Building Local Capacity as Leeway to Surviving Low Oil Price Regime

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  • Building Local Capacity as Leeway to Surviving Low Oil Price Regime

The challenge of low crude oil prices is seriously affecting the profit of oil companies and revenue of the Federal Government, even as the petroleum industry remained the largest sector and contributor to the Gross Domestic Product (GDP) in the country.

Consequently, some companies in Nigeria have reduced their respectives workforce, cut capital expenditure, suspend or cancel projects.

Patronage of indigenous firms to in the service segment, which were hitherto done by foreign companies are still very low, as over 60 per cent of the major activities such as exploration, drilling, production, well intervention and service provision remain primarily controlled and managed by multi-national oil companies.

Expectations ranging from infrastructural development, political stability, good investment climate, project financing, transparency, high educational standards, legal policy, resource management, research and development, fiscal policy, environmental policy are some of the factors impeding the full participation of indigenous operators in the sector.

As the falling oil price continues to reduce revenue and adversely raising the cost of getting foreign services, indigenous operators like Solewant Nigeria Limited are insisting that building local capacity in the country is the way forward

With the commissioning of its pipe/metals coating facility in Port Harcourt, the country will be able to retain over N50 billion that would have been to get foreign services.”

Speaking at the event, Rivers State Governor, Nyesom Wike, assured of his administration’s commitment to make the state an investor friendly environment, adding that the state government has been supporting oil and gas investment as part of efforts to attract interested companies.

He noted that the administration is committed to pursuing with great vigour concerted efforts aimed at improving the lives of the people and create jobs.

Wike who was represented by the Commissioner for Energy and Natural Resources, Chukwu Shedrack, explained that the state is peaceful and safe for investments, while calling on youths of Alode-Eleme-Onne community to shun violence and embrace peace, “presently, the state government has extended the oil branch to cult groups in the state in order for them to shun violence.

He expressed confidence that the project was conceptualised to save pipeline owners and provide jobs for the youths that are unemployed in the state, adding that the investment is an assurance that private investors can invest in the state.

Chairman of the Solewant Nigeria Limited, Prof. Sylvanus Ebohon, cited backward integration as one of the solutions to the challenges facing the nation in the oil and gas sector, adding that if the nation aspires to drive excellence, there is need to prove value addition in gas project.

He explained that the inauguration is a crystallization of the immense support of the Hon. Minister of State for Petroleum, Dr. Ibe Kachukwu, who encouraged the company to be a key player in the oil and gas sector with its latest technology in pipe coating engineering.

Ebohon stressed that the desire of the company to take a leadership role in the critical aspect of high-grade pipe coating of international standard which it started in 2004, adding that the concept was given life with technical collaboration with Kema Coating of Canada; therefore the drive for excellence has been deliberate.

He added: “This plant is the product of the Local content philosophy of the Federal Government and the new driving principle in the Oil and Gas Sector. We intend to prove that value – addition in the well-being of our economy is a task that must be done through this world – class project. We, therefore, invite the international oil companies and other construction firms to take advantage of the unique and world-class technology that Solewant Pipe Coating Plant offers the Nigerian industrial environment.”

About the Author

Samed Olukoya
Samed Olukoya is the CEO/Founder of investorsking.com, a digital business media, with over 10 years' experience as a foreign exchange research analyst and trader. A graduate of University of East London, U.K. and a vivid financial markets analyst.

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