Overview

Envisioning an energy driven future, Petroleum exploration efforts undertaken thus far by Sri Lanka have resulted in the slow emergence of a new industry at national level, while gradually enabling the nation to consolidate a firm footage within the international energy arena. With the primary aim of achieving diverse, sustainable sector- specific development, local content development has played a vital role in the overall sphere of Petroleum exploratory drilling and development operations carried out by Sri Lanka, as a national venture in partnership with identified international operators. The impactful outcome derived from all such local content development initiatives entail a host of direct gains as well as favorable externalities simply defined as external benefits. These gains and benefits are often distributed and concentrated in the areas of fiscal or economic rejuvenation and capacity building linked towards employment generation at national level, sector- oriented knowledge and technology transfer, procurement of goods and services as well as growth and proliferation of enhanced research and development activity dedicated towards industry-specific chores.

Declaring the mode of delivering and deriving such gains and externalities is a mandatory requirement imposed by the present legislation governing upstream Petroleum operations undertaken by the nation. All such compliance requirements and conditions have been descriptively laid down in the Petroleum Resource Agreement (PRA) and local content guidelines issued from time to time. Furthermore, a well defined monitoring and reporting strategy has also been formulated for the enforcement of all such guidelines at successive stages of the operations-in-progress.

Provided below are the areas of improvement and progress required by way of local content development

• Fiscal gains entailing State Participation in such local ventures, receipt of Royalty, Profit Share, Taxes, Bonuses, Other Levies , Fees and Annual Contributions.
• Minimal recruitment of Sri Lankan employees, who may be deployed globally to acquire experience with the primary aim of replacing expatriates.
• Maximum recruitment of Sri Lankan nationals to carry out national operations and tasks Local capacity building along the channels of education and technology directed towards knowledge enhancement and expertise development, in order to raise the level of intellect and competence of the local workforce, which may eventually allow such individuals to work on par with the well trained and experienced global workforce.
• Engagement of more Sri Lankan professionals and companies in sector-specific joint research and development programmes and studies.
• Facilitation of domestic industry growth and expansion by encouraging the purchase and usage of goods manufactured and supplied locally.
• Prioritising the services of local service providers, as the most preferred channel of service generation to be incorporated in all sector related tasks.
• Enhancing and improving the living standards and livelihood of needy Sri Lankan communities by carrying out meaningful CSR programmes.
• Encouraging collaborative initiatives for investment generation within Sri Lanka mainly by necessitating the establishment of partnership based work programmes.

At the inception, every contractor identified as an eligible partner prepared for investing in local off-shore Petroleum exploration operations and projects, should submit a comprehensive Local Content Development (LCD) plan outlining the favorable outcome of benefits associated with education, training as well as other categories, which the nation at large may eventually be able to derive during various stages of the undertaken operations. However, in compliance with such targets set at the outset, the contractor should subsequently submit a report containing all accomplished benefits to Sri Lanka.