Local Content in the Hydrocarbons Sector in Africa in 2024: Assessment and Prospects (Kamel Koné)

L’année 2024 a été marquée par une volonté accrue de renforcer le contenu local dans le secteur des hydrocarbures en Afrique. Face à la nécessité de maximiser les retombées économiques de l’exploitation des ressources naturelles, les pays africains ont intensifié leurs efforts pour favoriser la participation des entreprises locales, développer les compétences nationales et créer des emplois. Le contenu local s’est affirmé comme un levier stratégique dans le secteur des hydrocarbures en Afrique, reflétant une volonté croissante des gouvernements et des opérateurs privés d’intégrer davantage les populations locales et les entreprises nationales dans cette industrie clé. Entre avancées notables, défis persistants et initiatives prometteuses, retour sur les moments marquants de l’année et projection vers 2025.

Highlights and achievements in 2024 :

Plusieurs événements et initiatives ont jalonné l’année 2024, témoignant de l’importance grandissante accordée au contenu local :

• Adoption and strengthening of Local Content laws in Côte d'Ivoire : La Côte d’Ivoire a adopté une nouvelle loi sur le contenu local dans les hydrocarbures, visant à garantir une participation accrue des entreprises locales dans les projets pétroliers et gaziers. Cette loi impose aux compagnies internationales d’intégrer davantage de fournisseurs et prestataires ivoiriens.
• First Oil at the Baleine deposit in Côte d'Ivoire: Côte d'Ivoire has celebrated the first extraction of oil from the offshore Baleine field, operated by Eni. This event represents a major step forward for the country, which is counting on this project to boost its economy and maximise local content. The start-up of the second phase of development at Baleine has doubled production and opened up new opportunities for local businesses.
• Start-up of phase 2 of the Baleine deposit : On 28 December 2024, ENI and its partner PETROCI successfully launched the production of phase 2 of Baleine, enabling production to reach around 60,000 barrels per day. This step confirms Côte d'Ivoire's ambitions to reach a production of 200,000 barrels of crude oil per day in 2028, positioning the country among the leading oil-producing countries in Africa.
• Discovery of the CALAO deposit in Côte d'Ivoire : After Baleine, the Italian giant ENI has announced a new discovery with a potential of 2.5 billion barrels of oil and 3,300 billion cubic feet of gas, a discovery that reinforces Côte d'Ivoire's ambitions in its hydrocarbon policy.
• Production starts up in Senegal:Le lancement de la production pétrolière à Sangomar et les avancées du projet gazier GTA (Greater Tortue Ahmeyim) ont mis en lumière l’importance de l’intégration des entreprises locales dans la chaîne de valeur. Le Sénégal a mis en place un cadre réglementaire incitatif pour le contenu local, encourageant les partenariats et le transfert de technologies.
• Increased investment : L’augmentation des investissements dans le secteur pétrolier et gazier africain en 2024 (+23% selon Energy Chamber) a créé des opportunités pour les entreprises locales, notamment dans les services, la logistique et la maintenance.
• In AngolaThe implementation of a technical skills enhancement programme for young people was hailed as a model of successful integration between the public sector and international operators.
• Nigeria, a historic leader in the field, continued to roll out its Nigerian Content Act, while celebrating record local integration rates in some projects, reaching as high as 54%.
• National initiatives: Several countries have strengthened their local content legislation and policies, setting quantified targets and putting in place monitoring and control mechanisms.
• Ghana: Thanks to the Petroleum (Local Content and Local Participation) Regulations, the country has seen a significant increase in the participation of local companies, particularly in the engineering and logistics sectors.
• Uganda: With the EACOP pipeline project, the country has integrated hundreds of local SMEs into the infrastructure work, creating thousands of direct and indirect jobs.
• Mozambique: Despite a complex security context, the country has seen an increase in local partnerships in the development of its offshore gas resources.
• Creation of the Future African Energy Bank: A major initiative in 2024 was the announcement of the creation of the African Energy Bank. This institution aims to facilitate the financing of energy projects on the continent, with a focus on the development of local content and the inclusion of African SMEs in the hydrocarbons sector.

These moments have reinforced the idea that local content can not only maximise the economic benefits of hydrocarbons, but also help reduce external dependency.

Country examples and good initiatives :

Some countries stand out for their advances in local content:

• Nigeria: Despite the challenges of declining production, Nigeria continues to actively promote local content through the Nigerian Oil and Gas Industry Content Development (NOGICD) Act.
• Angola: Angola has implemented an ambitious local content policy, with strict requirements for the participation of local companies in oil projects. The country also stands out for its proactive approach, combining tax incentives and skills transfer programmes.
• Senegal: With the start of production from the Sangomar oil field and future production from the GTA gas field, Senegal is implementing a strategy focused on skills development and local job creation.

Good initiatives :

• Training and skills development programmes: Numerous initiatives aim to train the local workforce in oil and gas professions, in partnership with educational institutions and international companies. Many countries, such as Algeria and Ghana, are also investing heavily in technical and vocational training for young people.
• Public-private partnerships: Collaborations between governments and oil majors, such as TotalEnergies, Woodside, Eni and BP, are multiplying to structure robust local ecosystems.
• Access to finance: Some countries, such as Angola, have set up specific funds to support local SMEs in accessing hydrocarbon markets.
• Local Content Development Fund: The creation of dedicated funds enables local businesses to be financed and supported in their development.
• Connecting platforms: Online platforms make it easier for local businesses to connect with international operators.
• Launch of the African Forum for Local Content: This annual event, held in Luanda in September, brought together policymakers, investors and experts to share best practice.

Problems and challenges in Africa :

Despite this progress, a number of challenges still stand in the way of realising the full potential of local content:

• Lack of technical and financial capacity: Local companies often lack the resources to meet the technical and financial requirements of oil and gas projects.
• Skills gap: Gaps in technical training remain a major barrier to local employment in highly specialised sectors.
• Weak infrastructure: The lack of adequate infrastructure can hamper the development of local activities.
• Limited access to finance: Local SMEs struggle to obtain the resources they need to meet the high standards of international contracts.
• Corruption and lack of transparency: Corruption and lack of transparency can hamper local companies' access to markets.
• Political and security instability: Political instability and security issues in some regions can deter investment and hinder the development of local content. Uncertainties in some countries, such as Libya and Mozambique, are holding back investment and complicating local integration.

Outlook to 2025 :

The outlook for 2025 is encouraging, with a continued commitment to strengthening local content. The priorities should be :

• Capacity building: Increase training and skills development efforts to enable local companies to move upmarket. Several countries, including Côte d'Ivoire and Mozambique, are planning to adopt new laws to further structure local content.
• Improving the regulatory framework: Putting in place clear and transparent regulations to encourage the participation of local businesses.
• Promoting partnerships: Encouraging partnerships between local and international companies to facilitate the transfer of technology and know-how.
• Digitalisation and innovation: The digital transition offers opportunities to modernise processes and increase transparency in the awarding of contracts.
• Economic diversification: Use hydrocarbon revenues to develop other economic sectors and reduce dependence on oil and gas.
• Regional integration: Increased collaboration between African countries could enable best practice to be shared and a continental vision of local content to be developed.

En conclusion, l’année 2024 a marqué une étape importante dans la promotion du contenu local dans le secteur des hydrocarbures en Afrique. Les efforts doivent se poursuivre en 2025 pour relever les défis et maximiser les retombées économiques de cette industrie pour les populations africaines. Il est crucial de transformer les ressources naturelles en un véritable levier de développement durable et inclusif.