Local Content Act best thing to happen in Nigerian Oil and Gas industry

Local Content Act best thing to happen in Nigerian Oil and Gas industry

-By Benedict Peters – Aiteo Group

 
In the year 2000, I started building what will turn into Nigeria’s biggest storage terminals in Lagos and in Port Harcourt. I had just finished a seven year sojourn of working as an executive in other Nigerian oil companies and now positioned myself to become a local content player in Nigeria. When the Nigerian local content act came out, I was propelled to be local content leader in the Nigerian oil and gas industry, as I had built the requisite infrastructure required and put in place the best brains that I could get in Nigeria to help me operate in the downstream industry.

The passage into law of the Nigerian Local Content Bill is one of the significant developments in localizing management and control of the oil and gas industry. The bill received presidential assent on the 2nd of April 2010 and created a law to provide for a framework towards indigenous content in the Nigerian oil and gas industry.

In summary, the local content Law specifies that Nigerian independent operators should be accorded “first consideration” in the award of Oil and Gas related contracts and that Nigerian service companies should also be given “exclusive consideration” for contracts and services. Indeed experts believe that an agreeable scenario will be where Nigerian Companies are allowed to participate along International Oil Majors. 

In 2010, I already had over 16 years of experience in the oil and gas industry. Nigerians started to have great confidence to be players along the entire value chain of the oil and gas industry, formerly, an exclusive domain of a few global players, whether it was in the downstream space, midstream, upstream or even in the services.

I pushed my group to start thinking outside the box and told them that it was time to develop more capacity across the entire value chain and that it was time to now play in the E&P sector and not just be leaders in the downstream sector. We moved upstream.

Just like I did in the downstream sector, I hired top Nigerian and foreign professionals who had worked in IOCs. We invested in very strategic systems, software and built up on a fast track basis, in-house capacity. 

Thereafter, we went after one of Shell’s largest onshore asset in Nigeria and we won the bid. This is a story for another day, but we won the Shell bid at USD2.85 billion, an unprecedented feat, both in the sum we paid and the fact that we won this transparent global tender, from SHELL.

Nigerians can win if they are confident. We need this renewed confidence to flourish again in Nigeria. It was this confidence and “can do” spirit that pushed us all, plus, it was an era, where Nigerian local content companies built pipelines, explored and drilled oil out of the ground and traded this oil globally.

Nigeria needs a renewed confidence in local content players and in its local content act. We need more qualified Nigerian companies out there laying pipelines, building refineries, drilling for oil, becoming recognized global traders. We can do this again. We did it before.

Qualified Nigerian companies have shown that if given an opportunity, as local content players, that they can deliver the same professional results as many of the globally recognized names. 

We need a renewed confidence in this local content act and renewed support, albeit with some amendments, which will help make the local content players to increase capacity and take Nigerians to the next professional level, globally.

Just like President Donald Trump wants to make America great again, a renewed support of capable local content Nigerian players who have the requisite infrastructure and who meet global professional standards, will help Nigeria rebuild renewed local content capacity in the Nigerian oil and gas industry.

 
Benedict Peters is CEO and Vice Chairman of AITEO Group, Nigeria.

 
-[Oil Voice/Aiteo Group]