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Nigeria: FG, Oil Majors May Clash Over U.S.$10 Billion Foreign Expenditure

WARNING: This is Version 1 of my old archive, so Photos will NOT work and many links will NOT work. But you can find articles by searching on the Titles. There is a lot of information in this archive. Use the SEARCH BAR at the top right. Prior to December 2012; I was a pro-Christian type of Conservative. I was unaware of the mass of Jewish lies in history, especially the lies regarding WW2 and Hitler. So in here you will find pro-Jewish and pro-Israel material. I was definitely WRONG about the Boeremag and Janusz Walus. They were for real.

Original Post Date: 2010-11-30 Time: 10:00:02  Posted By: News Poster

By Adeola Yusuf

Lagos – Abuja on Monday talked tough to major oil companies on the implementation of the local content policy, ordering them to retain at least $10 billion annual expenditure in the oil industry in the country by December.

The industry gulps $20 billion annually but only about $2 billion is retained in the Nigerian economy – the balance $18 billion is retained in the foreign country base of the oil companies.

Petroleum Minister Diezani Alison-Madueke stated at the Nigerian Content Consultative Forum (NCCF) in Yenogoa that it will no longer be business as usual for the oil majors.

And Executive Secretary of the Nigerian Content Development and Monitoring Board (NCDMB), Ernest Nwapa, said his agency will ensure strict compliance with the Local Content Act.

Also at the forum, Bayelsa State Governor, Timipre Sylva, announced that the host communities will this week sign a Memorandum of Understanding (MoU) with the Nigerian National Petroleum Corporation (NNPC) on the 10 per cent stake in the $10 billion Brass Liquefied Natural Gas (LNG).

Nigeria has a total 49 per cent stake in the project.

Sylva told journalists that the state government will represent the host communities at the MoU signing ceremony this week.

Alison-Madueke, represented by her aide, Emmanule Denunu, had earlier declared that there “will be an explosion of activities in exploration and production, pipelines, gas and power, refining and petrochemicals and marine transportation with enormous opportunities for indigenous participation.”

She promised the retention of over $10 billion out of an average annual oil and gas industry expenditure of $20 billion in the Nigerian economy, beside the creation of over 30,000 jobs and training opportunities, considering the scale of activities to be domiciled in Nigeria.

She recalled that during the recent inauguration of the governing council, she gave President Goodluck Jonathan assurances, in her capacity as the governing council Chairman, that the implementation of the Act within four years would result in developments.

These, according to Alison-Madueke, include the establishment of three to four new pipe mills to service the demands of the industry and other ancillary manufacturing plants for coatings, valves, fittings, and components.

They also include the development of one or two dockyards, as well as increased utilisation of existing shipyards for maintaining marine vessels.

She added: “Transformation of ownership profile of marine assets supporting industry activities from a current ratio of 20 Nigerian-owned vessels to 280 foreign-owned vessels to a more equitable ratio of 180 Nigerian to 120 foreign.

“Integration of indigenes and businesses residing in the oil producing areas into the mainstream of industry economic activity. Capture of over 50 to 70 per cent of banking services, insurance risk placements, and legal services supporting industry activities and transactions.

“I want to repeat that pledge here today and mandate the board to work fearlessly and steadfastly to ensure that we achieve these goals within the set timeframe.”

Alison-Madueke said as the investment plans for the next five years unfold in the wake of the imminent passage of the Petroleum Industry Bill (PIB) into law, there will be an explosion of activities in the sector, with enormous opportunities for indigenous participation.

However, she stressed, it is efficiency of preparations in the next few years that will greatly influence the ability to maximise benefits from these anticipated investments.

“Therefore, it is in our enlightened self interest for all stakeholders to collaborate for the purpose of realising these national aspirations.

“If we don’t build the capabilities to support compliance with Nigerian content, the current difficulties being experienced with contracting will increase and benefits to the national economy will elude us.”

By enacting the law and establishing a formidable organisation to implement its provisions, the government is taking the lead with the provision of the enabling environment and will continue making the improvements required.

The government will also ensure that international oil companies, as major operators of the Joint Ventures (JVs) and Production Sharing Contracts (PSCs) – which cover over 80 per cent of the industry’s producing assets – and their multinational service providers live up to their contractual and legal responsibilities towards achieving these goals.

The Brass LNG in Bayelsa State is planned to address militancy and also help shore up foreign exchange through the export of gas.

House of Representatives Gas Committee Chairman, Igo Aguma, has noted that the extent of work done showed that the Federal Government will ensuring that Nigeria is ranked among developed nations.

Aguma said he is “very, very impressed,” because the project is moving on according to schedule, and he is “elated” when he looks into the future and sees that in about three years’ time there will be a great impact on the economy of Bayelsa and across the Niger Delta.

The Brass LNG was incorporated in 2003 as one of the biggest green field projects expected to accelerate the growth and development of the Niger Delta.

Aguma noted that “the leap taken so far” showed that “obviously there is no going back in the project,” and by investing $10 billion, there is no way the project will fail, given Nigeria’s 49 per cent stake in it.

Original date published: 29 November 2010

Source: http://allafrica.com/stories/201011300394.html?viewall=1