Natural resources provide key opportunities and challenges for state economic development. Often countries with large natural resources depend on these resources and neglect the development of other potential sectors in the economy, including sectors that support their prevalent natural resources industry. Many developing countries with substantial oil and gas reserves have often depended on international players in their operations and projects, with local human resources and local private sector playing only a minor role.
Nevertheless, population growth coupled with reductions of oil prices have put a lot of pressure on developing economies to maximise local content in the oil and gas industry, and to use the industry to leverage the overall national economic development.
The Kuwait oil and gas sector, led by Kuwait Petroleum Corporation (KPC), has always been at the forefront of providing opportunities for the development of local human resources and the local private sector. More recently, KPC adopted a holistic approach in its local content 2030 strategy, and this approach is being further developed as part of KPC’s new 2040 corporate strategy.
This session will explore the challenges and opportunities of local content development in the oil and gas industry of Kuwait, covering areas like:
- Prevalent legal and regulatory regimes
- Local content maximisation measures, and the local private sector’s ability to meet the local demand of goods and services
- Employment and development of local human resources
- Overcoming the challenges of knowledge and technology transfer
- Providing financial support to start-up businesses
The challenges facing the energy industry today are numerous and complex. The roles of the NOCs and IOCs have transformed into more of a partnership as they strive to develop a sustainable business model capable of withstanding the general vagaries of the global economy and myriad associated uncertainties. Maintaining an optimal investment profile over time can be very hard when the industry is facing so many variables and often-unforeseen risks. Transparency of data and market operations interlinkages between physical and financial markets, and consistency and thoughtfulness of regulation, are all areas of growing and common concern.
The interdependent nature of the oil and gas industry, and its importance to the world economy, as well as the completion in markets, besides the need to protect the environment and to ensure HSE high standards, are all promoting an effective collaboration in the form of strategic partnerships. This can be established based on a win–win relationship focusing on various common interests, one of which is technology transfer and know-how.
International oil companies and national oil companies, alike, need to take a long-term view regarding partnerships. There is a sense that the resource owners and the companies that extract oil and gas face huge common challenges that can be solved only if they believe they are in the energy business together for the long haul. To ensure success in the long-term future of their joint ventures, IOCs and NOCs should collaborate on industry- focused education and training initiatives. Investing in the development of a new generation of geological, geophysical, and engineering talent is necessary for energy companies and partnerships seeking to extract oil and gas from ever-more challenging reservoirs in more remote locations.
This session will focus on the development of such relationships and draw a road map for the road forward.