The Oil and Gas sector could have a positive impact on the socio-economic growth of developing countries. However, the connection between oil and gas operations and economic growth is not obvious as it might seem: indeed, the extractive sector can drive the improvement of living conditions of communities close to the producing areas, but some criticalities might emerge during the exploitation of natural resources and governments might fail in leveraging on positive externalities, aimed at achieving the desired level of development. Oil and Gas is traditionally accused to give rise to an enclave economy, disconnected from local business and unable to generate socio-economic development: its self-contained nature may prevent the establishment of linkages with domestic sectors, because especially in developing countries, multinational companies could bring their own equipment, technologies and personnel to carry out their operations. In order to raise gains and better advantage local communities for the socio-economic impact of natural resources exploitation, a heterogeneous set of new legal frameworks for the Oil and Gas sector has proliferated at international level. The first purpose of this research is to identify the critical factors that might affect the type of local content policy designed by the regulator. In particular, it was hypothesized that the country economic system and the level of maturity of the Petroleum industry might have an impact on the design of the local content policy. The study was conducted on a sample of ten resource-rich developing African countries: Algeria, Angola, Egypt, Ghana, Kenya, Liberia, Mozambique, Nigeria, Tanzania, Uganda. It emerges that countries with a more developed local economic ecosystem and higher Oil and Gas sector maturity tend to implement mandatory Local Content Policies, with strict targets and objectives, while countries that do not offer competitive conditions in the domestic business environment adopt a softer legislation, focused on voluntary agreements and shared value creation. In addition, it has been investigated the integration and centrality of the Hydrocarbon sector within local business environment, in order to understand whether in countries, where Petroleum constitutes the main resource, it can be the engine of a socio-economic growth, able to drive economy diversification and development. 10 It was figured out that in countries, where the Oil and Gas sector is more mature, it is associated with a competitive industrial basis, relevant linkages with the downstream supply chain and good employment percentages and it could play a key role for the growth of electrification rate and reduction of imports of energy and related raw materials and semi-finished products, making the energy self-sufficiency a realistic objective to pursue. At the opposite, countries where activities in the Oil and Gas sector have started less recently have achieved less remarkable results. However, the general low level of sophistication of the country ecosystem suggests that the role of guidance of the economic growth is difficult to play for sectors different from Oil and Gas. Therefore, the analysis of some African resource-rich developing countries suggests that the Petroleum industry is not necessary giving rise to an enclave economy, since it can contribute to the development of country economic system, even if time is needed before to observe tangible effects.
Il settore Oil and Gas può avere un impatto positivo sulla crescita socio-economica dei paesi in via di sviluppo. Tuttavia, la connessione fra le attività Oil and Gas e la crescita economica non è scontata come potrebbe sembrare: infatti il settore Oil and Gas può guidare il miglioramento delle condizioni di vita delle comunità che vivono vicino alle aree di produzione, ma alcune criticità potrebbero emergere durante lo sfruttamento di risorse naturali ed i governi potrebbero non essere in grado di sfruttare esternalità positive, volte a raggiungere il livello di sviluppo desiderato. Il settore Oil and Gas è tradizionalmente accusato di dare origine ad un’enclave economy, disconnesso dall’economia locale ed incapace di generare sviluppo economico-sociale: la sua natura chiusa può impedire la creazione di relazioni con i settori locali, in quanto soprattutto nei paesi in via di sviluppo, le aziende multinazionali possono utilizzare i propri equipaggiamenti, tecnologie e personale per svolgere le attività. Con il fine di accrescere i benefici per le comunità locali attraverso l’impatto socio-economico legato allo sfruttamento di risorse naturali, un insieme eterogeneo di regolamentazioni per il settore Oil and Gas è emerso a livello internazionale. Il primo obiettivo di questa ricerca è l’identificazione dei fattori critici che potrebbero influenzare il tipo di politica di local content stabilita dal legislatore. In particolar modo è stato ipotizzato che il livello di sviluppo del sistema economico locale ed il grado di maturità del settore Oil and Gas possono avere un impatto rilevante sul tipo di politica implementata nel settore Oil and Gas. Lo studio è stato condotto su un campione di 10 nazioni africane in via di sviluppo ricche di risorse naturali: Algeria, Angola, Egitto, Ghana, Kenya, Liberia, Mozambico, Nigeria, Tanzania e Uganda. Dall’analisi emerge che paesi con un ecosistema economico maggiormente sviluppato ed un settore Oil and Gas più maturo tendono ad implementare regolamentazioni stringenti, che impongono