Nearly three years after the signing into law of the Nigerian Local Content Act by President Goodluck Jonathan, experts in the nation’s oil and gas industry have been unanimous in lauding the implementation of the Act, saying that it has yielded positives for Nigerian firms and professionals but also called for a firmer enforcement of the Act to ensure that more long term benefits are derived from it.
Joseph Akpieyi, chairman of the board of directors, Arco Group Petrochemical Engineering plc, while fielding questions from the press after the Group’s 31st Annual General Meeting at the Oriental Hotel, Victoria Island, Lagos, recently, commended the Federal government for the gains so far made from the implementation of the Act.
“Quite frankly, I think the Nigeria Content Act, has given us, the Company(Arco Group) at least, some leverage in terms of certain types of businesses that must be reserved for Nigerian companies and I think that has helped significantly in growing the business,” he said.
Arco Group Petrochemical plc at its AGM last week announced results that showed a largely successful 2012 with achievements highlighted by a N1.7billion IFRS adjusted profit before tax (PBT); profit after tax (PAT) N1.44billion and a dividend of 20 kobo per share which represents 100 percent increase on last year’s dividend payment.
Akpieyi revealed that the “string of successes” recorded by Arco is a consequence of the opportunities provided for Nigerian firms and professionals by the Nigerian Content Act.
Speaking further, the Arco Group Chairman stated that “all those sort of leapfrogging performances that you heard me talk about could not have been possible without some businesses being made available to Nigerians.”
According to earlier reports by BusinessDay, Emeka Ene, chairman of Petroleum Technology Association of Nigeria (PETAN), the umbrella body of indigenous contractors, who also corroborated Akpieyi’s position on the NCA, “the 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.”
Another expert, Emi Membere-Otaji, the second deputy president of Port Harcourt Chamber of Commerce, Industry, Mines & Agriculture (PHCCIMA) and chairman, ELSHCON Nigeria Limited, commended the current management of the Nigerian Content Development and Monitoring Board (NCDMB), which according to him, are “very passionate about Nigerian content” and are “doing a very good job” as the indigenous companies have made tremendous progress since the Act was passed into law.
Membere-Otaji’s company, ELSHCON Nigeria Limited, is an engineering, procurement, construction and installation (EPCI) contractor, as well as marine services provider to the Nigerian oil and gas industry and is one of the indigenous oil servicing companies who have benefited from the NCA implementation.
As regards the Nigeria Content Act, Membere-Otaji stated that his Company had “invested because the Nigerian Content Act has opened up the opportunities for Nigerian companies to go into fabrication.”
It will be recalled that the Local Content Act was enacted on April 22nd 2010. The Act, which provides a framework for increased Nigerian participation in the nation’s oil and gas industry, also provides for minimum thresholds for Nigerian participation in activities within the industry through the utilisation of Nigerian human and material resources and services in the upstream sector of the industry. This includes all activities, connected with the exploration, development, exploitation, transportation and sale of Nigerian crude oil and gas resources.
The Nigeria Content Act also provides for the Nigerian Content Development and Monitoring Board (NCDMB), with Diezani Alison-Madueke, minister of petroleum resources, as its chairman and Ernest Nwapa as executive secretary of the Council, with the Board acting as the industry watchdog for the implementation of the Local Content across the oil and gas industry and to ensure compliance by every operator bidding for any licence, permit or interest.
According to reports on the NCDMB website, Nwapa recently revealed that the implementation of the Nigerian Content Act had attracted $5billion worth of investments into the Nigerian economy and had also led to the creation of about 38,000 jobs, since 2009.
The NCDMB executive secretary, while speaking at opening session of the Practical Nigerian Content Workshop which held recently in Yenagoa, Bayelsa State, ascribed the successes so far recorded in the implementation of the Act to the strong support from both President Goodluck Jonathan and Diezani Alison-Madueke, the minister of petroleum resources.