The Nigerian local content act has been described as a success it terms of the number of Nigerians participating in the Nigerian Oil and Gas industry.
The Local Content Act in the oil and gas sector of Nigeria came into being in April 2010 as an intervention by the Federal Government to provide opportunities for indigenous operators in the sector.
The provision of the Act was very clear as an intervention for Nigeria’s independent operators to be given first consideration in the award of oil blocks, oil field licences, oil lifting licences and in all projects for which contract is to be awarded in the Nigerian oil and gas sector.
It further states that in the bidding for any licence, permit or interest and before carrying out any project in the Nigerian oil and gas industry, an operator shall submit an evidence of compliance with the Nigeria content requirement of the Act to ensure compliance with the Act. The Act stipulates that 70% of the oil and gas contract jobs should be ceded to Nigerian firms to guarantee their survival and give them bountiful returns in a sector hitherto dominated by expatriate companies.
Speaking exclusively with Nigerian NewsDirect, the Chief Executive Officer of Offshore Dimension Limited, Mr. Seun Faluyi said there has been success in terms of value and quality, adding that there are a lot of indigenous companies that now have more skills doing things in the industry.
He said that some years ago the International Oil Companies (IOCs) were like Nigerians cannot do it, but right now they don’t have suchexcuse anymore because Nigerians can do it.
“Another thing is that the quantum of value that has been harvested in the industry has increased. There is more that is changing to Nigerians hand in terms of owners of oil companies. For example, marginal field owners that are Nigerians were not much before but now we have more of them. Oil companies that are owned by Nigerians are more than before. More Nigerians are putting more money into the industry because of the local content act,” he said.
According Faluyi; “the local Content act has been very helpful. Five years ago when it started, there were not too many Nigerian companies in the industry. There were few companies that were doing engineering and construction works during that time. About ten years ago I started a company called Global Ocean Engineers (Nigeria) Limited. The company does engineering designing for oil and gas companies and as at that time there were very few engineering companies that were Nigerians.”
“When the Nigerian Content regulation came in, it was like a volume target of how much Nigerian should be in the industry. Considering what Nigerian companies could do at that time it was as if the Nigerian content act was impossible. Even do it seemed as if it was impossible, when you look at the industry and see Nigerians companies that are now offering services you will surely be surprise. It happens because of the legislative encouragement to see that Nigerians companies do it.
In any oil and gas conference that you go now you will see more Nigerians that are Chief Executive Officer of companies. It was not like that few years ago. For me it has been a success it terms of the volume of Nigerians participating in the industry,” he further explained.