The paper considers public policy interventions in the petroleum sector as leverage to further develop and diversify a country’s economy. Specifically, it addresses rules and principles formulated in relation to areas such as employment and the procurement of goods and services that are commonly referred to as local content (LC) requirements in the petroleum sector. These requirements are now among the main challenges facing both companies working within and the governments of natural resource-rich countries, not withstanding the fact that their application has resulted to mixed outcomes. Significantly, the general lack of consideration by governments and international institutions over, pertinent issues such as energy economics and market realities that often exerts a strong influence on interventions to the point that unintended (and often negative) consequences is alarming. Thus, this article argues that although LC, as a form of government intervention, is premised on spill-over effects, it needs to be implemented within the realm of the law of unintended consequences. Thus, governments need to separate those issues that they are realistically able to resolve from those that they cannot by incorporating credible LC requirements. Therefore, this article concludes that  ignore the ‘diagnostic model’, which involves the extreme difficulty associated with ensuring efficient policies have actual spill-over effects. Governments embrace short-term rather than long-term remedies to problems and continue to ignore previous experiences of, and detriment caused by, LC requirements, especially when the rules in question are not responsive to an enclave industry such as petroleum.