Nigeria's oil and gas industry gulps $ 12 bn annually

Nov 04, 2008 01:00 AM

The oil and gas industry in Nigeria now gulps about $ 12 bn annually over the last five years, while in the last 20 years alone, not less than $ 300 bn was generated in total revenues.
The industry which commenced operations 50 years ago is also said to have put in place over that period of time, four refineries, six Liquefied Natural Gas (LNG) trains, four Floating Production Storage and Offloading (FPSO) vessels, hundreds of oil platforms, thousands of wells and flow-stations and millions of square kilometres of seismic data.

These were the words of the Minister of State for Energy in charge of Petroleum, Odein Ajumogobia (SAN), while delivering his keynote address at the recently held Nigerian Content Consultative Forum in Lagos.
The minister who thanked the Nigerian Content division of the NNPC who are the organisers of the event as well as other International Oil Companies (IOCs), and local providers for supporting the event, urged the participants and other stakeholders to ensure that the forum lives up to its billing of being a consultative one where the progress to date on Nigerian Content (NC) development, challenges and roadmap going forward, are freely and robustly discussed.

"I am sure we all remember the reason why the Nigerian Content Policy was formulated. For the purpose of completeness, let me do a quick recap. In 2005, the government introduced the Nigerian Content Development Policy to create a platform for the country to maximize the opportunities in the oil and gas sector as well as improve the linkages of the sector with the domestic economy."
"The need for this policy can be understood in the context of the fact that since the industry commenced operations 50 years ago, we have built four refineries, three petrochemical plants, over 5,000 km of pipelines, six LNG trains, four FPSOs, hundreds of oil platforms, thousands of wells and flow-stations and millions of square km of seismic data have been acquired."

"In the last 20 years alone, the industry has generated total revenues of some $ 300 bn while industry spend has grown to some $ 12 bn annually in the last five years. Despite this activity level, the country has little to show in terms of local capacity and capability for indigenous participation."
"The Nigerian Content Development Policy attempts to correct this anomaly by stipulating activities of the sector that must be carried out within Nigeria to bring about rapid development of skills and capacity in the domestic environment."

Odein Ajumogobia further recalled that in 2006, NNPC had introduced 23 domiciliation guidelines, setting out the scope of services that must be performed in Nigeria if the government's target of 70 % NC by 2010 was to be realised. These areas, he said, also included Engineering, Design, Fabrication, Wells and Drilling, Operations & Maintenance, Manufacturing, Shipping and Insurance.
"It is gratifying to note that since the policy was introduced, Nigerian content level had increased, however, the present level is still below the policy target of some 50-55 % by 2008. I have been advised that if the current trends continue, we will be hard pressed to achieve our target of 70 % local content by 2010."

"While we acknowledge that we have set high targets for ourselves, we are convinced that the targets are achievable. However, in order to achieve our aspirations we will all have to do things differently. Achieving the 70 % NC target by 2010 will require aggressive interventions and creation of new initiatives."
"It will also require that all of us -- i.e. government, investors, industry and other stakeholders -- should assiduously work together to make it happen."

For those wondering if increased Nigerian content is a good thing, the minister said, "I can only refer you to the problems in the Niger-Delta at the moment. It may be true that there is a political dimension to the militancy but it is even more true that a large part of it is due to the poverty that is all-pervasive in the Niger-Delta, seemingly in the midst of plenty".
Any improvement in the economic conditions of the people therefore can only reduce militancy, crude oil theft and insecurity, as well as provide greater access to oil and gas development," he enthused.

Source / Vanguard
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