An Exploration of Ugandan Local Content Adoption and Development in a New Oil and Gas Operating Environment

Fox, James (2021). An Exploration of Ugandan Local Content Adoption and Development in a New Oil and Gas Operating Environment. PhD thesis The Open University.

DOI: https://doi.org/10.21954/ou.ro.00013d44

Abstract

This study investigates the adoption and development of local content in Uganda’s oil industry. The focus is the impact of lower oil prices on evolving stakeholder commitments and involvement in developing local competencies and, in turn, their impact on the in-dustry’s adoption of local content. In investigating movements and trends towards a more localised oil industry, this research assesses the three criteria of employment, procure-ment and local content development.

This study is designed around the notion that there are multiple stakeholders who, to varying degrees, play a role in the development of local content. Stakeholders include, but are not limited to, the Government of Uganda, operating companies, donor agencies and international oilfield service companies. Acknowledging that not all of the aforemen-tioned stakeholders employ or procure from the local value chain, this research analyses trends and motivations of stakeholders to understand their role in local content adoption and development.

The findings of this research reveal that the collapse in the oil price between 2014-2016 engendered incremental movements towards a more localised oil industry as operators increasingly employ and contract Ugandan labour and suppliers. In the period since 2014, we can also observe that a growing number of stakeholder interventions, notably from international donors, has created ‘pockets of effectiveness’ in education and train-ing, which, in turn are playing a major role in delivering requisite skills for the next stage in Uganda’s oil and gas project lifecycle. The study finds that Ugandan state interven-tions have been limited in their effectiveness, undermined by an underfunded and ill-functioning bureaucracy and a neglected education system. Resultantly, non-indigenous stakeholders have been integral to the development and adoption of local content in Uganda.