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Local Content Should Not Reduce Competitiveness or Foster Cost Increases

By Paulino Jerónimo

LUANDA, ANGOLA-October 20 is a date of particular relevance for the ANPG, as it was on this day that, in 2020, the Angolan National Concessionaire, through the publication of Presidential Decree 271/20 , was given specific responsibilities for the operationalization of local content in the Oil& Gas Industry.

Top on the assignment was the development and publication of annual lists of goods and services under exclusivity and preference regimes, the registration and certification of Angolan suppliers, the monitoring and inspection of the contracting processes in the sector, the consolidation of the of National Local Content and monitoring the implementation of the Human Resources Development Plan together with MIREMPET.

Here, what results do we have to present in this matter?

The ANPG started by meeting with the government institutions involved in the process – the Ministry of Mineral Resources, Oil and Gas (MIREMPET) and the Ministry of Economy and Planning (MEP) – and with the associations representing suppliers in Angola, namely with the Association of Contracted Companies of the Oil Industry of Angola (AECIPA), the Association of Indigenous Companies for the Oil Industry of Angola (ASSEA), the Association of Exploration and Production Companies of Angola (ACEPA) and the Competition Regulatory Authority (ARC).

 

The work carried out together resulted, on October 18, 2021, in the publication of the lists of goods and services in the exclusivity and preference regimes on the ANPG website and in Jornal de Angola.

On the same day, the registration and certification process for suppliers came into force through the launch of the platform for this purpose on the ANPG website.

One year after its entry into force, we have 786 companies registered on the ANPG platform and around 322 companies certified in various sectors of the national economy. It’s already working!

We have also set up and operated the ANPG’s Local Content Centre with the aim of guaranteeing the continuity of the operationalization activities of the new local content regime and of coordinating all activities for the creation and implementation of the future Local Content Office. of the National Concessionaire.

The new local content framework must be competitive and must develop the necessary quality among companies. Local content should not reduce competitiveness or increase costs in the industry. This would send the wrong message to investors and could impact the overall objective of ensuring sustainable production.
Our approach was to create three contracting regimes: exclusivity, preference and free competition. The least complex work to be done in the industry was reserved for exclusivity because that work can be carried out by local companies, and they are already doing it.
For the preferential regime, if the service or goods are provided in the country, preference shall be given to the local provider if the cost is within a certain range. If local companies are much more expensive than international ones, it is possible to acquire the goods or services from international companies. The idea here is to generate joint ventures in which international companies bring knowledge and investment to local partners. Our expectation is to update these goods and services lists annually if we need to.
Our expectation also is that this process generates real local companies that can do more complex work, and then we can migrate goods and services to the exclusivity regime.
Sometimes there is a misinterpretation of our procedures. Local companies need to first register on the ANPG website, then present the required documentation. The ANPG and representatives of operators will then visit these companies’ installations to check whether they are up to the standards we require before providing the approval and certification to enable them work in the industry.

In the meantime, with the express support of the Ministry of Mineral Resources, Oil and Gas, we held two workshops in Angola on local content, in which the most relevant national representatives of the oil industry were present and we presented our strategy for operationalizing the theme.

In other words, in these two years we followed up on the functions assigned to us and worked to present results. Above all, to create conditions that allow national companies and entrepreneurs to be one of the most active voices in the development of the Angolan oil sector.

And it is in this way that we promise to continue, supporting, stimulating, contributing so that we all work together more and better for the economic and social development of our country!

Count on us. We count on the commitment of all of you!

Paulino Jerónimo

Chairman of the Board of Directors of the National Agency for Petroleum, Gas and Biofuels

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