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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Washington, DC: World Bank
2013
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| Online Access: | http://hdl.handle.net/10986/15930 |
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okr-10986-15930 |
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oai_dc |
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Digital Repository |
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Foreign Institution |
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Digital Repositories |
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World Bank Open Knowledge Repository |
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World Bank |
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en_US |
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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 |
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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 |