Accessibility links

Officials Criticize Foreign Domination of Nigeria's Oil Industry - 2001-08-08


The Nigerian government is responding to complaints that its citizens are not directly involved in the lucrative oil industry, and don't get much out of it. A two-day national workshop sponsored by the government-owned Nigeria National Petroleum Corporation, NNPC, is trying to find ways to solve that problem.

Nigerians are continuing to grumble about the oil industry, they say they don't see enough of the benefits. A two-day seminar is underway in the capital, Abuja, to deal with their complaints. It was formally opened by Nigeria's presidential adviser on petroleum and energy matters, Rilwanu Lukman. Mr. Lukman agrees with the criticism. He said although the commercial exploitation of crude oil resources in Nigeria started as far back as 1956, the involvement of Nigerians in the industry is minimal. He urged the participants to see the workshop as a turning point.

"Let this workshop be an opportunity for the industry and all participants to articulate policies and propose strategies that will provide conducive climate for the production of local content. Such well structured policies will enable government to provide an enabling environment in the form of legislation and incentives for indigenous companies and international contractors desiring to establish a base in Nigeria for promotion of local content."

According to Mr. Lukman, the current situation constitutes a huge drain on national resources. He says Nigeria has not yet taken full advantage of its huge oil resources because of what he calls domination by foreign companies.

"The federal government has continued to make huge investment in the industry. However, of the over $5 billion budgeted for the industry, over 90% of this yearly expenditure escapes the domestic market in the form of some capital flight through technical services rendered by foreign companies and goods procured outside the country at the expense of indigenous and Nigerian companies."

Nigeria's multi-billion-dollar oil industry is controlled by foreign oil companies, even though the government contributes much of the funding under the joint venture arrangement.

For several years, Mr. Lukman served as secretary general of the Organization of Petroleum Exporting Countries - OPEC. He says Nigeria has suffered more than other countries at the hands of foreign oil companies.

"It is common knowledge that in countries like Algeria, Malaysia, Indonesia, Brazil, Oman, Norway and Venezuela, just to name a few, the situation is quite different. The level of development of local services and manufacturing companies in these countries is at an advanced stage such that they are even known to be net exporters of these goods and services."

The chief executive of the Nigeria National Petroleum Corporation, which organized the seminar, is Gauis Obaseki. He outlined plans to enhance local participation in the industry.

"It is our intention in NNPC to give full support and encouragement to true indigenous participation in the industry. Such participation must be in the form of enterprises and indigenous companies that are viable and sustainable so that they will continue to add value to the economy and create job opportunities for Nigerians. Attempts should be made to domesticate some of the fabrication works in our current and future projects. This will promote the expansion of these enterprises and workshops and encourage the setting up of new ones." Crude oil accounts for about 85 per cent of Nigeria's national revenue and 90 per cent of annual foreign exchange earnings. Most people here believe the economy is in deep crisis. So they and their government are looking critically at the flourishing oil industry. Economic observers say the government will continue its effort to balance the need for greater investment by foreign oil companies and the desire of its people for more say in the industry - and a greater share of the profits.

XS
SM
MD
LG