Industrial Diversification in Nigeria’s Niger Delta Region

West Atlantic Shipyard Niger Delta
West Atlantic Shipyard, in the Niger Delta

AFRICANGLOBE – Successive Nigerian governments have promoted indigenous oil companies with legislative and institutional tools, and they are now flourishing: Amni, Shoreline, Midwestern, Seplat, Dubri and Continental.

One of the larger companies, Oando, has benefited from government pressure on Western oil companies to sell marginal fields to local companies.

“Marginal field tax levels are very advantageous, but the reserves are small. They are profitable barrels, however, which have kickstarted the company and allowed us to buy bigger reserves,” says Oando CEO Wale Tinubu.

But capital-intensive growth is not the ultimate goal.

Rather it is the multiplier effect linked to the development of the engineering, manufacturing and financing arms of the energy sector.

Shoreline’s purchase of a stake in OML 30 from Shell in 2012 brought in two local banks to the tune of $200m.

Nigerian banks are developing the skill and capital bases to compete with multinational banks.

Local engineering firms like Jagal Group are forming joint ventures to bring international capital and technology into the country.

Its Nigerdock manufacturing company builds offshore equipment for companies including France’s Total.

Oilfield services – marine logistics, supplies and security – are also boosting local employment and leading to upgraded skills.

A survey of 15 oil companies based in Port Harcourt and Warri points to substantial local linkages: 11 of them sourced more than half their goods from local firms, according to a March report from the UN Economic Commission for Africa.


By: Nicholas Norbrook