The Nation Newspaper

Tag: ‘Local content

  • Apostle of local content

    Apostle of local content

    Dr. Okezie Ikpeazu wants to make Abia State people follow the path of the indigene. He is showcasing Made in Aba products in the United States. Nor is he leaving China behind where he travelled to propagate the idea that citizens of his state have rival wares. He has become the apostle of local talent.

    His is the ownership society. As he stood last week at the Bankers’ House in Lagos to deliver the annual Hallmark lecture, he was quick to point out that the gray local suit with white stripes he wore was made locally, with “Proudly Aba” embossed on its left sleeve.

    “I don’t know Gucci. I don’t know Luis Vuitton,” he quipped as he kicked up his right foot to show that his pair of black velvety shoes was made locally and he knew the maker.

    The dream is still a long way coming, but I have always maintained that the talents in Aba are too numerous to make them purveyors of substandard goods. Gov Ikpeazu spoke about standardisation and how to make the electronics, garment and footwear not only of good quality but also a big source of foreign earnings.

    In concluding his speech, he referred to Moses’ dialogue with God when he was assigned to confront Pharaoh. God asked him, what’s in your hand? He had a staff with which he bested Pharaoh’s snakes, beat the enemy and crossed the Red Sea. This theme of Aba and local content will engage this page in the near future.

     

  • Firm harps on local content

    Tranos Contracting, an indigenous diversified technology company, has said it is producing innovative solutions that will satisfy the needs of its consumers, using about 90 per cent of locally-sourced materials.

    Its Managing Director, Jude Abalaka, stated this during a tour of their factory.

    He said in an attempt to  domesticate the firm’s production processes without devaluing its outputs, quality materials are sourced from other indigenous companies, such as West Africa Metal Product Company.

    He said: “We are looking internally, our philosophy is to build an organisation based on knowledge that gives us a lot of flexibility. We are a Nigerian diversified technology company and we focus on adding value to people by coming up with innovative solutions either to existing problems or even trying to improve on what already exists.

    “I would put our local content somewhere around 90 per cent. Our major production material which is the sheet metal is sourced locally and our major sheet supplier is WEMCO, they have a factory in Ibadan. I think these sheets would probably account for 60 or 70 percent of the materials we use.’’

    And for our electrical assemblies, such as cables, we get them from indigenous firms like Coleman Wires and Cable metal. The only major things we import are accessories such as engines and locks or minor electrical components such as fuses but everything else is locally sourced.”

    He said the company produces energy distribution devices and accessories, power generators, changeover switches and isolators, protection devices, power distribution boards, control and automation panels, as well as steel and plastic enclosures.

    “On an ongoing basis, we are always thinking and trying to develop new products. Even as we speak, we have a number of products that are at various stages of development. And we are looking to build things that would not only be comparable to some of the things you find anywhere in the world but even surpass them.

    “The reason behind our efforts is to build ourselves to a point where if you take what we have built and compare with what someone else has imported, you would find out that ours would actually be better. That is our focus. On some levels, maybe we have not gotten there yet but it’s a continuous drive, it is not a destination.

     

  • ‘Nigeria saves $7b from local content law application’

    The Local Content Act signed into law in  2010 have begun to yeild fruits  as over $7 billion has accrued to the nation’s treasury since the implementation of the Act and the oil industry has become more viable, the Oil and Gas Trainers’ Association of Nigeria (OGTAN) President, Dr. Mayowa Afe, has said.

    Because of the increased participation of Nigerians in the oil and gas industry, he said, following the enactment of the local content, the nation was able to save the said sum of money in the last seven years of the existence of the Act’s implementation through retention of value in-country.

    Afe explained that before the introduction of the local content law, the country was spending about $20 billion yearly in the industry, which did not reflect on the industry. Nevertheless, we can now categorically say from the data that was released by the Nigerian Content Development and Monitoring Board (NCDMB), that over $5billion is being retained in the country.

    He said: “We are already making a lot of progress. We saved nothing less than $7billion through the local content just by signing the local content bill into law.”

    He also said the government was committed to attaining 70 per cent indigenous capacity by 2020, adding that one good thing that has happened to the oil and gas industry was signing into law of the local content bill.

    Afe, who spoke with The Nation on telephone assured that Nigeria would soon attain 90 per cent capacity and that indigenous players would take the centre stage in the nation’s oil and gas industry operations as obtainable in Brazil.

    On training, Afe reassured of the association’s commitment to projecting indigenous trainers, adding that the association would not relent in projecting them and to let Nigerians understand that we don’t need to go abroad for trainers.

    “We do don’t have to spend dollars to train people in America and other countries of the world. We need these trainings here in Nigeria and we need to really patronise the trainers,” he said.

    The association would also ensure that the local trainers acquired more global certification, and train more Nigerians in courses that could be globally accepted so that Nigerians can go and work in other parts of the world where oil and gas had been discovered.

    “When we have such solid certification, Nigerians can go and work in other parts of the world including the African countries where we already have oil and gas,” he added.

    As part of plans to achieve this, the association said it was  engaging stakeholders, including the Ministry of Petroleum Resources, the Nigerian National Petroleum Corporation (NNPC) and all the International Oil Companies (IOCs), adding its noteds to let them know the quality of capacity we have in country.

    “We have already made it known to them that there were a lot of fabrication yards in Nigeria, so they don’t need to go and do all the fabrications of floating production, storage and offloading (FPSO) vessels outside the country,” Afe said, adding that before the end of the second quarter of the year, we would see the first FPSO built by Samsung here in Nigeria.

