Technology Transfer and the Challenges of Local Content Development in the Nigerian Oil Industry

Abstract

With over fifty years of oil industry operation in Nigeria, the sector is still largely foreign-technology driven. The national government’s involvement has been classified into three distinct era: (1) The Era of Royalty (1956-1970) when government played passive facilitative role limited to the collection of royalties, rents, taxes and other forms of dues from the oil companies; (2) the Era of Shareholding (1971-2004) when petroleum was established as a strategic rational resource which meant that ownership, control and exploitation should be vested in the Federal Government and (3) the Era of Active Involvement (2004-date) in which government seeks greater indigenous involvement through the encouragement of indigenous participation in upstream operations (Marginal Fields Development Programme) and the internalization of input in the industry by increasing the quantum of composite value added or created in the Nigerian economy through the utilization of Nigerian human and material resources (Local Content Development Programme). The latter programme is thus an attempt at circumventing both the capitalist and the critical social theories of technology transfer and developing an indigenous technology initiative. Physical infrastructure and social macroeconomic environment, institutional framework as well as attitudinal changes are identified as critical to the successful Nigerianization of oil industry in Nigeria.

Keywords: Technology transfer, challenges, local content development, capitalist and critical social theories.