Local Content Development in the Nigerian Oil and Gas Industry: Prospects and Challenges

Research Proposal1

Topic1

Introduction1

Background of Nigerian Economy and the Oil and Gas Industry1

Research Aim and Objectives3

Research Questions3

Outline of the Research3

Methodology3

Research Method3

Qualitative Research Method3

Rationale for Using Qualitative Method4

Reason for not using Primary Method4

Data Collection4

Secondary Method4

Data Analysis4

Data Analysis Process4

Sampling Method5

Research Philosophy5

REFERENCES6

Research Proposal

Topic

Local Content Development in the Nigerian Oil and Gas Industry: Prospects and Challenges.

Introduction

There is a critical role played by the oil and gas industry in the sustenance of the fuels and nation in the development and economic activities of Nigeria. The Oil and Gas Industry has been explained widely as the live wire of the nation and significant amount of literature has been written on the significance and role of this industry in Nigeria (Atakpu, 2007). Approximately 8 billion dollars are spent each year on the servicing of the industry in its operations like construction, seismic studies, Front End Engineering Design (FEED), Engineering procurement, fabrication, and Conceptual design.

The requirement of resource rich Nigeria to assume the activities of exploration, production and exploitation in the oil and gas industry and for harnessing the capability of this potential industry for generating more value-added, seems to become centre of attraction for its stakeholders. In Nigerian context, the need is equally expressed in order to address a significant amount of the average 18 billion dollar per annum spending in production and exploration and curtail the wave of capital flight which, during the years, has helped Nigeria in becoming a junior partner in the joint venture formed with the International Oil Companies (IOCs) (Atakpu, 2007, 13).

For a country like Nigeria which has an experience of four decades in the production and exploration activities of oil and gas and has proved to be recoverable reserves of around 37 billion barrels, Nigeria is still incapable of using the resource wealth as a way for poverty reduction and national development has been perhaps the biggest challenge faced by the successive administration (Nwachukwu, Ogaji & Probert, 2006, 1279). Such challenges have raised a concern in how Nigeria can gain maximum benefits from the operations in Oil and Gas industry by optimally using its local resources and competences as being practiced in Brazil, Venezuela, Indonesia, and Norway for instance. Even though, these countries have started production and exploration activities after remarkable success recorded by Nigeria in its efforts for growing local content in Oil and Gas industry.

Background of Nigerian Economy and the Oil and Gas Industry

The oil and gas sector of Nigeria plays a significantly essential part in the nation's economy with around 90 percent of the foreign exchange earnings which come from selling of crude oil. Nigeria has been the most populous and resource-rich country of Africa, with around 140 million of population. It consists of more than 25 ethnic groups and has been affected previously by inconsistent political instability, insufficient infrastructure, micro- economic mismanagement and bad governance (Atakpu, 2007, 13). Nigeria has around 19.2 billion cubic meters if natural gas and 36 billion of crude ...