Enhancing Operational Business Decision Making by Better Understanding Gcc's Oil and Gas Energy Sector Local Content Programs
Authors: Zainaddin Ibrahim 
Published: February 2022

Operational business decisions have become more difficult due to the rapid increase in local content programs in the Arab Gulf states. Many companies operate in more than one Gulf country, and therefore, they became committed to many various local content programs. This due to the various obligations to the requirements of these programs.

In general, these programs are issued by the local governments. However, a good number of these programs are issued by parastatal and private sector companies as well.

These programs contain various requirements. This includes the use of locally made goods and services, local manpower, transfer of foreign technology, establishing research and development centers, and on. To reach the desired goals, companies must spend the largest amount of costs locally.

These programs require the interaction of many departments in the companies such as HR, Training, payroll, and procurement. As a result, many companies had established special administrative units to monitor the performance of the local level process.

The performance of companies is measured by different and often complicated formulas. The goal is to reach the highest local percentage in the final product.

The GCC supply chain localization programs are made to support and drive growth, development, and income diversification for the GCC countries. They have critical impact on GCC business environments due to their supply chain and other legal requirements. Any business decisions need to address the requirements of these programs as local supply chain activities and systems need to fill any expected gaps as mandated by these programs. Investment attractiveness is highly impacted by the rules and regulation imposed by these programs. The legal implications are of very high concern to business leaders as well. Hence, organizations need to take high care and pay great attention to the requirements of these programs.

As there is not enough research available about this subject in the industry and academia, this paper was created with the intention to discuss and analyze the different GCC supply chain localization programs and their impact on supply chain decisions. The paper should help leaders to take informed decisions in the GCC market they operate as these programs are evolving at very fast paste.

A review of the programs across GCC countries will be presented. These supply chain localization programs cover both the government and private sectors. Programs basics, models, incentive, and achievements will be shown.

These programs have some similar concepts and models, but they differ in some other respects. Hence, a comparison will be made across these different programs for similarities and differences. The structures for the government and private sector's programs are somehow complex and require interactions of many areas such as human resources, supply chain, training and development, and research initiatives. The paper will use publicly available resources and market intelligence tools to gain in-depth details for each program as there are not much scientific researches in the industry about this topic.

To facilitate the business environment for companies, It is necessary for the governments in the same country and at the level of the Gulf state to unify these different programs Adherence to these programs should not be a hindrance to the current and future investment environment. Companies must be prepared to address the different and possibly newly created requirements as local content programs are getting of a very high attention by all GCC countries.