local content success strategies: ghana petroleum summit, april 2015

Four Strategies for

Local Content Success

Wayne Dunn Professor of Practice in CSR (McGill)President & FounderCSR Training Instituteinfo@csrtraininginstitute.comwww.csrtraininginstitute.com

Ghana Oil & Gas SummitWednesday April 22, 2015

Accra, Ghana

mailto:[email protected]

http://www.csrtraininginstitute.com/

Ghana Oil & Gas Summit | Accra, Ghana | April 2015

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Presentation Objective & Outline

• Global perspective on local content pressures

• Local content challenges

• Local content strategies

• Resource Materials

• Discussion


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2015 is not an easy time for the petroleum industry

• Bottom of the cycle

• High costs

• Low prices

• Increasing social demands

• Increasing environmental requirements

• Global legacy issues

• Expanding regulatory requirements

• Expanding compliance requirements & expectations

• How to meet social, environmental & shareholder expectations

Need to innovate

Need to collaborate


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Social value imperativeapplies across industry, sector & geography


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Local Demands/Involvement Growing Social Demands

1. Consultation(formal/informal, history, structure, FPIC, closure)

2. Access to land (who/how approved)

3. Benefit sharing (what’s in it for everyone)

4. Project approval (who approves? when? how?)

5. Environmental monitoring


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Local Content Challenges

• Remote locations with little or no experience with industrial employment

• Limited infrastructure to provide training and support to assist potential workers with the transition to industrial employment.

• Limited technical skills and business management skills (employees & suppliers).


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Local Content Challenges (continued)

• Unrealistic expectations (government and communities)

• Low literacy and household economies are often subsistence based.

• Hard to make the right hires. Overwhelming response to employment opportunities.

• Programs to facilitate local content development are under-resourced and focus on short-term impacts rather than the structural issues that can create sustainable longer term impacts.


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Local Content Challenges (continued)

• There are no economic vehicles in the local economy that can enable effective participation in the larger contracts and opportunities. • Locally owned businesses lack the financial, operational and

management capacity to compete for larger contracts, even with extensive support and assistance from the project/company.

• The bulk of the overall value of contracts for goods and services cannot be broken down to a size that can be digested by local businesses and entrepreneurs.

• This means that by default the local economy is effectively prohibited from participating in the lion’s share of opportunities other than as sub-contractors.


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Local Content Strategies

1. Think Cap Ex when budgeting• Life of project benefits


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Local Content Strategies (continued)

2. Pre-employment training• Basic skills/orientation to

industry and industrial employment

• Qualified & pre-screened pool for hiring


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3. Invest in education & training institutions• Local training infrastructure

is critical

• Government needs to have capacity to collaborate (may take training)


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4. Development Corporations• Vehicle & strategy to match

capacity to opportunity

• Enable professional management and broad participation


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Development Corporation Example

Kitsaki Development Corporation

• Northern Resource Trucking Limited Partnership (trucking and transportation)

• The La Ronge Motor Hotel Limited (Hospitality and accommodation)

• Kitsaki Meats Limited Partnership (specialty food products)

• La Ronge Industries Ltd. (agriculture production

• First Nations Insurance Services Ltd. (insurance and financial services)

• Athabasca Catering Limited Partnership (catering and hospitality)

• Dakota Winds Kitsaki Mechanical Services Ltd. (plumbing, heating, refrigeration, and mechanical services)

• Wapawekka Lumber Limited Partnership (timber and forestry)

• Keewatin/Procon Joint Venture (contract mining, surface and underground)


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Some Resource Material• Four Strategies for Local Content

Success

• Cameco Case Study

• Kitsaki Development Corporation Case Study

Email [email protected]

if you want copies



four strategies for


Presentation Objective & Outline

• Global perspective on local content pressures

• Local content challenges

• Local content strategies

• Resource Materials

• Discussion


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Discussion, Questions, Debate…

Wayne Dunn Professor of Practice in CSR (McGill)President & FounderCSR Training Instituteinfo@csrtraininginstitute.comwww.csrtraininginstitute.comCanada: +1.250.701.6088Ghana: +233.54.110.7974


http://www.csrtraininginstitute.com/

local content success strategies: ghana petroleum summit, april 2015

Business

ghana oil gas summitwednesday

local content development

local economy

local businesses

employment opportunities

larger contracts

overall value of contracts

structural issues