N7.8 Billion Contract Award: SHELL Gets Praises *as Niger Delta Group expresses joy over local content compliance
By Jimmy Lace, Warri
THE Niger Delta Indigenous Movement for Radical Change has given Royal Dutch Shell a pat on the back for the recent award of #7.8Billion contract to a Nigerian firm, but vowed to visit hostility on oil majors that are not ready to obey the Local Content Act.
Shell had said in a statement that it has awarded $50Million (#7.8Billion) contract to S.C.C. Limited for the manufacture of line pipes.
But the Niger Delta Indigenous Movement for Radical Change that has been battling Shell over its alleged subversion of the Local Content Act hailed the award of the contract to a Nigerian firm.
The group also lauded the recent award of the Amukpe-Escravos Pipeline project to FENOG Nigeria Limited by Pan Ocean Oil Corporation.
In a statement signed by its President, Nelly Emma, John Sailor (Secretary) and Mukoro Stanley (P.R.O.), the group said the award of the contract by Shell to a Nigerian firm would boost the Local Content Act.
According to the statement, the region will be a peaceful place if local contractors are encouraged by oil majors, urging Shell to award more contracts to Nigerian firms rather than foreign firms such as O.P.I., Saipem, Daewoo and others.
The group wrote; “We want to hail Shell for the recent award of #7.8Billion contract to a Nigerian firm; this is good news to our group that has been fighting for the survival of the Local Content Act and transparency in the Petroleum industry. Shell and other oil majors will not have any problem with our group as long as they do not act in a way to undermine the Local Content Act. This gesture by Shell is a right step in the right direction, but this does not mean that we will not fight on, oil majors will not know peace in the region unless they do the right things.
“Our local contractors must be empowered by oil majors based on the Local Content Act and this is what we have been saying. But we are not going to fold our hands and watch oil majors frustrate our local contractors, the right things must be done, otherwise we will disrupt oil production in the region, we will continue to fight for a better deal for our local contractors and the people of the region,” the group wrote.
The group added; “We are also very elated by the recent award of the Amukpe-Escravos pipeline project to FENOG Nigeria Limited by Pan Ocean Oil Corporation, an indigenous firm. We want to commend Pan Ocean for this gesture aimed at encouraging the Local Content Act; others should emulate Pan Ocean because we want to see more of our local firms encouraged by the oil majors, this is the only way to boost the local content and enhance oil production in the Niger Delta region.”
Royal Dutch Shell had said it recently awarded a #7.8 Billion ($49.9Million) contract to a Nigerian firm, S.C.C. Limited for the manufacture of line pipes in an effort to boost local production capacity of a key pipeline making materials.
Shell said in a statement that it signed the contract with S.C.C. Limited in August and has worked with the firm to enhance its production process and capabilities such that it can now manufacture line pipes of varying diameters.
“The contract means line pipes are now available within Nigeria, saving money and time and developing the right expertise and creating jobs at the same time,” Igo Weli, Shell’s General Manager said, adding that it was studying the findings of a feasibility study it commissioned this year on the establishment of a second mill in Nigeria which will manufacture other types of line pipes.
Nigeria has been trying to promote the use of local content particularly in its oil and gas industry in order to develop local capabilities and create employment.
Shell said it uses local contractors and hires workers from the communities in which it operates in compliance with Nigeria’s local content law. The company said it was investing #237 million to procure and commission a laboratory for mechanical, metallographic and corrosion testing in Nigeria and will train local personnel.
The Niger Delta Indigenous Movement for Radical Change has consistently accused the Managing Director of Anglo-Dutch Oil and Gas giant, Shell, Mr. Mutiu Sunmonu of frustrating the Local Content Act of the Federal Government and had restated its vow for a total showdown with the company. The group had in a number of occasions threatened to expose the secrets of oil majors in the country, particularly Shell for its alleged subversion of the local content policy signed into law by President Goodluck Jonathan in April 22, 2010.