22 April 2014, Lagos – The non-passage of the Petroleum Industry Bill, PIB, by National Assembly has been viewed by industry players as a major threat to the growth and development of the Nigeria Content Act.
Indigenous players believed that the unending delay of the bill has stalled potential investment climate and slowed the growth in Nigeria’s oil and gas sector.
Their views are contained in a survey carried out by Borderless company, a Nigeria Content Business Growth Advocacy Group in commemoration of the 4th anniversary of the Nigeria Content Law.
According to the founder of Borderless, Mr. Tunde Kusamotu, the survey got feedback from indigenous companies on how the Nigeria Content Law can better be implemented, identified gaps in the Act, and serves as a catalyst to bridging implementation gas in the Act.
In one aspect of the survey, the Nigeria Content Development Perception Index, NCDPI, indigenous companies were asked to score the performance of International Oil Companies, IOCs, on their commitment to Nigeria Content Law.
According to the NCDPI, compared with the 2013 results, Shell retained its position as the most committed IOC to Nigerian Content Development.
The result also identified Addax Petroleum as showing the most significant improvement from the least committed to occupy the 2nd position; Total dropped to the 3rd place; Mobil retained its position at 4th place; while Agip dropped to the 5th position.
Chevron suffered the most significant decline by dropping three positions to 6th place, as the least committed to Nigerian Content Development from the perspective of indigenous suppliers.
Kusamotu said, “When viewed from an international geo-political angle, especially in view of the World Trade Organisation, WTO policy push for unrestricted commercial access and recent threatened agricultural sanctions against Nigeria, the European commercial interests are leading in terms of suppliers’ perception of commitment to adding value to Nigeria.
“The Chinese have showed marked progress and improvements in the direction of value addition. However it is most disappointing that the American commercial interest which seem slowing, in that direction.
“The NCPDI data indicates a creeping improvement in suppliers’ perception of IOCs commitment to Nigerian content development.”
According to Kusamotu, the NCDPI survey also revealed that despite the non-passage of the PIB, many indigenous companies reported that they were significantly and positively impacted by the Nigerian Content law. They admitted to enjoying greater growth business, capacity development and access to finance, even though the cost of funds (interest rate) from the Banks remains a challenge.
The survey also stated that indigenous companies are aware that funding is available through the Nigerian Content Fund, but requested for a clearer and less cumbersome process of accessing it.
According to the survey, although the IOCs are perceived to be more committed to Nigerian Content development, a lot more grounds is still to be covered.