Shell to Award 90% of Contracts to Nigerian Companies — MD

Shell Petroleum Development Company of Nigeria Limited (SPDC) has announced plans to allocate 90% of its contracts to Nigerian companies, in a move aimed at deepening local content participation in the nation’s oil and gas industry. The commitment was disclosed by SPDC Managing Director and Country Chair of Shell Companies in Nigeria, Osagie Okunbor, during a recent stakeholders’ engagement session.

Okunbor explained that the decision aligns with the Nigerian Oil and Gas Industry Content Development (NOGICD) Act, which mandates greater involvement of indigenous firms in the sector. According to him, Shell has been steadily increasing its local contracting portfolio over the years, but the new target underscores a more ambitious approach to empowering Nigerian businesses.

“We have set a clear goal that going forward, 90% of our contracts will be executed by Nigerian companies,” Okunbor said. “This is not just about compliance with local content regulations—it is about building capacity, transferring knowledge, and ensuring that the benefits of our operations are felt more directly in the communities and economy.”

The Shell MD noted that the oil and gas industry offers significant opportunities for local participation, ranging from engineering and fabrication to logistics, catering, and environmental services. He stressed that Nigerian firms have increasingly proven their ability to deliver world-class services, meeting the technical, safety, and quality standards required in the industry.

In recent years, Shell has partnered with local firms in executing major projects, including the fabrication of oil platform modules, pipeline installations, and maintenance of offshore facilities. Okunbor said these partnerships have contributed to the development of a skilled workforce and strengthened the capacity of local contractors to compete globally.

Industry analysts see the announcement as a major boost for Nigeria’s local content agenda, particularly at a time when the government is pushing for greater value retention within the domestic economy. They note that such a high level of local contracting could stimulate job creation, boost technology transfer, and reduce the country’s dependence on foreign expertise.

Okunbor also addressed concerns about the ability of local firms to handle complex technical projects, noting that Shell has invested in training and mentorship programmes to bridge skill gaps. Through initiatives such as the Shell Contractors Development Programme, small and medium-sized enterprises (SMEs) receive technical support, business management training, and access to financing opportunities.

He further revealed that Shell collaborates with institutions like the Nigerian Content Development and Monitoring Board (NCDMB) to identify promising local contractors and provide them with the resources needed to meet industry standards. “We are committed to creating an enabling environment for Nigerian businesses to thrive. It is a win-win for both the company and the country,” he said.

The oil giant’s move is expected to have a ripple effect across related sectors. Increased patronage of indigenous service providers could boost local manufacturing, improve supply chain resilience, and encourage further investment in Nigeria’s oil and gas ecosystem.

However, industry stakeholders caution that achieving the 90% target will require sustained investment in local capacity building, infrastructure upgrades, and regulatory efficiency. They stress that local firms must also maintain high standards of service delivery to retain Shell’s confidence and secure long-term contracts.

Some contractors who have previously worked with Shell welcomed the announcement, describing it as an opportunity to expand their operations and hire more workers. A Port Harcourt-based engineering company CEO said, “This is a game-changer. If implemented as promised, it will create jobs and help Nigerian companies grow into global players.”

Shell has been operating in Nigeria for over six decades and remains one of the country’s largest investors in the oil and gas sector. In addition to its contracting policies, the company has implemented various social investment programmes in education, healthcare, and community development, further strengthening its ties to local communities.

The decision to prioritise Nigerian firms comes at a time when the global oil and gas industry is under pressure to operate more sustainably and deliver greater value to host countries. By awarding more contracts locally, Shell aims to support Nigeria’s economic diversification goals and foster inclusive growth.

Okunbor concluded by reaffirming Shell’s long-term commitment to Nigeria, despite challenges in the operating environment. “Our goal is to leave a positive legacy. We want to be remembered not just for the resources we extracted, but for the value we added to the Nigerian economy and the lives we touched,” he said.

 

With the new policy in place, attention will now turn to how effectively Shell and its partners can execute this ambitious local contracting agenda. If successful, it could serve as a model for other multinationals operating in Nigeria’s extractive industries, setting a precedent for deeper domestic participation in high-value projects.