Wider African energy summit highlights role of service companies in boosting local content

Global service companies were highlighted as a potential vehicle for local content development in Africa during the recent Wider African Energy Summit in Aberdeen, hosted in partnership with the African Energy Chamber. The value of local content in driving economic growth was a key focus – emphasizing that as the continent’s oil and gas value chain evolves, opportunities for service companies to strengthen local content become increasingly apparent. This was showcased in a presentation delivered by Ileana Ferber, CEO and Founder of Colibri Business Development LLC. “Service companies can become a key enabler of local content in Africa. In addition to upstream opportunities in Africa, we have a lot of prospects in midstream infrastructure. As the sector grows, there are a lot of opportunities for service companies. Service companies are the bridge between operators and suppliers,” she said.

While Africa’s oil and gas sector has been largely focused on upstream activities, a recent shift is being seen across the continent, with nations prioritizing mid- and downstream infrastructure under efforts to strengthen trade, fuel access and domestic market development. This has not only created business prospects for service companies but opened new doors for local content development – from job creation to supplier contracts to workforce training and technology transfer. “There are different elements associated with local content. We want to train people – in both soft and hard skills -; we want to enhance supplier development, to ensure they have the capabilities to meet industry standards; and we want technology transfer, strengthening tacit knowledge and know-how as well as research and development,” Ferber shared.

Many countries across the continent are implementing local content regulations with the aim of generating economic opportunities for local populations. Ferber pointed to some of the challenges with local content requirements, highlighting the need for greater coordination between government and industry in the development of these policies. “Local content requirements can be prescriptive, with minimum engagement with the industry. They can feature unrealistic targets that exceed local capability and skills. They can also be unfeasible in certain project phases,” she said. However, she also described the opportunities, stating that “local content requirements can develop infrastructure to strengthen the economy, create incentives to develop other industrial sectors and enable programs to develop SMEs as well as unrepresented groups.