Madueke disclosed this in Abuja, Thursday in her reaction to the signing of the Local Content Bill into law by Acting President, Dr Goodluck Jonathan.
She said the new law has far-reaching implications for the issues of technological advancement, long term cost effectiveness, post-amnesty programmes in the Niger Delta and the improved impact of the Oil & Gas Industry on National GDP.
The minister expressed joy that the law will transform the industry from a major importer of goods and services to an industry that sources a substantial proportion of its inputs locally to support operations thereby empowering Nigerians.
Dr Levi Ajuonuma, the spokesman of the Nigerian National Petroleum Corporation (NNPC) also quoted the Group Managing Director of the NNPC, Mallam Shehu Ladan as having described the passage of the new law as a great day for the industry, stressing that its multiplier effects are enormous.
Ajounum quoted Ladan as saying, “the signing of the Bill into law today [Thursday], is timely because it sets the stage for the anticipated growth that the PIB will herald in respect of our national oil and gas asset portfolio. Post PIB, it is estimated that investment inflow into the industry will drive activities over the next five years in a magnitude unprecedented in the history of oil and gas in Nigeria.”
The Bill for an Act to provide for the development of Nigeria’s Content in the Nigerian Oil and Gas Industry, for Nigerian Content Plan, for Supervision, Coordination, Monitoring and Implementation of Nigerian Content and for Matters Incidental Thereto, 2010, was signed into law Thursday, by the Acting President.
The Act, among other notable objectives, provides that Nigerian independent operators shall be given first consideration in the award of oil blocs, oil field licenses, oil lifting licenses and in all projects for which contract is to be awarded in the Nigerian oil and gas industry.
It also stipulates that in the bidding for any licence, permit or interest and before carrying out any project in the Nigerian oil and gas industry, an operator shall submit a Nigerian content plan demonstrating compliance with the Nigerian content requirements of this Bill.
The thrust of the Nigerian Content Policy of the federal government issued by the NNPC to the international oil companies and other stakeholders in 2005, is to promote value-addition to the local economy, increase indigenous participation, build local capacity on the back of ongoing projects and generally create linkages with other sectors of the national economy to grow local content to 70 percent by 2010.
Under NNPC’s supervision, substantial progress was recorded with local content levels rising from a paltry seven percent in 2005 to over 35 percent today. The difficulties experienced in enforcing compliance reinforced the need to underpin the implementation strategy with a comprehensive Act.
The new law requires that a high proportion of these activities will be performed in Nigeria with increased participation of local companies and indigenes. However, it is clear that such capacity is not currently available, but these gaps present significant business opportunities to grow required capabilities to support these requirements.
The minister noted that there is urgent need to undertake certain interventions to, among other things, build strong partnerships between local and multinational service companies to handle engineering, project management, procurement, data processing, reservoir studies etc; upgrade existing shipyards and develop new ones with modern docking facilities for marine maintenance and boatbuilding; establish steel pipe mills to handle the high demand of line pipes.
