Daily Independent Online.
Thursday, March 25, 2004.
Oil industry gets deadline on local content
By Bassey Udo
of Nigeria’s oil industry have been given up to 2007 to achieve 45 per
cent local content in their activities and reach 70 per cent latest by 2010.
Group Managing Director of Nigerian National Petroleum Corporation (NNPC),
Funso Kupolokun, disclosed this Wednesday in Abuja at a two-day stakeholders
seminar on the sector.
was organised by Africa Energy Limited to afford Nigerians the opportunity of
suggesting inputs to the proposed Nigerian Content Development Bill sponsored
by a member of the House of Representatives, Chudi Offodile.
achieve the deadline, Kupolokun said NNPC is considering establishing local
content departments in all its subsidiaries to collate information on industry
local content performance, particularly through the activities of multinational
Joint Venture Operators and Production Sharing Contract (PSC) partners.
he stressed the importance the government attaches to the participation of
Nigerians in the industry, he stated that meeting the deadline would be
difficult unless Nigerians are encouraged to invest in identified business
areas through the formulation of appropriate policies.
traced the origin of government efforts to raise awareness on local content to
the setting up of the National Committee on Local Content in 2001, which was
mandated to review all existing documents on the issue and fashion policy
statements and a draft bill. Its
report provided the basis for a study last year by a Norwegian company in
partnership with the government.
findings confirmed scant local participation in the upstream sector and its limited
contribution to manufacturing industries compared to what obtains in
contemporary countries such as Brazil, Norway, Indonesia and Malaysia, which
have attained as high as 45 per cent level or more, against Nigeria’s
five per cent.
reports identified impediments to local content development to include
inadequate and incoherent policies and legislations; low technological
capacity; inadequate infrastructure; limited funding avenues; harsh business
environment; non-competitive business structure of indigenous companies, and
bureaucracy and credibility issues.