Can African local content thrive in a lower-cost upstream industry? Report

Insight 26 November 2019

Get this report*

$1,350

You can pay by card or invoice

Share link

First name
Last name
Job Title
Company
Email
Telephone

Country

Message

Consent

Please keep me informed about Wood Mackenzie products, services and events.

Submit Category

For details on how your data is used and stored, see our Privacy Notice.

- FAQs about online orders
- Find out more about subscriptions

*Please note that this report only includes an Excel data file if this is indicated in "What's included" below

Report summary

Local content has become a "must-have" within Sub-Saharan Africa. But since the crash of 2014, there are fewer projects being developed and only the most competitive will progress. How can higher local content costs be absorbed when they contribute to declining competitiveness? Legislation is one approach, but there is evidence that strict target-based methods can increase lead-times and costs. Collaborative approaches work better. This is apparent in countries that are new to upstream, who rely on the industry to educate them on the infrastructure, goods, services and standards required to develop a thriving sector. Many countries' upstream sectors will comprise relatively few projects, while energy transition and the threat to long-term oil demand requires governments to think carefully about focusing on highly specialist upstream skills with limited linkages to the wider economy.

Executive Summary
Sub-Saharan Africa's local content boom
Implications of a lower-cost upstream industry
- There will be fewer projects
- Deepwater and LNG dominate production
How costly is local content?
Strategies to maximise local content
- Good governance and strong partnerships with industry
- A sustainable local service sector
- Realistic and sustainable targets
Conclusion