Growth of indigenous contractors and Nigerian Content

The signing of the Nigerian Content Act on April 22, 2010 by President Goodluck Jonathan marked the beginning of the turnaround in the activities of indigenous contractors in the Nigerian oil and gas industry.

Indeed, the immediate result of the implementation by the Nigerian Content Development and Monitoring Board (NCDMB) through the effective supervision of Diezani Allison-Madueke, the minister of Petroleum is the capacity building by indigenous contractors who formerly found it difficult to compete with foreign contractors before the signing of the Act.

As at 2013, the umbrella body of indigenous contractors announced that members of the Petroleum Technology Association of Nigeria (PETAN) has doubled! These professionals, according to the body, are now specialising in more than 200 areas of professional competence in the oil and gas industry.

According to Emeka Ene, chairman of PETAN: “Nigerian Content Act and policies of the Petroleum ministry has contributed to the support being received by indigenous companies from foreign companies and financial institutions.

“This is the reason why at this year’s edition of OTC, we have 60 PETAN members and due to lack of space we were not able to accommodate all our members who signified interest in taking part in this years conference. Right now, we have 50 of our members in attendance. Beyond PETAN members, we have at least another 50 exhibitors. So, in all, there are over 100 Nigerian companies exhibiting at this year’s offshore technology conference.

In the upstream sub-sector, the impact of her administration is already being felt as Shell Petroleum Development Company (SPDC) recently sold its interest in four oil blocks to indigenous companies including SEPLAT, Neconde Consortium led by Nestoil plc, Shoreline Natural Resources and 45 percent interest in OML 40 to Eland Oil and Gas Ltd and Starcrest Nigeria Energy Ltd. Another beneficiary of the divestment by upstream foreign players is Atlantic Energy Concept Limited which acquired (OMLs) 26, 30, 34 and 42.

In the same vein, the opportunities presented to these indigenous companies -to become owners of upstream assets- has resulted in the engagement of indigenous contractors. A case in question is the engagement of Century Energy Services by Amni Petroleum Development Company Limited, Nigeria Petroleum Development Company and Afren plc.

Also today, International Energy Services (IESL), is currently engaged in the designing of facilities for the deepwater projects of Chevron and Total Upstream Companies. The logistic base of LADOL is now busy with activities by Shell, Chevron and oil companies. Equally, as a result of the role of President Jonathan, indigenous companies are now taking control of lucrative pipeline construction projects.