of both non-specialised and specialised products to the oil and gas industry. Finally, the successful LCPs require the provision of fiscal incentives to the local firms, as well as empowering the national oil company to foster technical skills transfer and fostering training. Moreover, some contextual situations such as political stability, HDI in terms of the educational attainment and R&D spending were linked to better outcomes of the LCPs.

Based on the findings and the analysis from the research, it is recommended that policy makers and legislators in countries that want to develop local content policies should focus on coordination and getting input from the oil and gas operators, provision of incentives to the local businesses

Inhaltsverzeichnis (Table of Contents)

• Executive Summary
• 1. Introduction
• 1.1 Scope
• 1.2 Aim and Objectives
• 1.2.1 Aim
• 1.2.2 Objectives
• 2.0 Literature Review
• 2.1 Introduction
• 2.2 Nature of Local Content Policy in Oil and Gas
• 2.3 Overview of Local Content Policies in Oil and Gas including legislations in Ghana and Norway
• 2.4 Impact of implementing LCP on economic factors in Ghana and Norway
• 2.4.1 Improvement and expansion of local businesses
• 2.4.2 Success in garnering technology and management skills
• 2.4.3 Improvement of derivative goods and services
• 2.4.4 Rise in the Gross Domestic Product (GDP)
• 2.4.5 Increase in employment
• 2.4.6 Retraining of local labour force
• 2.5 Theoretical Framework and Overview
• 2.5.1 Industry Network Theory
• 2.5.2 Keynesian Economic Theory
• 3.0 Analysis
• 3.1 Introduction
• 3.2 Comparative Analysis
• 3.2.1 Justification for the selection criteria
• 3.2.2 Selection of contextual factors
• 3.2.3 Criteria for the country selection
• 3.3 Data/Evidence
• 3.4 LCP Policy Analysis of Ghana and Norway
• 3.4.1 Context
• 3.4.2 The Applied LCPs
• 3.4.3 Outcomes of the LCP in Norway and Ghana
• 4.0 Discussion
• 4.1 Local employment
• 4.2 Local sourcing of services and goods
• 4.3 Training requirements
• 4.4 Technology Transfer
• 5.0 Conclusion and recommendations
• 5.1 Conclusion
• 5.2 Recommendations

Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)

This study aims to determine the economic impact of implementing local content policies in oil and gas producing countries, using Ghana and Norway as case studies. The research explores the benefits and challenges associated with these policies in developing countries, particularly focusing on how other nations can learn from the experiences of Ghana and Norway. The study also aims to provide recommendations for improving the implementation of such policies.

• Economic impact of local content policies
• Benefits and challenges of implementing local content policies in developing countries
• Comparative analysis of local content policies in Ghana and Norway
• Recommendations for improving local content policy implementation
• Key factors influencing the effectiveness of local content policies

Zusammenfassung der Kapitel (Chapter Summaries)

• Introduction: Introduces the research topic, scope, aim, and objectives of the study. Highlights the importance of local content policies in oil and gas producing countries and sets the context for the comparative analysis of Ghana and Norway.
• Literature Review: Examines existing literature on local content policies, focusing on their nature, implementation in various countries, and economic impacts. Discusses relevant theories, including Industry Network Theory and Keynesian Economic Theory.
• Analysis: Presents a comparative analysis of local content policies in Ghana and Norway. This section delves into the contextual factors, applied policies, and outcomes in both countries. It also explains the justification for the selection criteria and data used in the analysis.
• Discussion: Analyzes the findings of the research, focusing on specific aspects like local employment, sourcing of services and goods, training requirements, and technology transfer. It provides insights into the factors that contribute to the effectiveness of local content policies in different contexts.

Schlüsselwörter (Keywords)

This research focuses on local content policies, economic impact, oil and gas production, comparative analysis, developing countries, Ghana, Norway, benefits, challenges, recommendations, industry network theory, Keynesian economic theory, local employment, local sourcing, technology transfer, training, contextual factors, political stability, Human Development Index (HDI), research and development (R&D) spending.

• College: University of Bedfordshire
• Grade: A
• Author: International Business Management David Onditi (Author)
• Publication Year: 2018
• Pages: 52
• Catalog Number: V537200
• ISBN (eBook): 9783346136022
• ISBN (Book): 9783346136039
• Language: English
• Tags: ghana, norway