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Incentivising Community Content: the Interface of Community Investment Programmes with Local Content Practices in the Oil and Gas Development Sector

Briefing/policy papers

There is growing understanding among major oil and gas development companies that a timely community skills and supply-chain analysis is valuable to understanding how existing ‘community investment’ programmes, might interface with their broader initiatives to enhance ‘local content’ (ie. the capture of employment and procurement opportunities by nationals and nationally-based firms). Prospects of closer interface between these two currently disparate business activities provides a new avenue for competitive differentiation among oil companies. Successful ‘community content’ strategies are essentially about building local capability over the long-term, and ensuring that community-based skills and micro-enterprises, as well as small and medium sized firms who employ community members, are marketable in sectors outside the volatile and capital-intensive upstream energy industry.   This paper is aimed at public and private sector decision-makers closely engaged in oil and gas development sector in developing countries, as well as the private sector development (PSD) and small and medium scale enterprise (SME) support units embedded within international development agencies. Illustrations are given from Nigeria (a low-income country) and Trinidad and Tobago (an upper-middle income country). The paper falls into three parts: the growing importance of local content in the oil and gas development sector; the challenges for company-driven community investment programmes; and the interface of community investment with local content.

Michael Warner