Legal and institutional framework for implementing a hybrid approach to local content in Kenya’s petroleum sector: lessons from Norway
Mutai, Oliver Kipchumba
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Kenya has recently discovered Oil and Gas reservoirs creating an imperative to promote Local Content in its oil and gas industry. The concept of Local Content has, as a result, been legislated through the recently enacted Petroleum Act 2019. This study contemplates the existing legal and institutional framework within which the government of Kenya has introduced Local Content requirements in the oil and gas industry in order to tackle various aspects of Local Content. The study scrutinizes key drivers of Local Content within Kenya’s legislative framework and evaluates the determinants that impede successful implementation of Local Content in Kenya’s oil and gas industry. The study also examines the adequacy of the Local Content provisions under the several oil and Gas related legislations especially the petroleum Act to establish whether they meet international best practice requirements. The research uses Norway as a yardstick of an advanced oil and gas legal, institutional and regulatory framework to question the mechanisms in place to measure and monitor implementation. This is done in order to identify factors that explain the achievement of positive Local Content outcomes and gauge whether the practices and structures can be imported into Kenya through a Legal Transplant mechanism. In particular, the study analyses the legal and institutional framework that promotes Local Content in Norway in order to evaluate its applicability in Kenya. The study concludes that Norway’s Local Content requirements in law are well structured and tailored to its needs. This has resulted to positive Local Content outcomes. This study was conducted through analysis of primary and secondary data such as statutes, books, scholarly articles, journals and reports. It hopes to inform the government of Kenya and policy makers on the best approach towards the implementation of a Local Content framework in order for the country and its citizens to capitalize on the benefits of the oil and gas sector.