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Indigenous firms got N1tn oil contracts in 2013

By BusinessNews Staff on May 31, 2014

Nigerian companies implemented contracts worth over N1.054tn ($6.45bn) in the oil and gas sector in 2013, according to the Ministry of Petroleum Resources.

The amount is about 63.37 per cent of the total value of contracts awarded in the sector for the same period, which was put at N1.579tn ($10.185bn).

A document made available to our correspondent from by the ministry on the performance of the Nigerian Content Act, read in part, “Compliance monitoring activities covered projects valued at $10,185,559,111.59. Nigerian content spend was $6,454,244,096.48, giving Nigerian content compliance level of 63.37 per cent.”

In the 12-month period, 158 commercial reports and 27 Nigerian Content Compliance Certificates were issued for concluded tenders, the document stated.

Three hundred and twenty-seven Certificates of Authorisation were also issued on approved Nigerian Content Plans submitted by the operators.

The Executive Secretary, Nigerian Content Development and Monitoring Board, Mr. Ernest Nwapa, said developing local content would ensure that Nigerians benefited from the multi-billion dollar investments expected to flow into the country after the passage of the Petroleum Industry Bill.

Failure to sufficiently domicile the services and manufacturing ends of the oil and gas industry operations, he warned, would mean that investments would flow into the country but take flight in the form of overseas procurement of equipment used for operations and remuneration of expatriate personnel working on the projects.

As such, the NCDMB boss said concerted efforts must be made to develop Nigerian content in the post-PIB oil industry for the benefit of the local economy and Nigerians in general.

Nwapa also insisted that there was an urgent need to expand discussions around the proposed legislation beyond the fiscal terms, adding that Nigerian content development should be a critical element of the discourse.

He said, “It is expected that when the PIB is passed, it will result in massive investment flow and those investments will yield revenue for Nigeria. But what we are looking for is a kind of impact that can give us employment on top of the revenue.

“That type of impact will only come from the investments that result in domiciliation. It is a good thing we have had a three-year head-start in the implementation of the Local Content Act, which has enabled us create some capacities in Nigeria such that as the PIB is being passed and investments are coming, we will then have jobs arising from the investments being executed locally.”

[Punch]

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