Nestoil Calls for End to ‘Lowest Bidder’ Rule, Highlights Impact on Nigeria’s Oil Sector Growth

Nestoil, Nigeria’s biggest Engineering, Procurement, Construction &  Commissioning(EPCC) company on Monday said that the principle of ‘lowest bidder’ which has been taken advantage of by those he described as ‘briefcase’ contractors was hobbling the growth of the oil industry.

Speaking at the ongoing Nigeria Oil & Gas (NOG) Week in Abuja, the Group Managing Director of Nestoil, Dr Ernest Azudialu-Obiejesi, argued that for Nigeria to be able to develop capacities in the industry and begin to export those capacities, it must have a credible contracts bidding process.

He spoke on a panel themed: “Exportation of Local Capacity: Maximising Regional Opportunities“ during the Nigerian content session seminar by the Nigerian Content Development Monitoring Board (NCDMB).

Azudialu-Obiejesi stated that to ensure those capacities in terms of human resources, capital and equipment are exported to other countries, the current setbacks in terms of how laws are enforced to protect the local companies, must be tackled.

“We have also seen that one of the reasons why the local companies are not doing very well is because they don’t have what we call a good bidding process. This is a bidding process where everybody says it’s the lowest bidder.

“And there are a lot of people who are briefcase contractors who don’t have capacity, but they will tell you they have connection. And because of that, they go and bid for jobs they cannot do at the lowest prices. So these things have to be checkmated.

“If we checkmate those things, it’s going to help the local content capacity, so that when you are bidding for a job in the oil and gas industry, you compare apples to apples and not apples to oranges, so that people of the same technical capacity can bid for a job,” he stressed.

He further argued that laws that are enacted must be enforceable to ensure that they can benefit indigenous firms.

In an interview on the sidelines of the programme, he pointed out that Nigeria can begin to export capacities in the oil and industry when it is able to entrench current opportunities efficiently.

He explained that the African Continental Free Trade Zone Area (AFCTA) when fully implemented will help break all the current barriers inhibiting trans-border businesses.

The GMD said that the company  has grown from a service company in 1991 to an oil producing company now, becoming one of the biggest pipeline companies in Nigeria and serving the International Oil Companies (IOCs).

“Today, one of the biggest lines that Shell has used in Nigeria for the past 20 years was built by Nestoil. Apart from that, we built so many pipelines for the IOCs, both for Chevron and Mobil.

“Nestoil has grown from pipeline to dredging, from dredging to major fabrications for offshore companies. Also it has gone into dredging and has gone into even aviation services. We give helicopter services to so many oil and gas companies today in Nigeria, ” Azudialu-Obiejesi added.

He stated that the company now has a dry dock facility in Port Harcourt, stressing that it remains one of the biggest in civil works, mechanical works, and has grown capacities to even export the experiences and the technologies it has acquired to other countries.

According to him, some of the people trained by Nestoil, are now captains of industry and have gone to other companies to set up businesses of their own.

Earlier in his opening remarks, Executive Secretary NCDMB, Felix Ogbe, said the seminar was an excellent platform to provide clarity, expositions, tips, and guidance to industry practitioners on several issues in the Nigerian local content space.

He pledged that the board will evaluate current policies and guidelines to encourage the development of indigenous capabilities and guarantee that the policies and guidelines are not misused, misapplied, or misinterpreted.

“Let me use this opportunity to reiterate the board’s unwavering dedication to implementing the presidential policy directive on local content compliance.

“The presidential policy directive, when fully implemented, will significantly impact Nigeria’s oil and gas industry, grow our economy, ensure cost competitiveness and attract further investments to the industry and the country at large,” he added.

He explained that the board was also determined to establish an enabling business environment that will attract more investors to the country’s oil and gas sector.

Emmanuel Addeh

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