Nigeria has accomplished much in the oil and gas sector by moving from about three percent local content value in the oil industry to about 54 percent, and if indigenous operators do not arrest the growth path, the country may hit the 70 percent target it has set, writes JOSEPH INOKOTONG.
The Executive Secretary, Nigerian Content Development and Monitoring Board (NCDMB), Simbi Kesiye Wabote, early this month, invited editors to a breakfast meeting in Abuja during which he spoke on a number of issues touching on the country’s economy.
He told his audience that the past few months were eventful for the NCDMB with one of the landmark events being the ground-breaking ceremonies of the Dobiri Museum and Research Centre (OMRC) at Otuabagi in Ogbia Local Government Area of Bayelsa State and the NCDMB Conference Hotel Project at Swali, Yenagoa, Bayelsa State, performed on February 22, 2023 by former President Muhammadu Buhari, who was represented by the then Minister of State for Petroleum Resources, Chief Timipre Syla.
Former President Buhari struck the right chord when he said that the Oloibiri Museum and Research project would correct a historical oversight by erecting a befitting monument at the exact ground where commercial quantities of oil were first discovered in Nigeria and production began in 1957.
Firm commitments made by key industry stakeholders, notably Mr Mele Kyari, Group Chief Executive Officer, Nigerian National Petroleum Company Limited (NNPCL) and Dr Samuel Ogbuku, Managing Director, Niger Delta Development Commission (NDDC) and the pedigree of the project promoters – Nigerian Content Development and Monitoring Board (NCDMB), Petroleum Technology Development Fund (PTDF), Bayelsa State government and Shell Petroleum Development Company (SPDC), as well as its joint venture partners, led by the NNPCL – plus the carefully articulated governance structure, provide the perfect mix of industry capabilities that will ensure the OMRC is completed on schedule and becomes a cynosure of all eyes.
Wabote pointed out that the Conference Hotel Project is equally on a sure footing and fully sponsored by the NCDMB and executed by Megastar Technical and Construction Company Limited, the same indigenous firm responsible for the iconic 17-storey Nigerian Content Tower in Yenagoa.
Beyond the historical significance of the OMRC and the excellent business case of the CHP, the local content opportunities of both projects are quite enormous and would stimulate the economy for many years.
He disclosed that in March, he participated in another ground-breaking ceremony for a pipe manufacturing plant, which equally boasts huge local content prospects. The pipe mill is being developed by AS Energies Limited at Polaku, Gbarain, Bayelsa State.
It will manufacture Glass Reinforced Epoxy (GRE) and Glass Reinforced Plastic (GBP) pipes. The project, as significant as it is, fulfills the decade-old plan by the NCDMB to catalyse a pipe manufacturing plant in the Polaku, Gbarain area for which the board acquired and sand-filled 10.6 hectares of land in 2013.
He explained that when the project suffered investor apathy, “we re-designated the land as a gas hub and pressed on with our capacity development mandate by attracting astute oil and gas firms to co-locate their projects in the Polaku/Gbarain industrial area, joining the Shell Gas Gathering Plant, which produces more than one billion standard cubic feet per day of gas.
“New entities sprouting up in the area with the board’s support include Azikel Refinery (a modular hydro-skimming processing plant), Rungas LPG Composite Cylinder Manufacturing Plant and Eraskon, Nigeria’s lube oil manufacturing plant. Other planned projects for the gas hub are the Pressure Reduction and Metering Station by Shell Nigeria Gas and CNG and LNG mother stations by Total Support Energy Limited.”
Wabote noted that one of the prerequisites for manufacturing is affordable finance and that has been a scarce commodity in the Nigerian oil and gas space for ages. To address this herculean challenge, he said, “We recently introduced the $50 million NOGAPS manufacturing fund that will incentivise companies that would operate in the Nigerian Oil and Gas Parks (NOGAPS) and manufacture oil and gas equipment and components.
“This fund will be managed by the Bank of Industry (Bol) and is remarkably different from the Nigerian Content Intervention Fund (NCI Fund), which requires oil and gas companies to be contributors before they can benefit.”
Within the period under reference, he said, “We continued our support to sister African nations in developing and implementing local content policies. We received a delegation from the Ministry of Commerce and Mines, Republic of Guinea that came to understudy Nigeria’s local content policy. We also signed a memorandum of understanding (MoU) with the National Content Monitoring Committee of Senegal (ST-CNSCL), whereby we would provide strategic advice and guidance in local content implementation and other capacity development initiatives.”
He further stated that “our support to other African countries is anchored on the sectorial and regional linkage pillar of the Nigerian content 10-year strategic roadmap. We are equally preparing for the full implementation of the African Continental Free Trade Area (AFCFTA), hence our resolve to open new markets for Nigerian oil and gas service companies that have built capacities that are not fully optimised in our market.
“We also have robust relationships with other nations through the African Petroleum Producers Organisation (APPO), the Africa Local Content Roundtable and the Africa Energy Bank.”
The NCDMB Executive Secretary, having explained what the board has achieved so far, urged indigenous oil operators to comply with the Nigerian Content Act so as to make the industry robust for all stakeholders.
Wabote lamented the increasing number of the indigenous operators who seem to be working at cross purposes with the board’s Act by non-compliance.
According to Wabote, the NCDMB Act enables the board to protect indigenous producers, especially in the oil and gas sector, and decried the current state of indigenous producers’ lack of compliance, describing it as an act of sabotage.
“We fought for you but you now sabotage the oil economy,” he stated and urged those harbouring a sense of entitlement to desist.
He also noted that the indigenous operators try to save costs and care for profit more than the national interest.
He pointed out that “They want to be exempted from the Content Act. We have made it clear that the law is for all,” and equally said it is wrong for a local contractor to win a job and employ 90 percent expatriate experts, thereby causing job loss to Nigerians.
Wabote accused them of executing projects without getting approval and non-registration of their foreign workers in the expatriate ledger. “They find it difficult to pay the one percent levy stipulated by the Act. That is why the EFCC (Economic and Financial Crimes Commission) is now after some of them,” he said.
He further said Nigeria has moved from three percent local content value in the oil industry to 54 percent and warned that if indigenous operators do not arrest the growth path by capturing the regulatory system, Nigeria will hit the 70 percent target.
He, therefore, encouraged indigenous oil producers to comply with the board’s Act in their own interest and that of the nation.
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