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

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Abstract

The Nigerian petroleum industry is the largest industry and the most important generator of (GDP) in the state of West Africa. Although, the government has made significant financial investment in the petroleum sector of the nation, but it has not proven to be beneficial for most of Nigerians. The nation is unable to have local content in the industry, which accounts for 60% of the major activities that include exploration, drilling, production, well intervention and service provision; multinational companies are primarily responsible for controlling and managing these activities. Local contractors have been able to get awarded only the minor contracts. Nigeria faces several challenges in addressing the issue of local content development in the economy. These challenges include infrastructural development, political stability, and Good investment climate, project Financing, Transparency, High Educational Standards, Legal Policy, Resource Management, Research & Development, Fiscal Policy, Environmental Policy that impedes the targets that have been set by the Federal Government for its local content development in the industry. The purpose of this research is to determine the challenges that are faced by the Nigerian economy for local content development in the oil and gas industry. The research is also aimed at addressing the factors that are needed for encouraging Nigerians to participate actively in the petroleum activities while ensuring to meet all the standards that are needed for achieving substantial growth of indigenous capacity. The research is also focused on highlighting countries that have been successful in achieving success through local content development.

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CHAPTER 1: INTRODUCTION4

1.1 Background4

1.2 Research Aim and Objectives5

1.3 Research Questions5

1.4 Problem Statement5

1.5 Significance of the Study6

CHAPTER 2: LITERATURE REVIEW7

2.1 Nigerian Oil and Gas Industry7

2.2 Local Content Development in Nigerian Oil and Gas Industry7

2.3 Development Initiatives8

2.4 Local Content Policy in Nigerian Oil and Gas Industry8

2.5 Objectives of Local Content Development Policy9

2.6 Challenges and Prospects of Local Content Development9

2.7 Government's Efforts for Local Content Development10

2.8 The Way Forward10

REFERENCES12

CHAPTER 1: INTRODUCTION

Oil is considered as a blessing for all the economies all over the world and is of great significance for societal development. The development of petroleum and gas industry enables nations to achieve economic growth through creation of employment and brining improvements in the standard of living of the nation. The two most essential resources of the world are oil and gas. The development of petroleum industry is crucial for driving the global economy. Petroleum can be used for various products; furthermore it also serves as the world's primary fuel source.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.

All the stakeholders have been emphasizing on the need that a resource-rich economy Nigeria should have ...