Thursday, April 7, 2011

Local content Act not to nationalise foreign oil firms’ assets - FG .

Olusola Bello & Ameto Akpe, Abuja

Contrary to fears being nursed in certain quarters over the Nigerian Content Act, the Federal Government has said the Act is not designed to nationalise or indigenise foreign oil firms’ assets.

Diezani Alison-Madueke, minister of Petroleum Resources made the clarification yesterday in Abuja. The clarification incidentally came as Shell Petroleum Development Company (SPDC) announced it has awarded nearly $693 million worth of contracts to Nigerian Companies in 2010, representing over 94 percent of the total amount said to have been spent on contracts.

Austeen Oniwon, group managing director, Nigerian National Petroleum Corporation (NNPC) had also said the oil and gas sector is expected to be the recipient of an estimated $53 billion worth investment over the next four years.

These disclosures were made yesterday at the one-year Commemoration of the Enactment of Nigerian Oil & Gas Industry Content Development in Abuja.

Goni Shiekh, permanent secretary, Petroleum Ministry who represented the minister said, “I have repeatedly emphasised that the Nigerian Content Act is not designed to nationalise foreign assets or to completely indigenise the industry as it has been said several times. Rather, by domiciling services and builder local capacity, there will be certainty of supply for industry projects and support for life cycle operations.

“Government has taken a firm stand on this strategy mindful of the fact that the initial cost increase associated with Nigerian Content will result in savings in the medium term when the key inputs are available in Nigeria,” she said.

The minister who noted that the Federal Government was quite aware that these aspirations will not be realised simply by the enactment of an Act, added, “Rather, the route to success on Nigerian content lies in evolving a practical implementation framework that balances the interest of investors in the sector with our national interests.”

The minister stressed that, “Nigerian Content Development cannot be taken in isolation. In going forward, we must view Nigerian Content implementation as a vehicle for deriving maximum benefits in pursuit of our national development agenda, using the oil and gas industry as the launch pad. The industry must therefore redouble efforts at building in-country capacity to ensure that from the engineering, fabrication, procurement and installation stages, Nigerian companies and individuals provide services in such a way that youths gain knowledge to operate and maintain these plants to sustain their operating life.”

Mutiu Sunmonu, country chair, Shell Companies in Nigeria and managing director SPDC Nigeria Limited however noted that the thinking is that the Federal Government will release the appropriate regulations that would guide the full implementation of the requirements of the Nigerian Oil and Gas Content Act.

Oniwon, continuing stated: “We need to develop appropriate strategies that will guarantee value for money in our operations of our corporations. Furthermore, I enjoin the board to organise industry-wide trainings and workshops on the requirements of the Nigerian Content Act, so as to engender better understanding.”

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