Local Content in the Oil and Gas Sector

A number of countries have recently discovered and are developing oil and gas reserves. Policy makers in such countries are anxious to obtain the greatest benefits for their economies from the extraction of these exhaustible resources by designing appropriate policies to achieve desired goals. One i...

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Main Authors: Tordo, Silvana, Warner, Michael, Manzano, Osmel E., Anouti, Yahya
Format: Publication
Language:en_US
Published: Washington, DC: World Bank 2013
Subjects:
EI
GDP
LNG
Oil
WTO
Online Access:http://hdl.handle.net/10986/15930
id okr-10986-15930
recordtype oai_dc
repository_type Digital Repository
institution_category Foreign Institution
institution Digital Repositories
building World Bank Open Knowledge Repository
collection World Bank
language en_US
topic Accounting
adverse effects
agriculture
approach
arbitrage
bilateral trade
budget constraints
capital investment
climate
comparative advantage
comparative advantages
competitive advantage
competitiveness
construction workers
consumers
consumption of commodities
crude oil
debt
deposits of hydrocarbons
Development Policies
development policy
distillation
domestic oil
domestic production
domestic supply
drilling
drivers
dry gas
economic benefits
economic costs
economic diversification
economic efficiency
economic geography
economic growth
economic impact
economic sectors
Economics
economies of scale
EI
electricity
Employment
employment opportunities
environmental damage
exchange rates
externalities
externality
extraction
feedstock
financial crisis
financial flows
financial sector
fiscal incentives
foreign direct investment
foreign workers
free trade
fuel
fuel oil
fuels
future research
gas activities
gas companies
gas company
gas exploration
gas exports
gas extraction
gas facilities
gas fields
Gas Industry
gas oil
gas operations
gas production
gas reserves
gas sectors
gas taxation
gas treatment
gas-producing countries
gasoline
GDP
general equilibrium
general equilibrium model
gross domestic product
gross output
growth potential
heat
human capital
hydrocarbon potential
hydrogen
Import quotas
import substitution
imports
income
industrial plants
industrialization
inefficiency
innovation
insurance
jobs
kerosene
Labor Economies
labor force
labor mobility
liquefaction
liquefied petroleum gas
living standards
LNG
macroeconomic policies
market equilibrium
market failure
market failures
market outcomes
methane
monitoring arrangements
national economy
national oil
national oil companies
natural gas
natural gas liquids
natural resources
Natural-gas
negative externality
NGLs
Oil
Oil and Gas
Oil and Gas Sector
oil company
oil field
oil industry
oil production
oil products
oil recovery
Oil refining
oil sector
oil wells
oil-producing countries
oil_ and_gas
oil_ and_gas_sector
oil_and_gas
oil_and_gas_sector
opportunity costs
outputs
penalties
per capita consumption
petrochemical industry
petrochemicals
petrochemicals industry
Petroleum
Petroleum Industry
petroleum products
petroleum reserves
Petroleum Sector
petroleum supply
pipeline
pipeline networks
pipelines
policy advice
Policy makers
policy response
political economy
power
power generation
power plants
power station
Primary distribution
private sector
process uses
production costs
production of fertilizers
productivity
profit margins
property rights
protectionism
public good
quantitative analysis
refined products
refineries
refinery
refining
rents
reservoir
reservoir rock
reservoirs
safety
salt caverns
search for oil
seismic surveys
spillover effects
storage facilities
submersible pumps
Suppliers
Sustainable Energy
tax incentives
Total Output
trade liberalization
trade proposals
transportation fuels
unintended consequences
Uruguay Round
utilities
value added
wage rates
Wages
wealth
World Trade Organization
WTO
spellingShingle Accounting
adverse effects
agriculture
approach
arbitrage
bilateral trade
budget constraints
capital investment
climate
comparative advantage
comparative advantages
competitive advantage
competitiveness
construction workers
consumers
consumption of commodities
crude oil
debt
deposits of hydrocarbons
Development Policies
development policy
distillation
domestic oil
domestic production
domestic supply
drilling
drivers
dry gas
economic benefits
economic costs
economic diversification
economic efficiency
economic geography
economic growth
economic impact
economic sectors
Economics
economies of scale
EI
electricity
Employment
employment opportunities
environmental damage
exchange rates
externalities
externality
extraction
feedstock
financial crisis
financial flows
financial sector
fiscal incentives
foreign direct investment
foreign workers
free trade
fuel
fuel oil
fuels
future research
gas activities
gas companies
gas company
gas exploration
gas exports
gas extraction
gas facilities
gas fields
Gas Industry
gas oil
