Nigerian Content Development in the Oil and Gas Industry – Exploring the Spectrum of Assertive and Encouraging Modes of Implementation

Abstract

Abstract Application of local content policies and legislation in different aspects of the economy is driven by the desire of governments to create value addition in local economy. Significant among the benefits of the implementation of Local content requirements in the petroleum industry is the enhancement of indigenous companies' participation in the lucrative oil and gas business which used to be exclusive to few multinational companies. Beyond this immediate benefit of indigenous companies' participation as suppliers are other numerous opportunities such as domestication of technology, development of human capital and reduction in capital flight amongst others. A review of implementation of local content policies in various oil producing countries has shown that only few countries like Norway, Brazil and Malaysia have been able to achieve the full benefits of local content development implementation in all spectrum of the business with attendant spillover effect in the economy. Some other countries like Indonesia have not been able to achieve the full benefits despite decades of implementation of local content policies in the oil and gas industry. It is therefore critical to identify factors that made some countries to outstandingly succeed and why others have found it difficult to achieve desired result. This paper is a report of the research that was done on the evaluation of Nigeria Oil and Gas Industry Content Development (NOGICD) Act performance in the drilling sector of the petroleum industry since the draft legislation was conceived in 2001. It highlights areas of good performance and proposes strategies that will boost the realization of the full range of benefits obtainable through local content policies.