Expedite oil and gas skills development to seize full local content opportunities

As the oil industry readies itself to develop resources in northern Kenya, it requires local capacity in the form of technical skills, and provision of services and materials.

The oil investors need this local capacity firstly because it is cheaper than overseas sourcing, and secondly because the proposed upstream petroleum law and regulations prescribe local sourcing. The local content benefits to Kenya are increased employment, commerce and technology transfer.

Although oil and gas exploration work in Kenya has temporarily slowed down, preparations for the development of the discovered oil in Turkana are ongoing while awaiting critical investment decisions.

Oilfield production development shall be followed by construction of oil export infrastructure that includes a pipeline, pump stations, export terminal, and an offshore marine jetty. Opportunities for local content are there and beckoning, provided we have the right skills and enterprise to capture them.

There is a very close link between technical skills and enterprise (SMEs). In the exploration and production of oil, it is the contractors and their sub-contractors who directly hire the technical skills.

Direct hiring by investors is normally limited to managerial, specialist and administrative support staff. Therefore as we train technical skills we should simultaneously develop SMEs that shall directly take up most of these skills.

I will firstly discuss the ongoing oil and gas technical skills development efforts and then look at what should be happening in the arena of enterprise development.

A project code-named SOGA (Skills for Oil and Gas in Africa) was launched in Nairobi a fortnight ago. This is a British and Germany governments funded project with the prime objective of facilitating the development of technical skills to promote employment in the oil and gas sector. The Norwegian government has also undertaken to supplement the funding.

The project encompasses the four oil and gas nations of eastern Africa (Kenya, Uganda, Tanzania, and Mozambique) and has been delegated to the Germany development agency (GIZ) to implement.

The Kenyan SOGA project is structured to work very closely with the private oil industry players, the Directorate of Technical and Vocational Education Training (TVET ) and the two public technical universities in Nairobi and Mombasa to develop systems and capacity for oil and gas technical skills.

Kenya has recently implemented an enabling TVET legal, regulatory and institutional framework which should make it easier for the SOGA project to produce quality certified skills.

The SOGA project aims at developing oil and gas technical training systems and curriculum that are competence-based and which meet the standards defined by oil and gas companies. Curriculum shall also include entrepreneurial training to allow for job mobility and flexibility when the peak jobs in the sector are gone.

The training shall of necessity embrace flexibility to allow for short up-skilling courses and also take place at locations nearer the oil and gas activities.

The SOGA project is also specifically partnering with the Lamu County government to develop capacity for technical skills at the Lamu Polytechnic. This shall prepare the county for the major developments associated with the Lamu Port Southern Sudan-Ethiopia Transport corridor projects and other economic activities like power generation.

Turning to the enterprise development, and specifically in respect of local content, it is the local companies and the SMEs that shall mostly provide labour, services and materials to the oil and gas sector. To maximise benefits from local content, it is important that we urgently commence preparing the local enterprises with the requirements, standards and expectations of the oil and gas sector.

Enterprise development

I will here cite a best practice on enterprise development from Ghana, a country that discovered oil in 2008 and was exporting it by 2010. The Enterprise Development Centre (EDC) website sufficiently defines the oil and gas enterprise development initiative in Ghana as follows:-
“The EDC is a government of Ghana initiative to provide support to Ghanaian SMEs so they can position themselves to take advantage of business opportunities in the oil and gas sector. This involves providing a range of services such as business training, capacity building programmes, advisory services, access to market and information. The EDC will also act as a focal point for co- ordination between SMEs and the oil and gas companies, their contractors and sub- contractors.”

Whereas in Kenya the ministry with the oil and gas sector direct responsibility is the Ministry of Energy and Petroleum, it is the Ministry of Industrialisation and Enterprise Development that has the mandate and structures for developing SMEs. In fact there already exists the Micro and Small Enterprise Authority.

Terms of reference

It is understood that through a World Bank funding facility under the Kenya Petroleum Technical Assistance Project (KEPTAP), action has already been initiated through the ministry of Industrialisation to develop local content capacity for the oil and gas sector. It can therefore be assumed that enterprise development shall be part of terms of reference for the local content funding by the World Bank.

With the funding for oil and gas technical training and enterprise facilitation evidently in place, it is now for the oil and gas investors; the relevant government agencies; and the implementing donor agencies to closely partner to deliver early local content results.

Mr Wachira, Petroleum Focus Consultants
[email protected]