obiettivi rigidi ed obbligatori, mentre paesi che non offrono condizioni di lavoro competitive nel sistema economico locale adottano una regolamentazione più flessibile, basata su accordi volontari per la creazione di valore condiviso fra multinazionali e comunità locali. Inoltre, è stata investigata l’integrazione e la centralità del settore Oil and Gas all’interno dell’economia locale, in modo da capire se, in paesi dove gli idrocarburi costituiscono la principale risorsa naturale, il settore Oil and Gas può rappresentare il motore di una crescita socio-economica, capace di guidare sviluppo e diversificazione economica. E’ stato scoperto che in paesi, dove il settore Oil and Gas è più maturo, tale settore è associato ad un tessuto industriale competitivo, a relazioni rilevanti con la supply chain a valle ed a buone percentuali di 12 occupazione e può avere un ruolo chiave per la crescita dei tassi di elettrificazione e per la riduzione dell’importazione di energia e relative materie prime e semi lavorati, rendendo l’autosufficienza energetica un obiettivo realistico da perseguire. Al contrario, paesi dove le attività nel settore Oil and Gas sono state attivate più recentemente hanno raggiunto risultati meno rilevanti. Comunque, il generale moderato livello di sviluppo dell’ecosistema economico locale suggerisce che il ruolo di guida per la crescita dell’economia locale è difficile da rappresentare per settori diversi dall’Oil and Gas. Dunque, l’analisi del campione di paesi africani ricchi di risorse ed in via di sviluppo mostra che il settore Oil and Gas non sta dando necessariamente origine ad una enclave economy, in quanto può contribuire allo sviluppo del sistema economico locale, anche se occorre tempo prima di poter osservare effetti tangibili rilevanti.
Local content policy contribution to socio-economic development : the case of oil and gas industry in Africa
SCOTTI, FRANCESCO
2018/2019
Abstract
The Oil and Gas sector could have a positive impact on the socio-economic growth of developing countries. However, the connection between oil and gas operations and economic growth is not obvious as it might seem: indeed, the extractive sector can drive the improvement of living conditions of communities close to the producing areas, but some criticalities might emerge during the exploitation of natural resources and governments might fail in leveraging on positive externalities, aimed at achieving the desired level of development. Oil and Gas is traditionally accused to give rise to an enclave economy, disconnected from local business and unable to generate socio-economic development: its self-contained nature may prevent the establishment of linkages with domestic sectors, because especially in developing countries, multinational companies could bring their own equipment, technologies and personnel to carry out their operations. In order to raise gains and better advantage local communities for the socio-economic impact of natural resources exploitation, a heterogeneous set of new legal frameworks for the Oil and Gas sector has proliferated at international level. The first purpose of this research is to identify the critical factors that might affect the type of local content policy designed by the regulator. In particular, it was hypothesized that the country economic system and the level of maturity of the Petroleum industry might have an impact on the design of the local content policy. The study was conducted on a sample of ten resource-rich developing African countries: Algeria, Angola, Egypt, Ghana, Kenya, Liberia, Mozambique, Nigeria, Tanzania, Uganda. It emerges that countries with a more developed local economic ecosystem and higher Oil and Gas sector maturity tend to implement mandatory Local Content Policies, with strict targets and objectives, while countries that do not offer competitive conditions in the domestic business environment adopt a softer legislation, focused on voluntary agreements and shared value creation. In addition, it has been investigated the integration and centrality of the Hydrocarbon sector within local business environment, in order to understand whether in countries, where Petroleum constitutes the main resource, it can be the engine of a socio-economic growth, able to drive economy diversification and development. 10 It was figured out that in countries, where the Oil and Gas sector is more mature, it is associated with a competitive industrial basis, relevant linkages with the downstream supply chain and good employment percentages and it could play a key role for the growth of electrification rate and reduction of imports of energy and related raw materials and semi-finished products, making the energy self-sufficiency a realistic objective to pursue. At the opposite, countries where activities in the Oil and Gas sector have started less recently have achieved less remarkable results. However, the general low level of sophistication of the country ecosystem suggests that the role of guidance of the economic growth is difficult to play for sectors different from Oil and Gas. Therefore, the analysis of some African resource-rich developing countries suggests that the Petroleum industry is not necessary giving rise to an enclave economy, since it can contribute to the development of country economic system, even if time is needed before to observe tangible effects.| File | Dimensione | Formato | |
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https://hdl.handle.net/10589/148574