An estimated $8 billion is spent annually on outsourcing of services in the oil and gas industry in Nigeria in operations such as fabrication, engineering procurement, construction (EPC), Front End Engineering Design (FEED), conceptual designs and seismic studies. This figure is projected to hit $15 billion within the next few years (Business Day, 2008).
Regrettably, despite these huge sums of money spent in servicing the industry, only a very little proportion of the accruable profit is spent in Nigeria. Majority of the amounts are repatriated abroad, where most of the equipment is manufactured; and providing employment opportunities for citizens of other countries.
The major reason for this situation has been attributed to low local content (LC), which is a situation where most of the service contracts are awarded to foreign firms because local indigenous firms lack the requisite skills, technical expertise, manpower and production capacity and capability to compete favourably.
The passage and assent of the Nigerian Local Content Policy is an expression of the desire of the Federal Government of Nigeria to ensure that companies owned by Nigerians actively participate not only in the oil and gas trade of Nigeria but in all technical aspects of the Nigerian economy.
The entire essence of the new law is to increase indigenous participation in the oil and gas industry by prescribing minimum thresholds for the use of local services and materials and to promote the employment of Nigerian staff in the Industry.
Along with the Cabotage law in the maritime industry, which seeks to restrict the use of Foreign Vessels in Domestic Coastal trade to promote the development of indigenous tonnage and to establish a Cabotage vessel financing fund and for Related Matters, Nigerian investors can better harness the opportunity available in the oil and gas industry in Nigeria and perhaps start providing vessel, barge and tugboat leasing services required by the industry.
Haulage of crew and equipment is an essential part of an oil and gas operation which requires the use of barges, tugboats and vessels.
A Barge is a flat – bottomed boat built mainly for river and canal transport of heavy equipment’s. Some barges are not self-propelled and need to be towed or pushed by towboats. In the oil and gas industry, they are mostly used in swampy operation for the haulage of crew and equipment.
A tug boat is a boat that maneuvers vessel by pushing and towing them. They are usually used to tow barges.
A vessel is a craft for travelling and transporting goods on water and is usually larger than boats and barges.
Providing equipment leasing services in the oil and gas industry in Nigeria is surely a viable business but the investor needs to be armed with the right information to succeed in the business.
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