Local Content, Jobs, Youth: Business Priorities
Local content, job creation and youth entrepreneurship should be viewed as core business activities.
Shell is one of the oldest energy companies in Nigeria and has played a pioneering role in the country’s oil and gas industry throughout its history. Nurturing local skills, talent and contracting capacity has been a mainstay of our business for many years.
For us, local content starts with our own workforce. Our two largest companies in Nigeria together employ over 4,000 people, 95 per cent of whom are Nigerian—including the majority of senior executives. We are a largely Nigerian organisation run primarily by Nigerian people and this is reflected throughout our supply chain. Shell Companies in Nigeria awarded more than 90 per cent of their contracts to Nigerian companies in 2013.
Of course, local content is not a discretionary field of activity. Legislation sets challenging targets and there is a strong social performance imperative. Our license to operate depends heavily on our ability to bring jobs, contracts and other tangible benefits to the communities in which we operate.
As in other technical industries in which skills and capacity take time to mature, we occasionally face tensions between regulation, community expectations and business reality. However, we see the development of local content as first and foremost a business strategy and a source of competitive advantage. We best serve all our stakeholders when we turn resources into jobs and opportunities as well as revenues.
The development of Nigeria’s offshore oil and gas industry over the last two decades stands as a shining example of what can be achieved through long-term partnerships between international companies and national resource holders. The Shell Nigeria Exploration and Production Company (SNEPCo) was formed in 1993 to develop Nigeria’s oil and gas resources in the Bonga field, 120km offshore in the Gulf of Guinea. This was a new frontier for the country’s energy industry and there was virtually no local skills base in place.
SNEPCo began producing at Bonga in 2005, increasing Nigeria’s oil capacity by 10 per cent. Local companies played a key role at every stage of the project’s development, with some of the key structures and components built and assembled in Nigeria. The project helped create the first generation of Nigerian oil and gas engineers with deep water experience and by 2013 some 90 per cent of core offshore staff were Nigerian. Bonga has also stimulated the growth of a range of support industries such as maritime services, materials manufacturing and maintenance, floating hotels and helicopters. Today, Nigeria boasts a world-class offshore oil and gas industry.
A similar impact has been evident onshore with the Gbaran Ubie integrated oil and gas project, through which Shell is developing several fields originally discovered in the 1970s but never fully utilised because they contained mainly gas. More than 140 Nigerian companies have provided services including construction, pipeline design and manufacture, vessel fabrication and logistics. Shell has also facilitated community-driven projects to provide drinking water, construct schools and health centres and connect several communities to the electricity grid for the first time. Gbaran Ubie has stimulated economic growth and helped raise living standards locally. It has also created a legacy of skills and capacity in complex integrated gas projects, which will be vital to meeting Nigeria’s electricity supply challenges in the years ahead.
“We do not see investment in youth as an optional extra.”
Our industry depends on continual innovation. For this reason Shell has a long history of supporting education in Nigeria. We award more than 2,000 scholarship grants every year and invest in the wider development of scientific disciplines and research through the endowment of professorial chairs and sponsorship of academic centres of excellence in fields such as geosciences, petroleum engineering and environmental management. Over 50 years the programme has offered education to more than 14,000 Nigerians. LiveWIRE, our flagship youth enterprise development programme, has provided access to training, business development services and start-up capital to more than 5,000 young entrepreneurs in the Niger Delta since its launch in 2003.
Again, we do not see investment in youth as an optional extra. With a population of over 165 million, Nigeria is already the largest country in Africa and the world’s seventh most populous. The future trajectory is sharply upwards. According to UN projections we could have the world’s fourth largest population by 2030 and potentially surpass the United States by 2050. Our burgeoning youth are the country’s most important resource but also the most powerful incentive for Nigeria to make the most of its energy potential. We have a strong mutual stake in making the most of these opportunities together in the years ahead.