NNPC, ICAN Agree On Local Content
 27th OCT 2006

The Group Managing Director of the Nigerian National Petroleum Corporation, Dr. Funsho Kupolokun, has hailed the Institute of Chartered Accountants of Nigeria for supporting its bid to domesticate operations in the oil and gas sector. He had agreed with the President of ICAN, Mrs. Kate Okpareke, who visited him in Abuja, that the society at large, should help develop a uniform reporting system for the sector to help boost its accounting system. He said with the new opportunities available in the sector, through the Nigerian content initiative, local entrepreneurs should rise up to take up the challenges to enable government realise the objectives of the policy.

The General Manager, Nigerian Content Division, NNPC, Mr. Emeka Nwankpa, had earlier said, “We have missed the targets for 2006, but we are on track for meeting that of 2010.” According to him, “Nobody in this industry will continue to run operations the way it has been. We are working with Brazil and Norway to transform into the nation’s engine for economic growth.” Although he could not give the actual level so far achieved, industry operators present at the conference were convinced that less than 15 per cent had so far been achieved.

Specifically, the Director, Department of Petroleum Resources, Mr. Tony Chukwueke, noted, “In the area of construction, only two per cent of oil and gas construction works are done in Nigeria, the rest are done abroad.” Furthermore, he argued that with about $12bn expenditure in the industry, the current local content levels called for serious concern and needed expedited actions. He said that while government might share part of the blame in not reaching the targets, he stated that the indigenous operators shared the largest blame, as most of them did not want to be actual operators but contract executors and oil block hawkers.

However, stakeholders in the industry called for sanctions against operators who do not conform to the objectives of the Federal Government’s local content policy.

A former Managing Director, Shell Nigerian Exploration and Production Company, Dr. Femi, Lalude, argued that giving incentives to boost the local content policy was not enough. According to him, “Incentives are not enough. There should also be penalties to weed out uncommitted operators and punish those who want to distort the policy or play games.” He observed, “But over the past 20 years, significant retrogression had taken place,” adding, “as long as we keep relying on outside entities, we will not make progress.” He further argued that under the current dispensation, the local content drive tended to create short-term opportunities rather than creating values. In view of the foregoing, he advised the regulatory agencies, the DPR and NNPC to “set measurable targets rather than to set high level targets that are not achievable.”

Okpareke commended the NNPC for its efforts in achieving the disappearance of queues at the filling stations, the transparent manner in which oil blocks were awarded, the Nigeria extractive transparent initiative and the establishment of mega stations all over the country. She solicited NNPC’s partnership in ICAN’s students special project, which aims at making tuition available to students in the educationally disadvantaged areas of the country. Okpareke also sought the support of NNPC in the production of ICAN study packs, development and production of petroleum accounting books and to endow a prize in ICAN examinations to encourage the students.

Article in The Punch

Back to Top
Post Your Feedback