More than $20 billion local investments in the oil and gas sector are under threat as a result of low oil prices. Following the situation, the relevant House of Representatives committee is planning to extend the implementation of the Nigerian content policy to the country’s manufacturing, telecommunication, aviation and construction sectors.
The Guardian gathered that before the fall in price of crude oil (when it was about $110 per barrel), indigenous firms purchased over $10 billion worth of divested assets from International Oil Companies (IOCs), largely financed by bank loans.The financial projections underpinning the loans have long been invalidated, and many indigenous companies struggle to service their debts. Consequently, oil revenues and profits have contracted sharply and companies, particularly in the upstream sector, battle to stay afloat.
Data from the Nigerian Content Development and Monitory Board (NCDMB) revealed that the average spend in the country’s oil and gas sector after the passage of the local content policy was more than $20 billion.