Nigerian Firms to Benefit from $18bn Oil Business

Federal Government yesterday set the ball rolling for the commencement of the implementation of the Nigerian Content Act for the oil and gas industry by appointing an executive secretary to drive the activities of the body.
The kick-start of operations of the Nigerian Content Regulatory Board came on the heels of a major concern expressed by the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke regarding the spending of the  over $18 billion annual budget on  imported goods and services used in the oil and gas industry.

Diezani who, along with the Group General Managing Director of the Nigerian Natio-nal Petroleum Corporation (NNPC), Mallam Shehu Ladan, the Senate Committee Chair-man on Petroleum Upstream, Mr. Leo Meaba, unveiled the document containing the Nigerian Content Act at the event, described the law as a major milestone capable of crystalising development in the country.
"As I unveil this Act, the regulation to set up the new implementation framework will kick in.  A Nigerian content development and monitoring board will be immediately created which will be responsible for the Nigerian content regulation and superintend over all Nigeria content activity," she said.

The Nigerian Content  Act sets out specific work scopes that must be performed in Nigeria, guarantees fair access to foreign companies who want to do business in Nigeria, provides privileges for indigenous companies, creates opportunities for indigenes employment and training and empowers the Minister of Petroleum Resources as Chairman of Governing Council to make regulations affecting the implementation of the Act.

The Minister  said in keeping with government's determination to  give vent to  quick implementation of the Nigeria Content law,  it has approved the  appointment of  the former Group General Manager of Nigerian Content Division of NNPC, Mr. Ernest Nwapa, as the Acting Executive Secretary of the NCDMB.
Under the provisions of the Act, the Minister of Petroleum Resources is to serve as the Chairman of the governing council to make regulations affecting the implementation of the Act.

Diezani, while lamenting the shortcomings of the oil sector,  said it is pathetic that  the Nigerian oil and gas industry that spends an average of $18 billion on annual basis, had over 90 per cent of all the goods and services used in the  sector imported from overseas.
"Government continues to plough in enormous resources into the industry, unfortunately, the impact on the wellbeing of our people from oil industry activities is still not at par with international benchmarks and well below the target of 70 per cent  set by government," she said.
She also  said the success of the local content legislation will require the establishment of some critical facilities that would support the operations of indigenous operators, adding that the law would provide a major opportunity for investment by Nigerian and international investors which will benefit from the commercial attractions associated with the Act.

"As a nation blessed with vast natural resources, a population of over 150 million and persistent to succeed, the Nigerian Content Act will certainly create employment for our teeming youths in the Niger Delta as well as other parts of the country.
"It will set the template for expanding the concept of local content into other sectors of the economy," she said.
The NNPC GMD said the genesis of the efforts to create a Nigerian content regime in the oil and gas sector could be traced the period, five years ago, when the then President Olusegun Obasanjo mandated the corporation to domicile significant portion of oil and gas derivative and increase contribution of the sector to the national Gross Domestic Product (GDP).

Ladan assured that NNPC will take the lead in the effort to ensure strict compliance with the provisions of the Act and would focus action on integrating the provisions into its business and operational strategy.