Rise of best practice local players in Nigeria’s oil and gas industry (2)

dangote-oil-refineryAs indicated by the Executive Secretary of the Nigerian Content Development and Monitoring Board (NCDMB), Mr. Ernest Nwapa, many Nigerian companies have gained expertise and improved their capacity since the law was enacted, and as he mentioned, “For the first time in our history, the Nigerian flag is flying high in the oil sector, especially in technical services and engineering.’’

This brings to fore the persisting NPDC allegation of inefficiency, against Neconde. The AfricanoilandGas Magazine, the leading industry magazine, expresses that Nestoil, the financing and technical partner in the Neconde partnership, “has been an oilfield contractor for most of its decade plus life, and was involved in the construction of a major crude export pipeline for Shell.  Its “baptism of fire” as an oilfield operator is the drilling of a well in Oriri marginal field, a percentage stake of which it acquired in 2011.”

In summary, Neconde has the technical capacity to operate and deliver on the assets, perhaps better than NPDC can offer at this time. Again, there is also the possibility of wealth creation which would be beneficial to more Nigerians in respect to technology transfer and job creation.

To also make accusations that Neconde seeks to place national assets in a few private hands is ironic, especially as NPDC is well-known in the industry for its management which benefits from contract awards as operators of OML.  On close study, it appears NPDC’s little impact in the increment of production and efficient management of Nigerian oil wells and facilities, makes it dread that its incompetence might become even more glaring, should Neconde take full responsibility of OML 42, hence the recent mudslinging.

It is imperative to note, that NPDC’s clamour for a reversal of the OML 42 award might not be in the best interest of the nation, and it should be not be allowed to undermine the possibilities and success achievable by private investors.

NPDC must not be left to use its position as a “national” auxiliary to intimidate a legal company which underwent a transparent screening for a business deal, so that the continuous rise of best practice local player in the Nigerian oil and Gas industry, can bring about the awaited revolution.

Also, this might be the time to examine the rot and inadequacies which is prevalent in NPDC, and review the resulting effect on the economy, from the expansion of indigenous technological expertise to the creation of new and local financing opportunities in Nigeria.

In conclusion, putting aside the absurdity of the logic being presented by NPDC against Neconde, and its strike action which incapacitated the whole nation, a closer look at the inadequacies of the NNPC subsidiary against local players in the oil industry could derive what the country needs to ensure best practices. This would in effect secure more for the country’s assets, which before now had been under utilised under the watch of NPDC.
• Olaleye, an oil and gas expert is based in Abuja.

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1 Comment
  • Rose

    Of course a business in the private sector is going to say it can do a better job than the public sector. It has a lot to gain from the NNPC falling apart. But until it can prove that, it’s just a load of hot air.