“The indigenous growth in the upstream in particularly is the encouragement of indigenous companies to participate in the upstream exploration in the production business in Nigeria. The Local Content Act itself is the encouragement of Nigerian companies that offer oil and gas services in the industry,” Orjikao, chairman of Seplat Petroleum Development Company, told CNBC Africa.
“Both of these have made tremendous progress, there’s still quite a lot of improvements to be made, but one of the things that the local content act has done [is] they encouraged quite a large number of Nigerian entrepreneurs to make investments in the oil and gas industry.”
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Orjikao added that Act, which aims to encourage the utilisation of local skills and resources, is now enables Nigerian firms to make investments and begin to understand the services required within the industry, as well as the ability to make their own contributions.
The Local Content Act, according to Orjikao, has been a major component of the growth of indigenous participation in the oil and gas industry. The need for growth in technical capacity will however be essential to the industry’s future flourishing.
“What we’ve also seen in the five decades or more of oil and gas business in Nigeria has also meant that quite a lot of Nigerians have built capacity either within or outside of this country. It is now left for Nigerian companies to go wherever there is expertise and [tap into that],” said Orjikao.
Seplat, which recently released its earnings for the first half of the year, showing a drop in gross earnings. The company however explained that it remains on a steady growth trajectory.
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“Growth by mergers and acquisitions is one of the major planks of our growth. I think we’re focusing on working to continue to add to our assets in terms of acquisition and we’re happy with the way things are turning out and we continue to focus on,” Orjikao added.
“Apart from growing our existing assets organically, and growing our gas businesses well, these are the three planks of our growth strategy.”