Today’s global economic narrative is centered on how to incorporate Small-Medium-Enterprises, SMEs, into the mainstream of economic growth. And in Nigeria, the economic blueprint; Vision 2020 provides the roadmap of how to tap the abundant but undervalued SMEs sector into a veritable tool for empowerment and promote capital retention for growth and development.
Aware of the possibilities of local content development and the importance of Small-Medium-Enterprise (SME), the Nigeria National Petroleum Corporation (NNPC), is harnessing the endless possibilities of SMEs especially in sustaining the country’s development and global trading competitiveness particularly in the energy sector. As a leading industry in Nigeria, the oil and gas industry under the management and regulatory authority of the NNPC is in a better position today to lead in nurturing, fostering and sustaining SMEs development in Nigeria through indigenization and local content government policies.
All the pork in SME development are not just limited to local sustainable economic growth, wedge against unemployment, standard of living increase, human resource/skill development, GDP growth, and overall value addition to global trade. As a path way for a sustainable Nigeria economic growth embracing SME in the overall economic growth of Nigeria is a sound policy that NNPC has embraced.
Theorizing government policy without practical application is impotent and a drag on policy execution and the application of a government policy without continuity, reaffirmation, re-engineering and re-evaluation is just as futile as is never existed.
Aware of the fact that in the past the upstream and downstream of the petroleum sector have been dominated by global traders, refiners and explorers there NNPC has undertaken a gradual but steady shift for further indigenization policy or some set-aside benefits to bring along the practical implementation of the local content policy.
To clearly demonstrate this seismic policy shift in a recent award of excess and crude, indigenous traders were highly favoured so much that 21 indigenous companies were awarded lifting rights against eight international oil traders; two foreign refineries; two subsidiaries of the NNPC and three countries, represented by their state-owned National Oil Companies (NOCs).
The 21 indigenous companies account for 630,000 barrels per day of crude oil during the one-year period, representing 57 per cent of the 1,179,000 barrels per day awarded to the 38 beneficiaries. A breakdown of the allocations showed that each of the 21 indigenous traders got an allocation of 30,000barrels per day.
These companies include; A-Z Petroleum Products Limited; Hyde Energy Nigeria Limited; DK Global Energy Resources Limited; Southfield Petroleum Limited (SPL), Aiteo Energy Resources,; Avidor Oil and Gas Company Limited; Azenith Energy Resource Limited; Barbados Oil and Gas Services Limited; Century Energy Services Limited and Crudex International Limited.
Other beneficiaries include, Eterna Plc; Bono Energy; Taleveras Limited; Mezcor SA; Sahara Energy Resources Limited; Tridax Energy SA and Tempo Energy SA; and Global Energy Acquisitions MOG, LTD.
The rest include, Ontario Trading SA; Voyage Oil & Gas Limited; Elektron Petroleum Energy and Mining Limited; Ibeto Petrochemical Industries Limited and Emo Oil and Petrochemical Company.
It is not surprising that a beneficiary investor, Chief Anslem N. Gbemudu, CEO/ Chairman of Global Real Estate Investors and financial services a United States Corporation owned by a Nigerian, with its indigenous subsidiaries Global Energy Acquisitions MOG LTD and Southfield Petroleum LTD, was ecstatic on the latest development of empowering local companies in the oil and gas sector.
“The NNPC has exhibited the highest possible patriotism and sense of inclusion by this policy shift which favours indigenous companies in the oil and energy sector. The potential of empowering our people cannot be quantified in terms of job creation and the multiplier effect of this decision. It is a welcome development that while the upstream and downstream sector is localised, we remain in the global sphere of influence,” Gbemudu stated.
It should be emphasised that the long term goal of this policy is not to build up briefcase traders that will flip transactions over to major global traders rather to encourage, develop, nature and sustain a global competitive SMEs trading, refining and exploration industry that will contribute to the overall Nigeria’s GDP.
As an indication that the winning firms are not ‘briefcase traders’ wholly indigenous but US incorporated companies like Global Energy Acquisitions MOG LTD and Southfield Petroleum have a long history of playing in the oil and gas sector. The firms in 2009 won the bid for the $400 million (N60 billion) gas treatment processing scheme at Utorogu and Oben in Delta State.
The gas treatment plan was designed to end gas flaring and provide dry gas for improved power generation in the country. Though officialdom and devious schemes have tended to slow down the project, it cast shadow on the doubts in some foreign and local quarters that the awards were political consideration rather than on sound economic decisions.
The current government liberal policy on indigenization, institutional, sound financial and monetary policies, breeds positive environmental conditions to foster and sure-up homemade global competitors that are sustainable and can compete in the global scheme.
Undoubtedly, as one of the institutions in Nigeria, we have come a long way and more to a point of priming SME’s to become global competitors is a daunting task because several variables that NNPC has no control over will have to be in sync with our vision 2020. “Political will” of the country’s legislating body, our banking institution and judiciary must all be in consonant in promoting SME development that can compete in the global market.”
Ibrahim is GM Communications, Nigerian National Petroleum Corporation.
