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I N N O V AT I O N S • V O L . V I I , N O. 2 • 2 0 1 5
Working in oil and gas means we can make a claim most
industries can’t: We have the power to move the world. I don’t mean just in the
sense of fueling transportation, even though 60 percent of the oil produced
globally is, in fact, used to transit people and products from point A to B.
What I’m referring to in this case is how our industry has become a driving
force for local economic development on every continent. This is especially true
as international oil companies (IOCs) continue to partner with and support
national oil companies (NOCs) in emerging markets.
A few years ago, the global consulting firm Accenture suggested that
localization initiatives – developing local economies, stimulating industrial
development, increasing local capability, building a skilled workforce,
and creating a competitive supplier base – would become the minimum
requirements for doing business with NOCs. In other words, IOCs would have
to look beyond the deal and do things that are good for the country.
As part of this ongoing push toward localization, IOCs are guiding NOCs
– who command nearly 80 percent of the world’s remaining oil reserves – to
expand homegrown competencies and technological expertise. As a result,
developing countries are better equipped to use their oil and gas resources to
promote economic and social progress.
Take a look at Norway’s Statoil, for example, a product of the Norwegian
government’s ambition to utilize its North Shore and continental shelf
resources. During Statoil’s early years, the government built a local energy
industry by giving first consideration on contracts to Norwegian bidders who
were competitive on key attributes like price and quality. As foreign operators
began to enter the Norwegian energy industry, they were encouraged to partner
with local companies on research and development.
Today, Norway is among the top energy exporters in the world. And Statoil
is sharing its wealth globally. The company supports training and competence
building in Brazil, Canada, Russia and Nigeria. Nigeria, in fact, is the site of
another compelling example of the benefits of localization.
The Nigerian National Petroleum Corporation (NNPC) is dedicated to
leveraging the country's energy resources to help the nation advance technically
and economically. With the help of Shell – who provided knowledge transfer,
training, and preferential bidding to Nigerian suppliers – NNPC was able to
develop its oil industry capabilities.
Obviously, localization isn’t a one-way street. By working with NOCs,
IOCs gain access to oilfields that might otherwise have been off limits. They
expand their global footprint while reducing risk and improving ROI.
In my own experience, recruiting and training a knowledgeable local
workforce has enabled T.D. Williamson to meet global customer demands with
uniform quality. Which means localization is a winning strategy, all-around.
BY JOHAN DESAEGHER
VICE PRESIDENT
EUROPE/AFRICA/MIDDLE EAST
T.D. WILLIAMSON
E X E C U T I V E O U T L O O K
Localization:
The Winning Strategy