Saturday, September 23, 2017
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LOCAL CONTENT AND RESOURCE REQUIREMENTS

Local content, as defined by the Nigerian content development bill is:

“…the quantum of composite value added to or created in the Nigerian economy by a systematic development of capacity and capabilities through the deliberate utilization of Nigerian human, material resources and services in the Nigerian Petroleum Economy”.

The Nigerian Oil and Gas Industry Content Development Bill was signed into law in 2010. The Act is designed to enhance the level of participation of Nigerians and Nigerian companies in the country’s Oil and Gas industry. With the promulgation of the Act, the Government has clearly established its intention to increase indigenous participation in the industry in terms of human, material and economic resources. The implementation of the Act was expected to significantly change the business and operating structure in the Nigeria Oil and Gas industry, particularly in the international oil service companies. The Government had set local content targets of 45% in 2006 and 70% in 2010. This target is currently moving towards 100% in fabrication as this areas is seen as Nigeria’s area of competency.

With regards to the downstream sector, the Government has embarked on the deregulation of the sector through the licensing of private refineries and privatization of public refineries in order to nurture private sector participation. The licensing of private refineries is expected to improve domestic capacity.

A bill is to be approved by Government, making it mandatory for all major international oil companies operating in Nigeria to refine at least 50% of their crude oil production in the country. This is to ensure there are many suppliers in the local market, encouraging competition and the attendant lower costs.

LAKEL and their partners have a clear strategy to utilise local materials and services, recruitment and development of local human capital in all economic activities relating to their work in the region.