Treacy Roberts, ExxonMobil, USA Elizabeth Wild, BP, UK

1. Developing a Local Content Strategy – Guidance Document by IPIECA Elena Oskolskaya Upstream National Content Manager ExxonMobil, USA Treacy Roberts, ExxonMobil, USA Elizabeth Wild, BP, UK Maria Bernada Zapata Martinez, Repsol, Spain Francois Breant, Total, France Vincent Bordmann, Total, France Estella Nucci, IPIECA Forum 23: Social Responsibility requirements for financing energy projects

2. Introduction Guidance Document Objective: Provide guidance on development, implementation and management of sustainable local content strategy to local content practitioners in oil and gas companies Methodology: • IPIECA Local Content Task Force began in 2007 • Initial focus on defining local content evolved to a high-level guide • Interviews were conducted with practitioners from several oil & gas companies

3. Local Content Definition: Local Content is defined as added value brought to a host nation through: • Workforce development: employment and training local workforce • Supplier development: procuring supplies and services locally and developing local supplier capacity • Rationale: • Meet local content regulatory requirements • Enhance engagement with stakeholders • Contribute to sustainable economic growth • Achieve long-term value while demonstrating social responsibility

4. Outline of Guidance Document The guidance is divided into three sections: Part 1—Introduction: drivers and objectives of an effective local content strategy Part 2—Developing capacity: detail on developing the primary components of a local content strategy, such as building local workforce and supplier capacity Part 3—Implementing and sustaining local content: key issues that practitioners can consider to ensure successful implementation of a local content strategy

5. Part 1 – Local Content Strategy Development Key drivers of successful strategy: Local context • Understand demand-side requirements, the supply-side capabilities, and any barriers that limit local participation Regulatory requirements • Address regulatory driven targets for local content development Business expectations • Identify strategic and commercial reasons for investing in local content Stakeholder expectations • Define internal and external stakeholders and their objectives

6. Part 2 – Capacity Development An effective local content program focuses on local workforce and local supplier capacity building Key approaches to workforce development: • Employment policies • Training and skill development • Investments in education • Construction phase employment Strategies to promote local supplier development: • Direct procurement of local goods and services by oil and gas companies • Indirect procurement by companies’ major contractors

7. Part 3: Implementing and Sustaining Local Content Effective internal organization and coordination are two elements successful strategies have in common Close collaboration with other stakeholders play a key role in developing an effective local content strategy • Infrastructure is crucial to sustainability of local content plans and activities • Appropriate measurement process that allows monitoring performance against objectives and encourages continuous improvements should be built in every plan

8. Summary Local content has become a strategic issue for the oil and gas industry – a comprehensive strategy is recommended to address associated opportunities and challenges Key success factors for local content strategy implementation are: • Contextual analysis • Starting early • Long-term perspective • Good communications Local content programs are worth the effort, providing strategic and commercial benefits for the company, and economic growth and sustainable development for the host nation

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