gas operations
gas production
gas reserves
gas sectors
gas taxation
gas treatment
gas-producing countries
gasoline
GDP
general equilibrium
general equilibrium model
gross domestic product
gross output
growth potential
heat
human capital
hydrocarbon potential
hydrogen
Import quotas
import substitution
imports
income
industrial plants
industrialization
inefficiency
innovation
insurance
jobs
kerosene
Labor Economies
labor force
labor mobility
liquefaction
liquefied petroleum gas
living standards
LNG
macroeconomic policies
market equilibrium
market failure
market failures
market outcomes
methane
monitoring arrangements
national economy
national oil
national oil companies
natural gas
natural gas liquids
natural resources
Natural-gas
negative externality
NGLs
Oil
Oil and Gas
Oil and Gas Sector
oil company
oil field
oil industry
oil production
oil products
oil recovery
Oil refining
oil sector
oil wells
oil-producing countries
oil_ and_gas
oil_ and_gas_sector
oil_and_gas
oil_and_gas_sector
opportunity costs
outputs
penalties
per capita consumption
petrochemical industry
petrochemicals
petrochemicals industry
Petroleum
Petroleum Industry
petroleum products
petroleum reserves
Petroleum Sector
petroleum supply
pipeline
pipeline networks
pipelines
policy advice
Policy makers
policy response
political economy
power
power generation
power plants
power station
Primary distribution
private sector
process uses
production costs
production of fertilizers
productivity
profit margins
property rights
protectionism
public good
quantitative analysis
refined products
refineries
refinery
refining
rents
reservoir
reservoir rock
reservoirs
safety
salt caverns
search for oil
seismic surveys
spillover effects
storage facilities
submersible pumps
Suppliers
Sustainable Energy
tax incentives
Total Output
trade liberalization
trade proposals
transportation fuels
unintended consequences
Uruguay Round
utilities
value added
wage rates
Wages
wealth
World Trade Organization
WTO
Tordo, Silvana
Warner, Michael
Manzano, Osmel E.
Anouti, Yahya
Local Content in the Oil and Gas Sector
relation World Bank Study;
description A number of countries have recently discovered and are developing oil and gas reserves. Policy makers in such countries are anxious to obtain the greatest benefits for their economies from the extraction of these exhaustible resources by designing appropriate policies to achieve desired goals. One important theme of such policies is the so-called local content created by the sector- the extent to which the output of the extractive industry sector generates further benefits to the economy beyond the direct contribution of its value-added, through its links to other sectors. Local Content Policies (LCPs) were first introduced in the North sea in the early 1970s and ranged from restrictions on imports to direct state intervention in the oil sector. While LCPs have the potential to stimulate broad-based economic development, which is necessary to alleviate poverty and achieve the United Nation's Millennium Development Goals (MDGs), their application in petroleum-rich countries has achieved mixed results. This paper serves to introduce the topic by describing policies and practices meant to foster the development of economic links from the petroleum sector, as adopted by a number of petroleum-producing countries both in and outside the Organization for Economic Co-operation and Development (OECD). The paper is organized as follows: chapter one defines local content and briefly illustrates the links between the petroleum sector and other economic sectors (where policies may be able to increase the economic benefits of the petroleum sector). An attempt is made to measure local content levels in a wide sample of petroleum-producing countries including net importers and net exporters, and countries at different stages of economic development to put LCPs in context and to consider if the structure of an economy is a key driver of local content levels. Chapter two discusses the arguments that have been used in favor and against the use of productive development policies in general and LCPs in particular. Chapter three provides an outline of the tools and types of LCPs that have been used by petroleum producing countries, and present their strengths and weaknesses. Chapter four focuses on issues related to the measurement and monitoring of LCPs, and discusses the limitations of alternative metrics. Chapter five provides a description of LCP objectives, implementation tools, and reporting metrics used in a selected sample of oil-producing countries including Angola, Brazil, Kazakhstan, Indonesia, Malaysia, and Trinidad and Tobago and draw initial lessons that may be relevant to other countries.
format Publications & Research :: Publication
author Tordo, Silvana
Warner, Michael
Manzano, Osmel E.
Anouti, Yahya
author_facet Tordo, Silvana
Warner, Michael
Manzano, Osmel E.
