Sylva tasks IoCs on use of local contractors, cost of production
Minister of State for Petroleum Resources, Timipre Sylva, yesterday, urged international oil companies (IOCs), operating in the country to engage the services of local companies as a way of promoting local content.
Sylva, who spoke at the ninth Practical Nigerian Content (PNC) Forum, holding in Yenogoa, Bayelsa State, also promised that the Federal Government would end the smuggling of petroleum products out of the country.
Making reference to the 17-storey building of the Nigerian Content Development and Monitoring Board (NCDMB), which is being built by local firms, the Minister said: “I will like to ask multinational oil companies and their indigenous counterparts to take a cue from NCDMB, and engage more local contractors in various projects in the oil and gas industry.”
He also stressed the need to support and encourage the patronage of local contractors, and in turn, charged them to deliver premium services and support the Federal Government’s strategy of using local content to drive down the cost of crude oil production.
Sylva added that the move would increase the contribution of the oil sector to the Gross Domestic Product (GDP), and guarantee the security of oil production.
“We must not allow local content to become an excuse for cost overruns, slippages in project delivery schedule or shoddy jobs. As key stakeholders in the oil and gas industry, we must be aware that the entire country is looking up to our sector for increased revenue earnings to fund annual budgets and develop critical infrastructure,” Sylva told the participants.
He urged stakeholders to do everything possible to reduce the cost of per barrel oil production, stressing that the high cost of production often erodes Nigeria’s net revenue from crude oil sales and depletes the resources meant for development.
Sylva said: “We must therefore take practical steps to ensure that we curtail the various elements that contribute to the high cost of production.
According to him, the current administration had taken strategic steps to entrench local content implementation beyond oil and gas through the Presidential Executive Orders three, five and others.
He said the passage of the Petroleum Industry Bill; Increase of domestic refining capacity, and implementation of the amended Deep Offshore & Inland Basin Production Sharing Contract Act, remained a priority for the current administration.