Buhari Stops Local Firms From Lifting Crude Oil | Independent Newspapers Limited
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Buhari Stops Local Firms From Lifting Crude Oil

Posted: Jul 24, 2015 at 2:54 pm   /   by   /   comments (0)

President Muhammadu Buhari has reportedly directed that Nigerian owned oil companies be barred from lifting crude oil.

However, concerned insiders say the President’s directive was the first step in a larger plot to fizzle out indigenous companies which grew their operations under the previous administration due to the strict implementation of the Federal Government’s Local Content Law.

It was gathered that President Buhari approved about five international oil companies and traders to lift Nigeria’s crude oil under the crude oil term lifting contracts, which is usually done yearly.

Sources said no indigenous oil trading company including the 28 local firms that won contracts last year was being allowed to lift crude from oil platforms following the presidential directive.

Petroleum sector insiders said that the Nigerian National Petroleum Corporation (NNPC) confirmed the presidential directive to the local companies, which had in the last five years won contracts to lift crude following the expansion of the term lifting contract in order to accommodate more local companies.

I was gathered, however, that the NNPC did not reveal the identities of the foreign oil companies.

It was also gathered that at least 15 Nigerian companies with proven competence were technically shut out from lifting crude by the directive.

This, the insiders say, infringes on the Local Content Law and could lead to the demise of the oil companies.

Coincidentally, most of the companies affected are owned by people from Southern Nigeria, particularly the South-East and the oil-rich Niger Delta.

In 2014, the NNPC awarded crude lifting contracts worth about $52 billion to 28 Nigerian companies and 15 international companies, with then Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, explaining that the award of contracts to indigenous companies was done to encourage effective local participation in the industry.

She added that the decision was a deliberate policy of the Federal Government to encourage Nigerians to participate in the oil and gas sector of the economy.

It was not clear as at press time why the President preferred foreign oil companies to indigenous firms.

Spokesman for the NNPC, Ohi Alegbe, and Presidential spokesman, Shehu Garba, were not immediately available to shed light on the development.