Arco Group gets boost from Local Content Act

Acro Group plc, a Nigerian indigenous service provider in the oil and gas sector, has continued to count its gains three years after the passage of the Nigerian Local Content Act by President Goodluck Jonathan on April 22, 2010, while at the same time commending the administration for opening up the nation’s oil and gas industry to indigenous participants.

Speaking at a dinner during the recently concluded Nigeria Oil and Gas Conference,Alfred Okoigun, group managing director and chief executive officer of Arco Group, recounted how the passage of the Content Act changed the face of the industry and provided a platform for indigenous companies like Arco Group, to become active participants in the industry with leapfrogging performances to show after just three years of its passage.

Okoigun stated: “Good enough, the present government in Nigeria has started to roll back the inertia of the past. It enacted the Nigerian Oil and Gas Content Development Law in 2010. Of course, the industry’s initial conception of the law was that of ‘let us wait and see.’ I am glad that the government did not just put the law in place but is ensuring that the agencies put in charge are monitoring the situation.

He also commended Shell for actively implementing the provisions of the Act, a situation that has seen Arco benefit immensely from the Local Content Act. He said: “I will at this point commend Shell Petroleum for being currently active in supporting the law. Examples of what the company is doing on the growth of local capacity are all over the place in the industry.

“Our company, Arco Group has indeed been working with Total towards the realisation of the objectives of the Law. Our relationships with other oil majors are showing signs along the same direction. I would like to seize the opportunity of this occasion to appeal to all concerned to recognise the changing trends in the oil and gas industry in Nigeria and facilitate it instead of looking for loopholes to circumvent it.

The Arco GMD/CEO also took the opportunity to call on other key players within the industry, urging them to allow for more Nigerian companies to participate in the industry as it is in other oil producing countries.

He said: “My message is that the key players in the industry owe us an obligation in Nigeria to advantage of the law to grow Nigerian companies to be viable participants in the industry even at this late hour. I am not saying that they should be philanthropic to a fault.

“All I am saying is that beyond making money, there must legacy to boast of like the Shell example in Malaysia. I make this case, not just for Arco, but for other wholly Nigerian companies operating in the oil and gas industry. I am of the opinion that the changes taking place now can encourage other Nigerian investors to come into the business to boost employment of our youths.

Speaking further, Okoigun recounted how the oil and gas servicing company started over three decades ago with just a couple of hands but has now grown to be an employer of about 400 employees with over 200 of them being engineers and technicians.

“We can imagine the number of skilled and semi-skilled manpower that oil and gas industry can mop up if a lot more indigenous companies are gainfully involved in the industry. We strongly believe that when jobs are created, poverty will be alleviated. The overall positive results of this deliberate action cannot be underestimated,” he said.

Arco Group, it will be recalled, last December at its Annual General Meeting (AGM), posted a “string of successes” highlighted by a N1.7bn IFRS adjusted profit before tax (PBT); profit after tax (PAT) N1.44bn and a dividend of 20 kobo per share which represents 100 percent increase on 2012 dividend payment.

Only last month, Arco Marine and Oilfield Services, a subsidiary of Arco Group, acquired two new fast crew boats, the fourth and fifth in its fleet, at the cost of N3billion. All the outstanding results, the Group has stated, are traceable to opportunities provided for indigenous companies by the Nigeria Local Content Act.

OLUSOLA BELLO