SIR: Few months ago, Minister of State for Petroleum Resources, Timipre Sylva, expressed the federal government’s readiness to provide support for Senegal, by sharing Nigeria’s oil exploration expertise and experiences with the country. As an African country new into the exploration of crude oil, Senegal would certainly need all the help it can get, to harness the power of its oil and gas resources.
As Nigeria prepares to make good on its promise to fellow West African country, two things stand out from this gesture of support. First is need for greater African economic integration. It is important for African countries to embrace growth-enhancing policies and opportunities, by providing support for one another, while working together towards the achievement of economic prosperity for the continent.
The second reality, which sits at the heart of progress for energy sectors in Africa, is local content. It is a driving force for Africa’s oil and gas sector sustainability. For Nigeria, it has been over 60 years since the country began oil production and in the last 10 years, local content in the oil and gas sector has risen from a paltry three per cent to about 43 per cent, thanks to government policies and initiatives that actively support the operations of sustenance of local companies in the country.
For example, in June, the Nigerian Content Development and Monitoring Board, NCDMB, set up a $30 million working capital fund to support indigenous oil and gas companies, especially against the adverse effects of COVID-19 pandemic, loss of contracts due to low oil price and the difficulty of companies to retain their personnel in employment. Few months ago, the NCDMB also concluded plans to launch a $50 Million Research and Development Fund aimed at achieving a target of 70 per cent of local content in Nigeria by 2027.
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It is one thing to provide financial support necessary for the sustenance of companies, within the oil and gas as well as industrial sector; however, it is a completely different thing to back up this financial support with an enabling environment that supports all round growth and progress for these companies. These days, we see agencies strongly identifying with local companies that are leveraging local content to thrive. Recently The Nigeria Content Development Management Board (NCDMB) and the Asset Management Corporation of Nigeria (AMCON) displayed this, when they not only identified with but strongly applauded the equity investment made by Africa Capitalworks (ACW) into Dorman Long Engineering Limited (DLE)
The commendation and support from AMCON and the NCDMB, stems from the realization that the equity investment will position Dorman Long, which have built a strong reputation with over 70 years of operations in Nigeria, to play a major role in the oil and gas sector and further promote in-country content development. While the investment gives hope to indigenous contractors, it is a strong proof that companies that strive to adopt innovation and resilience especially in alignment with the local content policy obtainable in the oil and gas sector, will almost always enjoy government support.
As Nigeria gets ready to grow its hydrocarbon sector with the launch of more than 100 oil and gas projects over the next five years, including 25 upstream projects, increased government support and an enabling business environment will be required to strongly motivate Nigerian companies in the energy sector, helping them to contribute tremendously towards the development of the Nigerian economy through value addition, increased job opportunities and superb execution of different oil contracts and undertakings.
With more support provided for the advancement of local companies, we become even more positioned to share Nigeria’s oil exploration expertise and experiences with other African countries.
- Femi Isaac,
Lagos.