Why local oil, gas companies fold up in Nigeria – NCDMB

The Nigerian Content Development and Monitoring Board (NCDMB) has stated that many indigenous oil and gas companies die down in Nigeria because they do not adhere to corporate governance principles.

The executive secretary of the board, Engr Simbi Kesiye Wabote, while speaking during a ceremony marking the rebranding of the Niger Delta Exploration and Production (NDEP) into Aradel Holdings yesterday, said local oil and gas companies must adhere to the principles of corporate governance in their operations if they are to grow and achieve sustainability.

He regretted that many local oil and gas companies have died because they do not adhere to corporate governance principles.

He, however, lauded the management of Aradel Holdings for setting high standards of corporate governance, stating that one of the incredible things the chairman, Chief Ladi Jadesimi; the former Managing Director, Dr Layi Fatona, and their team have done is instill the spirit of corporate government.

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He said the reason the company is succeeding is that the owners of the business are not contractors, and they are not also engaging contractors or engaged in round-tripping.

He said: “They are one of the local companies that NNPC Limited is proud to associate with. NCDMB is also proud of their success and we will continue to support them. That is why we urged indigenous producers to emulate Aradel Holdings and take corporate governance seriously, while owners of businesses should detach themselves from the daily operations of their organisations.”

Wabote also challenged Aradel Holdings to champion the development of local content, stressing that the implementation of the Nigerian Content Initiative and the Nigerian Oil and Gas Industry Content Development (NOGICD) Act enabled indigenous producers to exist and thrive.

He insisted that it is the responsibility of Aradel Holdings and other local producers to support local content, protect and enhance it, with a view to creating jobs, growing technology, and developing the nation’s natural resources.

He disclosed that the percentage of unemployed Nigerians was about over 30%, warning that it would be a grave mistake if the oil industry were to de-emphasise local manufacturing and local production.

He also challenged Aradel Holdings to play an active role in the acquisition of assets being divested by some international operating oil companies.

Earlier in his speech, the chairman of Aradel Holdings, Chief Ladi Jadesimi, traced the history of the firm, noting that it had operated in the past three decades and pioneered several initiatives, including marginal field operations, one of which is the Okpele Field, which it has grown the daily production from about 1,000 barrels of crude oil per day to 13,000 barrels.

He said the company is also a fully integrated oil and gas company and also pioneered modular refinery initiatives with the first train of 1,000 barrels per day, which has since expanded to 11,000 barrels per day.