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Nigerian Senate Pushes for Replication of Successful Oil Sector Practices Seen in Other Countries

By Bashir Bello

The Senate Committee on Local Content has denounced the extractive operational practices carried out by international oil companies in Nigeria. This decision emerged following discussions between the committee and the management of the Nigerian Content Development and Monitoring Board (NCDMB). The NCDMB urged the committee to summon oil companies to elucidate their extractive approach lacking manufacturing content.
During the committee’s session with NCDMB officials, led by the Executive Secretary of the board, Engr. Felix Ogbe, the Senate Committee noted that major oil companies like Chevron engage in manufacturing Polypropylene alongside crude oil exploration in Saudi Arabia. This practice generates significant revenue for Saudi Arabia to about $ 6 billion annually, contrasting with Nigeria’s primarily extractive model. The committee, chaired by Senator Natasha Akpoti-Uduaghan, questioned why these international oil companies don’t utilize waste products from crude oil to manufacture necessary goods within Nigeria.
Additionally, the committee observed that the absence of a diverse operational model for international oil companies has led to the collapse of numerous local businesses, such as the Jubilee Syringe Plant in Bayelsa, due to raw material shortages. Despite the NCDMB’s assertion of lacking the power to enforce diversification, the committee resolved to summon the companies to explain why Nigeria is being transformed into an extractive zone rather than a manufacturing one, as observed elsewhere.
Chairperson Akpoti-Uduaghan emphasized the importance of not solely relying on crude oil extraction but also harnessing manufacturing potential to enhance economic value. Consequently, the committee pledged to summon the implicated oil companies to explore how practices observed in Saudi Arabia, the USA, and elsewhere could be replicated in Nigeria.

Despite these concerns, the committee acknowledged the NCDMB’s efforts, particularly its disclosure of a $50 million grant for research and an additional $20 million allocation for women in the oil and gas sector. Earlier, Mr Omomehin Ajimijaye, the NCDMB’s General Manager for Research, Statistics, and Development, highlighted the board’s commitment to driving Nigerian content growth through research and development initiatives. This includes establishing R&D centres of excellence in five universities across Nigeria and encouraging local researchers to utilize the $50 million R&D fund.