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African states urged to link up in drafting oil local content policies

Oil exploration in northern Kenya. FILE PHOTO | NMG
Oil exploration in northern Kenya. FILE PHOTO | NMG 

African authorities should collaborate in developing policies and regulations for local content in the oil and gas industry to avoid slowing down projects, a new report suggests.

The Africa Oil and Gas Review 2017 report by consultancy PricewaterhouseCoopers indicates that more than a quarter of surveyed oil multinationals operating in Africa said they had had to postpone projects because of local content policies.

A further 15 per cent of them said they have been forced to cancel or relocate projects because of regulations, with only 10 per cent reporting accelerated activity.

Kenya, whose proven oil reserves in the Lokichar Basin is estimated in the upwards of 750 million barrels, has drafted a local content bill which is yet to be passed into law.

The Local Content Bill, 2016, sponsored by Baringo Senator Gideon Moi, will require exploration firms to develop comprehensive skills development and technology transfer programmes to enhance job opportunities for local community.

The bill also seeks to set a minimum percentage of value of goods and services that the firms should outsource from the locals.

“Local content development continues to require a highly collaborative approach between government, local industry, international firms, communities and the education system,” PwC says in the report.

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