CEOAfrica :: ARCO chief seeks local participation in oil, gas

The Group Managing Director of Arco Group Plc, Alfred Okoigun has urged African oil and gas producing countries to make up for the lost time in the areas of local capacity building, equipment maintenance and manufacturing.

In a presentation entitled; ‘Value Addition through Local Content in the Oil and Gas Industry in Africa during the African Petroleum Congress and Exhibition, also known as Cape VI in Abuja, he said the forum was an opportunity for him to share his experience of nearly 40 years in the oil and gas business with the participants.

Mr. Okoigun said Africa accounts for 7.6 per cent of total global crude oil reserves and 9.3 per cent of the world oil production. The continent is also responsible for 14.6 per cent of the world liquefied natural gas trade. All these, he said still make Africa to be of strategic importance in the global oil and gas business.

The Arco chief however wondered why African oil producers have just been satisfied with earning foreign exchange by selling oil and gas but have paid very little attention to using the God-given resources to maximum advantage as other countries outside Africa. He said the critical value additions in the oil and gas industry have always been local capacity building, the ability of each country to take control of equipment maintenance and even move up to the level of equipment manufacturing.

He cited the experience of countries such as Malaysia, Norway and Brazil as early starters in the implementation of local content development policies in the oil and gas industry and expressed the view that African oil producing countries had not done well in that regard.

Mr. Okoigun said right from the inception of oil prospecting and exploitation in Malaysia, its government had laid down the timeline for the International Oil Company (IOC) that was moving into the country’s oil industry to ensure that Malaysian nationals were trained to take over the duties of the IOC’s workers.

He said today, Malaysia is an exporter of expertise in the oil industry. “African oil producers are just at the starting line,” he lamented

In the case of Norway, he said the Norwagian government specifically issued guidelines and conditions such as formation of local companies, collaboration of the IOCs with the local companies and partnership between both sides in research and development (R&D). He said all the measures paid off for Norway’s local content development.

The Arco cheif said Brazil’s approach was to demand licenses for the local manufacturing of oil and gas equipment and the steps taken became a success story too.