KEY POINTS
• Indigenous Nigerian companies now account for more than 60 per cent of the country’s oil and gas production, according to Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri.
• The minister said local content policies had expanded Nigerian participation across the petroleum value chain and increased value retained within the country.
• The Republic of Congo is seeking to draw lessons from Nigeria’s local content experience as it works to strengthen indigenous participation in its petroleum industry.
MAIN STORY
Nigeria’s local content policy has increased the role of indigenous companies in the petroleum industry, with local operators now accounting for more than 60 per cent of the country’s oil and gas production, according to Minister of State for Petroleum Resources (Oil), Sen. Heineken Lokpobiri.
Lokpobiri disclosed this on Monday in Abuja when he received a delegation from the Republic of Congo led by its Minister of Hydrocarbons, Mr Steve Onanga, on a working visit focused on local content development.
He said the development represented a major stage in Nigeria’s more than 15 year local content programme, which followed legislation designed to increase indigenous participation in the petroleum sector.
“Indigenous companies currently account for more than 60 per cent of Nigeria’s approximately 1.8 million barrels of oil equivalent daily production, including condensate.
“Some years ago, some of the International Oil Companies (IOCs) divested their onshore and shallow water assets to indigenous operators,” he said.
According to Lokpobiri, the transfer of some assets from international oil companies to Nigerian operators had created room for local firms to develop stronger technical and operational capabilities.
He said international oil companies had largely remained active in deep offshore operations, while Nigerian companies had expanded their presence across land, swamp and shallow water operations.
The minister said the growth of indigenous participation had also enabled Nigerian firms to operate across more areas of the oil and gas value chain and retain a greater share of economic value domestically.
He said Nigeria’s experience showed how African oil producing countries could strengthen their energy sectors by building indigenous technical capacity and developing local expertise.
Lokpobiri said Nigeria was prepared to share its experience with Congo as the country seeks to develop its own local content framework.
“If Nigeria can do it, I believe Congo can do it. Nigeria believes that the solution to Africa’s energy poverty largely rests with Africans developing their own capacity and resources,” he said.
The minister added that Nigeria now had more than 20 to 30 competent indigenous service companies operating alongside international service companies.
He said the presence of both local and international firms had provided opportunities for Nigerian companies to expand their technical capabilities and offer services across the petroleum industry.
Lokpobiri also explained that the Nigerian Content Development and Monitoring Board, NCDMB, was financed through contributions from industry operators rather than direct government funding.
“The industry is expected to contribute one per cent of contracts to support the administration of local content development,” he said.
Onanga said the Congolese delegation was in Nigeria to study the country’s experience and identify practices that could help strengthen local content in the Republic of Congo.
“Our wish is to improve local content in the Republic of Congo, and that is why we are here in Nigeria.
“We came here to learn from what Nigeria has done, share experiences and see how we can improve our own sector in Congo,” he said.
He said the delegation included officials responsible for upstream and downstream petroleum, local content, gas, energy and engineering, alongside representatives of Congo’s national oil company and indigenous companies.
THE ISSUES
- Nigeria’s local content policy has increased the participation of indigenous companies in petroleum production and services. The transfer of some onshore and shallow water assets from international operators has provided Nigerian firms with opportunities to take on larger operational responsibilities.
- The shift has also affected where local companies compete within the industry. While international oil companies have largely retained deep offshore operations, indigenous operators have expanded across land, swamp and shallow water activities.
- The coexistence of Nigerian and international service companies provides another channel for local capacity development. According to Lokpobiri, Nigerian firms have gained opportunities to expand their technical capabilities while operating alongside established international companies.
- Congo’s interest in Nigeria’s experience reflects the practical challenge facing African oil producing countries seeking to retain more value from their petroleum resources. The Congolese delegation is examining Nigeria’s policy framework and institutional experience as it works on its own local content system.
WHAT’S BEING SAID
“Indigenous companies currently account for more than 60 per cent of Nigeria’s approximately 1.8 million barrels of oil equivalent daily production, including condensate.” – Heineken Lokpobiri
“If Nigeria can do it, I believe Congo can do it. Nigeria believes that the solution to Africa’s energy poverty largely rests with Africans developing their own capacity and resources.” – Heineken Lokpobiri
“Our wish is to improve local content in the Republic of Congo, and that is why we are here in Nigeria.” – Steve Onanga
WHAT’S NEXT
The Republic of Congo will continue examining Nigeria’s local content framework and experience as it seeks to strengthen indigenous participation in its petroleum industry. Nigeria has offered to share lessons from its more than 15 year local content development journey.
BOTTOM LINE
Nigeria says local content policies have helped indigenous companies expand their role in production and services while retaining more value domestically. Congo is now looking to adapt relevant lessons from that experience to strengthen its own petroleum sector.
