Local content implementation strategy for Kenya’s oil and gas industry: an evaluation of Sections 50, 51 and 52 of the Petroleum Act 2019

Abstract

Kenya has realised the need to promote local content in its oil and gas industry hence the reason why the concept of local content has been legislated through sections 50, 51 and 52 of the recently enacted Petroleum Act 2019. This study explores the 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 analyses key drivers of local content within Kenya’s legislative framework and examines factors that impede successful implementation of local content in Kenya’s oil and gas industry. The study evaluates the adequacy of the local content provisions under the Petroleum Act to establish whether the requirements meet international best practices. As a yardstick, the research underscores the presence of local content within Nigeria’s oil and gas framework and examines the mechanisms in place to measure and monitor implementation in order to identify factors that explain the achievement of positive local content outcomes in Africa’s best case study on local content in the oil and gas industry. In particular, the study analyses the legal and institutional framework that promotes local content in Nigeria in order to draw lessons for implementation in Kenya. The study finds that Nigeria’s local content requirements in law are well structured and very specific on the in-country needs and this has resulted to positive local content outcomes. This specificity in law has positively shaped local content in Nigeria’s oil and gas industry and, if Kenya can draw lessons from Nigeria’s framework, it will most likely achieve positive local content outcomes in the oil and gas industry. This study was conducted through analysis of primary and secondary data such as statutes, books, scholarly articles, journals and reports. This study hopes to inform the government of Kenya and policy makers on how best to implement these local content frameworks in order for the country and the citizens of Kenya to maximize on the benefits of the oil and gas sector.