NNPC Makes Changes to Joint Venture Contract Awards
The Nigerian National Petroleum Corporation has revised the rules for foreign oil companies that are awarded joint venture contracts in the upstream petroleum sector. Multinational oil corporations must now use local companies for a minimum of 25% of the project. Furthermore, pre-qualification and commercial bids for joint venture projects must be carried out in Nigeria.
The Group Managing Director of the NNPC, Mr. Jackson Gaius-Obaseki, who stated this in Ulsan, South Korea, at the weekend, said it was high time the oil industry operators focused on issues that have long-term implication on the lives of Nigerians in general. Gaius-Obaseki in an address delivered at the official naming of Elf Petroleum Nigeria Limited Floating Storage and Offloading (FSO) - FSO Unity, said that one of the principal objectives of the Federal Government is to increase the proportion of local content in the implementation of oil contracts.
T he Group General Manager of the National Petroleum Investment Management Services (NAPIMS), Mr. Chris Ogiemwonyi, emphasized that pre-qualification for award of contracts in Nigeria will require that intending companies agree to increase local content. The Federal Government has an average 57 percent equity in six joint ventures, which account for the more than 90 percent of the country's 2.8 million barrels per day oil production capacity. The government has also set a target of achieving 50 percent local content inputs in the upstream sector by 2010. "This could be achieved by insisting that major part of the work - construction, fabrication and basic engineering is done in Nigeria; that Nigerians are engaged in positions where they can acquire technical skills or that the companies agree to strategically partner with indigenous Nigerian companies to achieve these objectives," Gaius-Obaseki stated.