Nigeria introduces online contract system in oil sector

Oct 01, 2005 02:00 AM

The federal government of Nigeria has introduced a common contract procurement system, otherwise known as Nigerian Petroleum Exchange (NIPEX) for the nation's oil industry. The new contract procurement system which will be driven through an online system is expected to come alive by December this year.
Minister of state for petroleum resources, Dr Edmund Daukoru who disclosed this recently noted that the system is designed to enhance efficiency in procurements of goods and services. According to him, the system is in conformity with the global practice and it is part of the return process in the Nigerian oil industry.

Daukoru noted that last year the Nigerian National Petroleum Corporate introduced petroleum market place, as strategy to ensure transparency in the way oil and gas businesses are being conducted in the country. He said the petroleum market place took into account the basis parameter in the execution of project which emphasise transparency.
“One of the quick winks of petroleum industry reform is the development of petroleum place which was launched on the August 24 2005," he stated. He said in pursuing this reform process in the sector, several challenges are being faced by the operators which he stated are global in nature.

Daukoru explained that these challenges are part of the wide fluctuation in global price of crude which leads to personnel rationalisation in lean times. The minister noted further that as boom comes, the industry may be faced with “depleted competence and skills which gaps one difficult to fill in a hurry."
"Being a part of the global oil and gas industry, Nigeria has a fair share of such skills and competency gap in it domestic scene" he stated.

He said though Nigerian is a major producer of oil and gas resources, noting however that there resources are coming mainly from one sources which in the Niger Delta region.
"Obviously, investors would like to hint their risk by investing in the area of proven prospectively, pointing out that such situation leaves the country to vulnerability in the event of a natural disaster as witnessed in the Gulf coast.”

Daukoru stated as part of government effort to increase national oil reserve to 40 bn barrels about 70 oil blocks were allocated to prospective investors between 2000 and 2005. He said, government has entrenched local contact development in the exploration and production of oil and gas resources to boost this participation.
He listed some of the vehicles to drive the actualisation of the local content programme to include:
-- Development of a legal and policy framework to ensure compliance and progress monitoring
-- promotion of increased participation of Nigerian companies in engineering, fabrication and other services
-- improving local staffing of multinational oil companies
-- development of strategic plan for technology transfer, and drawing up, new initiative in local content enhancement including petroleum market place.

Source: Guardian Newspapers
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