Local content policy:A boosts to Nigeria economy

Local content policy:A boosts  to Nigeria economy

Ugo Amadi

Energy experts  has lauded the local content policy revealing that the  Emergence of indigenous oil companies in the upstream sector of the oil and gas has  created more investment opportunities to the Nigerian economy

The experts who took turn to make their presentations at  Energy Institute (EI)Nigeria ),  organized  Nigerian Producers Forum In collaboration with UK Trade and Investment (UKTI) and supported by the Department of Petroleum Resources (DPR)  spoke on  the theme “Growing Nigeria’s Indigenous Producers: Future Investment in Oil & Gas”

Speaking  on the topic Upstream Oil Production –Indigenous Operators Impact on the Domestic Growth of the Economy, Mr Vincent Nwani, Director of Research and Advocacy noted that Nigerian companies in the oil and gas upstream sector are on the rise, taking on prodigious challenges and overcoming them.

According to him For more than five decades , the IOCs(Royal Dutch Shell Plc,

ExxonMobil Corporation, Chevron Corporation, Total SA and Eni SpA) pumped about 97 percent of Nigeria’s oil output.

Stressing  that before now  the upstream have been the exclusive preserve of foreign companies, who dominated the upstream areas for long .

He emphasized that the local content policy  made  way for indigenous Nigerian companies ,thus Nigerian companies are  becoming more assertive, more ambitious and more resilient.

He said that what happened in the oil and gas sector , is now taking toll in the power sector which has seen indigenous companies in partnerships with foreign companies.

Nwani said  that more than that, the opportunities the local content law has opened Nigerian companies to are unparalleled  opportunities and that Indigenous Operators Can only Get Better

Over the last few years, company like Shell has sold its interest in four oil blocks to indigenous companies.Many Nigerian companies have become owners of upstream assets and this has in turn led to the engagement of indigenous contractors.

Nigerian companies are now handling lucrative pipeline construction projects.Since IOCs started divesting from some oil blocks (mostly onshore) and marginal fields, Nigerian companies have put on impressive abilities to raise capital and form alliances with foreign technical partners in the acquisition of these oil assets

However this had had great Impact of Domestic Impact on the Economy as new

Investment opportunities are pumping up, Wealth and Job Creation are increasing day by day

As a matter of fact Over $200 billion worth of procurements and nearly $10 billion worth of research and development (R&D) used to be sourced from North America and Technical services valued at nearly $80 billion and $39 billion worth of engineering works used to be done in Europe are being handled by indigenous companies,

In fact Thousands of  jobs in manufacturing, engineering, sciences and technical services are being created, Rapid knowledge diffusion (technology transfer) is on going and Exchange Rate is getting  Stable ,he noted.

He prised the hope and confidence boost

Of the Emerging Domestic Players like SEPLAT,South Atlantic Petroleum (SAPETRO),AfrenPLC,Midwestern Oil and Gas Company,NecondeEnergy Limited,Sahara Group,Shoreline Natural Resources,TaleverasGroup,Oando,Spectra Energy Services Limited (SESL) and

.Other Operators.

He concluded that Divestment by oil majors has given indigenous and small players the opportunity to take charge of  the nation’s oil sector. These divestments represent the single largest opportunity for indigenous Nigerian firms with the requisite expertise, partnerships and capital to ascend into the league of major upstream players.

If indigenous operators overcome the above policy and operational difficulties, they will become increasingly instrumental to Nigeria meeting its output target of 3-4million barrels a day by 2020.

Speaking on pioneering Marginal field production in Nigeria  the Managing Director of  Platform Petroleum,  Mr Emmanuel O. Konyebagu  shared  their experience, stressing  that it was not pretty easy but they were able to win their first marginal field with a local partner Nucros.

According to him, they have built a gas processing plant, have a sister company seplat and other things because of their excellent and professional way of doing things.

He noted that their staff  are highly trained to compete on any international standard and they are a value creating company, thus it pays their royalties and tax to the government and the community.

He noted that  government gives license to companies while host communities gives the power to operate and to overcome the challenges posed by the host communities , they adopted a win- win situation, whereby they have built roads, bridges, hospital and dedicated funds to help host communities.

He noted that today Platform is doing 2000bpd and hope to increase in the future.

He noted the following as challenges facing them, ability to access good funding, credit facility, ,community challenges and multiple taxation from the government.

In her own remarks the Trade Specialist for Oil and Gas – UK Trade & Investment, Sue Whitbread expressed hope on the indigenous oil companies in  Nigeria.

She informed that local companies can explore UK export finance which is available for all the countries where they operate.

She promised that UK Trade  and Investment is ever ready to guarantee equipment supply to veritable indigenous oil companies. Stressing that UK is ready to fund a lot of business in Nigeria because Nigeria is a good place for doing business