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An appraisal of local content requirements in the Iranian oil and gas industry

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  • Jahromi, Farideh Shabani

Abstract

Leading countries in the petroleum industry strive to maximize their benefits from exploring, developing, and producing oil and gas by setting out various policies and requirements such as local content. Iran, like many other oil and gas-producing countries, has legal and contractual local content requirements. However, the lack of transparent and integrated regulatory and contractual frameworks and fixed threshold applied for all types and life cycle of fields and operations are considered as concerns and challenges of local content policies in Iran. Determining metrics to measure local content is another issue that is not clarified as required in legal and contractual requirements. Establishing a constructive local content policy in Iran requires the active integration of factors such as actual improvements in local service or product and labor productivity. Transparent legislative and regulatory frameworks, robust performance planning, monitoring, and control mechanisms, along with precise metrics for measurement of local content, are indispensable prerequisites for realizing local content policies. The characteristics of operations and the need to implement new technologies must also be considered to design an appropriate policy. Moreover, the development of integrated approaches and congruent laws and regulations could facilitate and accelerate the achievement of development goals.

Suggested Citation

  • Jahromi, Farideh Shabani, 2021. "An appraisal of local content requirements in the Iranian oil and gas industry," Resources Policy, Elsevier, vol. 73(C).
    • Handle: RePEc:eee:jrpoli:v:73:y:2021:i:c:s0301420721001653
    DOI: 10.1016/j.resourpol.2021.102151
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    References listed on IDEAS

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    1. Silvana Tordo & Michael Warner & Osmel E. Manzano & Yahya Anouti, 2013. "Local Content in the Oil and Gas Sector," World Bank Publications - Books, The World Bank Group, number 15930, August.
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    1. Gbadago, Frank Yao & Enu-Kwesi, Francis & Agyei, Samuel Kwaku & Garchie, John Gatsi, 2024. "Effects of operators’ strategic approach to local content and in-country spending requirements on financial performance of upstream petroleum sector firms, Ghana," Resources Policy, Elsevier, vol. 93(C).
    2. Frank Yao Gbadago, 2025. "Analyzing local content and in-country spending requirements to advance technology transfers and support entrepreneurial development in Ghana’s upstream petroleum sector," Palgrave Communications, Palgrave Macmillan, vol. 12(1), pages 1-16, December.
    3. Simplice A. Asongu & Gerald Emmanuel Arhin & Abdul-Gafaru Abdulai & Justice Bawole, 2022. "The Political Economy of the Oil and Gas Sector in Emerging and Developing Countries," Working Papers of the African Governance and Development Institute. 22/029, African Governance and Development Institute..
    4. Hendalianpour, Ayad & Liu, Peide & Amirghodsi, Sirous & Hamzehlou, Mohammad, 2022. "Designing a System Dynamics model to simulate criteria affecting oil and gas development contracts," Resources Policy, Elsevier, vol. 78(C).

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