Essay about The Local Content Provisions Of Oil Companies

1282 Words Feb 29th, 2016 null Page
The three local content provisions above have sustainability implications, for instance, employment and training serve both the social and economic sustainability, procurement and contracts serve economic sustainability, and technology transfer serves environmental sustainability. The above analysis has therefore shown more emphasis on the social and economic sustainability. Similarly, the accounting and financial implications of the above provisions are discussed in section 3.15. The three local content provisions also attract other fiscal incentives such as favourable tax rates for IOCs that establish facilities for local manufacturing or servicing in Nigeria (S. 48 NOGICD Act). These are some of the reasons why petroleum contracts often involve accounting and reporting provisions of local content which are regulated and enforced by designated local content agencies such as the NCDMB. These accounting provisions are considered by this study as mandatory (hard) local content accountability of oil companies. Aside the mandatory provisions, oil firms also engage in voluntary (soft) reporting. These two reporting practices will be the subjects of the next chapter. But before going into that, the next section presents a few examples of the accounting and reporting provisions in petroleum contracts of selected countries.

2.10 Accounting and Reporting Provisions of Local Content in Model Petroleum Contracts It is a common practice that countries include dedicated…

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