Anouti, Yahya
author_sort Tordo, Silvana
title Local Content in the Oil and Gas Sector
title_short Local Content in the Oil and Gas Sector
title_full Local Content in the Oil and Gas Sector
title_fullStr Local Content in the Oil and Gas Sector
title_full_unstemmed Local Content in the Oil and Gas Sector
title_sort local content in the oil and gas sector
publisher Washington, DC: World Bank
publishDate 2013
url http://hdl.handle.net/10986/15930
_version_ 1764432128325451776
spelling okr-10986-159302021-04-23T14:03:27Z Local Content in the Oil and Gas Sector Tordo, Silvana Warner, Michael Manzano, Osmel E. Anouti, Yahya Accounting adverse effects agriculture approach arbitrage bilateral trade budget constraints capital investment climate comparative advantage comparative advantages competitive advantage competitiveness construction workers consumers consumption of commodities crude oil debt deposits of hydrocarbons Development Policies development policy distillation domestic oil domestic production domestic supply drilling drivers dry gas economic benefits economic costs economic diversification economic efficiency economic geography economic growth economic impact economic sectors Economics economies of scale EI electricity Employment employment opportunities environmental damage exchange rates externalities externality extraction feedstock financial crisis financial flows financial sector fiscal incentives foreign direct investment foreign workers free trade fuel fuel oil fuels future research gas activities gas companies gas company gas exploration gas exports gas extraction gas facilities gas fields Gas Industry gas oil gas operations gas production gas reserves gas sectors gas taxation gas treatment gas-producing countries gasoline GDP general equilibrium general equilibrium model gross domestic product gross output growth potential heat human capital hydrocarbon potential hydrogen Import quotas import substitution imports income industrial plants industrialization inefficiency innovation insurance jobs kerosene Labor Economies labor force labor mobility liquefaction liquefied petroleum gas living standards LNG macroeconomic policies market equilibrium market failure market failures market outcomes methane monitoring arrangements national economy national oil national oil companies natural gas natural gas liquids natural resources Natural-gas negative externality NGLs Oil Oil and Gas Oil and Gas Sector oil company oil field oil industry oil production oil products oil recovery Oil refining oil sector oil wells oil-producing countries oil_ and_gas oil_ and_gas_sector oil_and_gas oil_and_gas_sector opportunity costs outputs penalties per capita consumption petrochemical industry petrochemicals petrochemicals industry Petroleum Petroleum Industry petroleum products petroleum reserves Petroleum Sector petroleum supply pipeline pipeline networks pipelines policy advice Policy makers policy response political economy power power generation power plants power station Primary distribution private sector process uses production costs production of fertilizers productivity profit margins property rights protectionism public good quantitative analysis refined products refineries refinery refining rents reservoir reservoir rock reservoirs safety salt caverns search for oil seismic surveys spillover effects storage facilities submersible pumps Suppliers Sustainable Energy tax incentives Total Output trade liberalization trade proposals transportation fuels unintended consequences Uruguay Round utilities value added wage rates Wages wealth World Trade Organization WTO A number of countries have recently discovered and are developing oil and gas reserves. Policy makers in such countries are anxious to obtain the greatest benefits for their economies from the extraction of these exhaustible resources by designing appropriate policies to achieve desired goals. One important theme of such policies is the so-called local content created by the sector- the extent to which the output of the extractive industry sector generates further benefits to the economy beyond the direct contribution of its value-added, through its links to other sectors. Local Content Policies (LCPs) were first introduced in the North sea in the early 1970s and ranged from restrictions on imports to direct state intervention in the oil sector. While LCPs have the potential to stimulate broad-based economic development, which is necessary to alleviate poverty and achieve the United Nation's Millennium Development Goals (MDGs), their application in petroleum-rich countries has achieved mixed results. This paper serves to introduce the topic by describing policies and practices meant to foster the development of economic links from the petroleum sector, as adopted by a number of petroleum-producing countries both in and outside the Organization for Economic Co-operation and Development (OECD). The paper is organized as follows: chapter one defines local content and briefly illustrates the links between the petroleum sector and other economic sectors (where policies may be able to increase the economic benefits of the petroleum sector). An attempt is made to measure local content levels in a wide sample of petroleum-producing countries including net importers and net exporters, and countries at different stages of economic development to put LCPs in context and to consider if the structure of an economy is a key driver of local content levels. Chapter two discusses the arguments that have been used in favor and against the use of productive development policies in general and LCPs in particular. Chapter three provides an outline of the tools and types of LCPs that have been used by petroleum producing countries, and present their strengths and weaknesses. Chapter four focuses on issues related to the measurement and monitoring of LCPs, and discusses the limitations of alternative metrics. Chapter five provides a description of LCP objectives, implementation tools, and reporting metrics used in a selected sample of oil-producing countries including Angola, Brazil, Kazakhstan, Indonesia, Malaysia, and Trinidad and Tobago and draw initial lessons that may be relevant to other countries. 2013-09-30T19:29:00Z 2013-09-30T19:29:00Z 2013-07 978-0-8213-9931-6 10.1596/978-0-8213-9931-6 http://hdl.handle.net/10986/15930 en_US World Bank Study; CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank Washington, DC: World Bank Publications & Research :: Publication Publications & Research