Local content policies are increasingly used by oil-producing nations to ensure that petroleum extraction generates long-term economic benefits for local populations. These policies typically require international oil companies to prioritize hiring national workers, sourcing goods and services from local firms and investing in training and knowledge transfer.
Some countries also mandate a minimum equity stake for national entities or individuals. The aim is to move beyond mere revenue collection and foster domestic industrial capacity, reduce dependency on foreign expertise and stimulate broader economic development.
Globally, these policies vary widely in structure, stringency and effectiveness. Here’s a comparative look at how different countries have approached local content, highlighting both their legal frameworks and real-world implementation outcomes.
Norway
Norway built a strong local supply chain by investing in research, infrastructure, and education. International firms had to work with Norwegian suppliers and join local innovation networks, helping create a world-class offshore services sector.
Brazil
Brazil enforces strict local content rules, requiring 35% to 67% local involvement in offshore projects. The National Agency of Petroleum and Petrobras oversee compliance, ensuring strong participation from domestic industry.
Trinidad and Tobago
In Trinidad and Tobago, local content is promoted through policy rather than law. The Energy Chamber’s Local Content Charter, signed by major operators, encourages hiring local workers and sourcing from domestic suppliers, but sets no mandatory targets. Implementation varies by project; for example, BPTT’s Galeota Expansion used over 90% local labor and 60% local suppliers.
Mexico
Mexico reformed its oil sector in 2013, introducing local content rules monitored by the National Hydrocarbons Commission. Early contracts require at least 25% local procurement, rising to 35% for development by 2025. Companies must also submit employment and training plans, and PEMEX retains a minority stake in key projects.
Venezuela
In Venezuela, local content policy is tied to state ownership. The national oil company, PDVSA, oversees operations and enforces high local procurement and hiring, with labor laws requiring at least 90% Venezuelan workforce. Most projects are state-run or joint ventures controlled by PDVSA.
Colombia
Colombia’s local content policy is part of its licensing system, overseen by the National Hydrocarbons Agency (ANH). While there are no set quotas, companies must submit local procurement and hiring plans, with contracts evaluated partly on commitments to local socio-economic benefits.
Guyana
Guyana’s Local Content Act (2021) requires oil companies to prioritize Guyanese-owned businesses and nationals in over 40 goods and services categories, mandating local ownership of at least 51%. Since 2015, over US$1.5 billion has been spent with Guyanese suppliers, supporting 6,000 jobs. Challenges include limited financing, skills gaps, and developing local institutions.
Suriname
Suriname does not have a formal local content law, but the topic is under active discussion. The 1990 Petroleum Law takes an encouraging rather than mandatory approach, guiding state enterprises to promote efficient exploration, technology transfer, local training, and environmental protection when engaging with third parties.
As the country prepares for first oil in mid-2028, efforts to integrate local businesses and workers are gaining momentum. Currently, local content is managed through production-sharing contracts, with Staatsolie, the state-owned oil company, playing a central role in enforcement. Foreign companies are expected to use local goods and services if they are available at internationally competitive standards.
