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Nigeria’s oil, gas industry records $380bn capital flight in 30 years

By on November 26, 2014

The Oil Producers’ Trade Section (OPTS), an association of all the leading oil and gas –producing companies in Nigeria has stated in the 30 years preceding Nigeria’s adoption of a local content policy in 2005, the oil and gas industry had exported about two million jobs, spending over 95 per cent of total investments abroad, with cumulative capital flight estimated at $380 billion.

Speaking at a special session of the just-concluded 2014 Practical Nigerian Content held in Yenegoa, Bayelsa State, the Chairman of OPTS and Managing Director of Nigerian Agip Oil Company (NAOC), Mr. Ciro Antonio Pagano stated that the capital flight suffered by the Nigerian economy during the 30 –year period was over 70 per cent of the country’s Gross Domestic Product (GDP) and more than the combined GDPs of five oil-producing countries of Libya, Ghana, Angola, Kenya and Ecuador.

Pagano, who cited statistics from the Nigerian Content Development and Monitoring Board (NCDMB), however, said that since the local content policy was introduced, the oil companies had worked collaboratively to reverse the outflow of oil and gas spend in favour of the local supply chain.

He said the efforts of OPTS had manifested as strides in the areas of fabrication, in-country manufacturing, indigenous asset acquisition, human capital development and funding.

Pagano said in the area of fabrication, the oil companies had supported the emergence of several indigenous companies to acquire capacity, expertise and ensure retention of over $5.4 billion in the Nigerian economy.

“In the area of manufacturing, despite recording several success stories, including SCC pipe’s pioneering feat of manufacturing the first made-in-Nigeria Double Submerged Arc Welded Helical (DSAWH) pipes and Cameron Offshore Systems’ production of the first made-in-Nigeria Subsea Christmas Tree in 2012, we are already thinking long term by signing domestication agreements with six original equipment manufacturers (OEMs) and their local partners to establish assembly/manufacturing facilities in Nigeria,” he said.
According to him, the commitment of the oil companies to Nigerian Content was key to Cameron’s decision to double its in-country valve assembly capacity in Nigeria.

Pagano, who was represented by NAOC’s General Manager in charge of Nigerian Content, Mrs. Callista Azogu, identified some of the milestones achieved in the Nigerian Content journey to include industry-wide awareness, optimal compliance, in-country sufficiency, and internationalisation.

“All industry stakeholders rightly agree that Nigerian Content is a journey, replete with its unique victories, challenges, ups and downs,” he added.

“But we should recognise that there are no magic wands in this journey. Building in-country capacity, especially for strategic industry inputs such as steel plates, deepwater bases, offshore rigs, heat exchangers, topside integration, original equipment manufacturing and others will require significant capital investment, access to advanced technological know-how, long lead times to commissioning, even longer investment payback periods and perhaps more importantly, availability of a viable local market to attract needed investments,” he further explained.

 

[ThisDay]