CRITICAL APPRAISAL OF INDIGENOUS PARTICIPATION AND CHALLENGES IN THE NIGERIAN OIL AND GAS INDUSTRY

ABSTRACT

The Local Content in the Oil and Gas Industry is a strategy developed to ensure indigenous companies participation in the oil and gas industry. It is aimed at retaining the funds that normally go away abroad as capital flight due to reliance on foreign goods and services. Hence, the Nigerian Oil and Gas Industry Development Act (2010) was enacted with a force of law to increase local participation, build local capacity and generally increase linkage to other sector of the national economy. It is pertinent to know that the research uses the doctrinal methodology to give a detailed analysis of legal rules found in primary sources. This research discovers certain factors militating against this laudable objective, which ranges from ineffective monitoring and control by the regulators, environmental factors, lack of funding, lack of infrastructural base, ill-equipped educational institutions and so on. Despite this, there has been increased indigenous companies participation in the oil and gas industry from less than 5 percent in 2006 to 31 percent in 2020 with an expected target of 70 percent in 2027. This research recommends the need for infrastructural development and special funding in the oil and gas industry. The work concludes that although there are numerous opportunities that the Local Content Act provides for indigenous companies but it has not been fully reflected on the national economy because of harsh operating environment.