Nigerian Content plugs $380bn oil industry drain

Mr Antonio Pagano, MD - NAOC*2 million jobs outflow in 4 years
*Retains $5.4bn in local economy


20 November 2014, Sweetcrude, Yenagoa – FOUR years after the Nigerian Content Act was passed by the National Assembly, the initiative has saved the country no less than $380 billion dollars and at least 2 million jobs.

This was the position of Oil Producers Trade Section, an affiliate of the Lagos Chamber of Commerce and Industry (LCCI) ably represented by its Chairman Mr. Antonio Pagano at the ongoing Practical Nigeria Content Forum in Yenagoa, Bayelsa state, southern Nigeria.

He noted that since inception, Nigerian Content has developed into an important phase of the Nigerian oil business structure as investing in Nigeria content now secures the social license to operate and in the long term guarantees the sustainability of Nigeria business model through the creation of a strong local supply chain.

“In the 30 years preceding Nigeria’s adoption of the local content policy in 2005, our industry had exported an estimated 2 million jobs and was spending over 95 percent of total investments abroad, and cumulative capital was estimated to be US$380 billion-equivalent to over 70 percent of Nigeria’s GDP, and more than the GDP’s of five oil producing countries; Libya, Ghana, Angola, Kenya and Ecuador combined.

We have carefully, pursued an intervention strategy focused on identifying the key spend drivers and worked collaboratively towards reversing the outflow of the oil and gas spend in favour of the local supply chain. These concerted efforts have manifested as strides in the areas of fabrication, in-country manufacturing, indigenous asset acquisition, human capital development and funding.

On the back of support from OPTS members, local start ups have been transformed into truly world class companies, foreign technical partnerships have been struck, new facilities built, more assets acquired, international service companies have found justification for a relocation of their technical facilities into Nigeria and the drive for human capacity development has been ramped up,” he said.

Pagano also said that the OPTS has supported the emergence of several companies including Kaztec, Nigerdock, Dormanlong, and Aveon offshore to acquire capacity, expertise and ensure retention of over $5.4 billion in Nigerian economy.

“We have supported indigenous asset acquisition, including vessel fleet expansion, rig asset acquisition etc. Notably, we supported Caverton helicopters to expand its fleet to become the single –largest provider of aviation services to the oil and gas sector in the West African shelf. Today, Caverton Helicopter have evolved and is listed on the floor of the Nigerian Stock Exchange providing an opportunity for Nigerians to share in its tremendous success.”

Discussants at the Prtactical Nigerian Content forum 2014Also speaking the Minister of petroleum resources Mrs Diezani Alison-Madueke said Interventions in the area of Human Capital Development on the back of projects have provided over 5,000 training and employment opportunities. “We have also packaged trainings that address the age-long environmental degradation in oil producing communities through an Environmental Remediation Training program for youths where 1,000 youths are currently acquiring the required skill sets. In the same vein, 50 students have completed classroom training in the geo-sciences field; they are currently being placed in relevant organizations to receive the required hands-on experience to enable them get gainful employment.”

The minister who was represented at the event by the permanent secretary, ministry of petroleum resources stated further that the Nigerian Oil & Gas Park Scheme, NOGaPS, was conceived to encourage local value addition for equipment used in the oil & gas industry and encourage OEMs to procure component parts of their equipment from Nigerian SMEs, according to her Implementation of NOGaPS has commenced in earnest.

According to her the Nigerian Content Development Fund, NCDF, has grown to a formidable level and now supports lending with partial guarantees and interest rebates to participating companies.

“Our success thus far is as a result of a combination of Government commitment at the highest level, support from international oil companies, deliberate certification requirements in contracting process, massive private sector investment and favourable investment climate” she enthused.

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