Local content in Nigerian oil industry to hit 45 % by 2005

Nov 17, 2003 01:00 AM

Come 2005, the local content in the Nigeria's oil industry would rise to 45 %, National Petroleum Investment Management Services (NAPIMS) has assured. The present local participation in the oil industry is estimated at 18 %, after about 47 years of petroleum business in the country.
Speaking during a visit of the Federal House of Representatives Sub-committee on Upstream led by the chairman of the committee, Mr Bethel Nnaemeka Amadi in Lagos, NAPIMS Group General Manager, Mr Chris Ogiemwonyi, said the present administration is set at promoting local content development in the country.

His words: "After 47 years of operating in the oil industry, the country only has 18 % local content. We are set to boost the local content to 45 % by 2005." He urged the Committee on Upstream to enact a law that would empower NAPIMS to ensure the oil companies comply with the implementation of the local content.
"The problem actually is lack of an enabling law to ensure that the oil companies comply. If the law is made next year, we would enforce it," he stated.

The Nigerian National Petroleum Corporation (NNPC) subsidiary also declared that from 2004 all basic field studies should be done within the country, pointing out that Nigerian indigenous companies should be given the contract. Ogiemwonyi appealed to the committee that the present 200 core staff force is not enough to carry out the task of the agency, noting that about 450 recruits would be needed for 2004 budget year.
According to him, the agency is working with about 25 oil companies and with only 200 work force the work is not properly monitored, as it includes within the country and abroad. He also disclosed that government target to achieve oil reserve base of 30 bn barrels has been met early this year, adding that the government is set to reach oil reserve base of 40 bn barrels as well as productivity of 4 mm bpd by 2010.

In his remark, the chairman sub-committee on upstream, Federal House of Assembly, Mr Bethel Nnaemeka Amadi, noted that the bill on local content would soon be passed as all stakeholders are putting-in all effort to the passage of the bill. He stated that the boosting of the local content would mean capacity building for the indigenous company, adding that it would also be used as a means of reducing poverty level in the country.
Local content building means capacity building, more money for the indigenous companies, more employment opportunities with more contracts for the small companies from the oil companies. The local content bill would soon be passed with active part of DPR, NNPC, Ministry of Petroleum and the stakeholders. According to him, the legislative arm of government would make sure that the bulk of $ 8.4 mm budget of the oil companies for next year's exploration work is retained in the country.

He assured that the issue of recruitment for next year would be included in the corporation's budget for 2004/2005, adding that the management of NAPIMS should draw a draft to the National Assembly on staff recruitment. He explained that the legislature is set to amend the oil policy which was enacted in 1969, noting that the petroleum sector need to make itself relevant with current happenings in the world.
According to him, the Energy law was enacted in 1969 when Nigeria just discovered crude oil and then it was not familiar with environmental impact of petrol on the environment, but now laws have to be made to treat those issues.

On the Niger Delta crisis, Amadi said it is a serious case that the house committee on upstream is looking into, noting that the oil companies would be enforced to put the host communities into consideration when planning their budget.
His words: "The issue of restiveness in the community goes beyond what the oil companies are loosing, it is about how the community is being affected by oil exploration, it goes down to unemployment, loss of lives, degradation of the environment. The House is taking a holistic view on the issue. We want to make sure that the oil companies should put into their budget considerations involving development and social plans for the host communities."

The committee chairman meanwhile charged NAPIMS to bring all its gas project bill before it, noting that the House is ready to fund all gas projects in order to aid the Federal Government's flare out target of 2008.

Source: The Guardian
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