    “So, we really need to let them (IOCs) know the capacity and capabilities we have in-country. We will begin to expose our people. We should be able to patronise them and from there we would begin to sponsor our people to participate in trade shows and expose the quality of people we have in-country,” he added.

    The Executive Secretary, NCDMB, who Simbi Wabote spoke at the inauguration of the new national executives of OGTAN, charged them and other members to develop a minimum standard for training facilities for their members such that trainees would learn in a very conducive and safe environment.

    He said the training programmes must lead to internationally recognised certification such that trainees could use it for gainful employment. He advised the Association to embark on creating an effective marketing strategy for the courses they offer, adding that the courses should also come with appropriate mix of classroom, online, practical, and other forms of learning formats so that the trainees could come off with a worthwhile learning experience.

  • Local content impaired by non-passage of PIB

    Local content impaired by non-passage of PIB

    The Nigerian Content Act is being impaired by the non-passage of the Petroleum Industry Bill (PIB) that was supposed to be a veritable complement to the local content and also ensure the success of vision 2020, the Managing Partner, J.O Adidi & Co, John, has said.

    The PIB was  designed  to complement the Nigerian Content Act in 2010. It was meant to drive the vision of the Nigerian Content Act. However, the Nigerian Content Act has since been passed while the PIB, which should complement it is yet to see the light of the day.

    Local content is about local capacity development and transfer of technology to ensure that Nigerians participate effectively in the oil and gas industry and also enable new investments to come in.

    John Adidi said it was only when new investments come in and jobs are created that local content could be effective. According to him, these new investments are not coming in because of lack of clarity and certainty in the laws guiding the oil and gas operations.

    As a result, local content was being disadvantaged. He recalled that PIB started in the year 2000 when the Nigerian Oil and Gas Sector Reform Implementation Committee (NOGIC) was inaugurated.

    According to him, that committee produced what was called the National Oil Policy. That policy covered all the aspects of the petroleum sector including the upstream, downstream, gas, petrochemicals and many others.

    Adidi said several versions of that bill were produced including Senate version and the inter-agency  version; at least about five different versions of the bill were produced blaming it on the general problem of the country.

    Speaking with The Nation on telephone, he said the PIB needed to recognise Nigerians that should be protected against the operations of the international oil companies (IOCs). Owners of marginal fields need to be protected because they don’t have the financial muscle, he said, adding you cannot be talking about local content when you cannot encourage the development of your little players.

    He stated that the only way that can be done is to give marginal field players some little incentives over and above what are given to the IOCs. “So they need the protection of the law and that law is not there. Local content cannot be said to be effective when local players are not there and the law that should give them that muscle has not been passed.

    “Let there be laws because oil and gas is a long term investment. You need the laws so that Nigerians who have the money seeing the laws and incentives, opportunities, and the environment, will venture into oil and gas and own oil blocks,” he added.

  • Group seeks training to boost local content

    Group seeks training to boost local content

    • To inaugurate NEC today

    The Oil and Gas Trainers Association of Nigeria (OGTAN) has said proper training of Nigerian workers is the only  guarantee toward local content development in the oil and gas industry.

    The OGTAN’s President, Dr.   Mayowa Afe stated this, adding that domestication of oil and gas trainees would save the country billions of dollars and create more jobs opportunities for Nigerians

    Mayowa gave the advice in a statement issued and signed by the OGTANS’ Director of Media Communications, Mr. John Itua, in Lagos to sensitise stakeholders on the forthcoming inauguration of the OGTAN’S national executive council slated to hold on April 13 at Eko Hotel and Suites.

    The Inauguration will have the Executive Secretary of the Nigerian Content Development and Monitoring Board (NCDMB) as the Guest Speaker and he will speak on the topic: “Increasing indigenous participation and capacity development in the oil and gas industry – The journey so fa.r”

    The OGTAN chief said: “There is need to standardise training to get more value; training should be domesticated to handle issues that are peculiar to our environment and generate adequate human capital for our oil and gas industry and even enough for export because training is key to local content development.

    “We want to discourage portfolio trainers – people who just walk into companies to organise trainings; invite trainers and after that, walk away,” he said.

    He said OGTAN’s vision is to develop a Nigerian oil and gas training business group that interfaces with the operators, international organisations and government, to ensure a total human capacity development in the industry and the attainment of the Nigerian Content goals. OGTAN was formed with the support of the Nigerian Content division of the Nigerian National Petroleum Corporation (NNPC) to address the manpower development needs of the Nigerian oil and gas industry.

    “If the majority of oil and gas trainees is done locally in Nigeria, it would address issues of foreign exchange challenges confronting the sector.  The issues of foreign exchange should be addressed through domestication of activities.

    “Government agencies, institutions, international oil and gas companies should partner with OGTAN to invest in developing trainers in-country,’’ he said.

    Mayowa noted that OGTAN which is the independent umbrella group of training service providers in the oil and gas sector was established by the Nigerian Content Development and Monitoring Board (NCDMB) Act of 2010.

    According to him, OGTAN represents the Education and Training Sectoral Group of the Nigerian Content Consultative Forum (NCCF) under section 58 of the NOGICD Act 2010, with the purpose to build local human capital capacity in the Nigerian oil and gas industry.

    Mayowa said the association acts as a business group that interfaces with operators, international organisation and the government, adding that national executive council will be inaugurated in Lagos at Eko Hotel on April 13.

    “The Executive Secretary of the NCDMB, Simbi Wabote, an engineer, will be presenting the keynote paper at the event. The Executive Secretaries of the PTDF and NCDMB will be honoured and decorated at the event as strategic partners of OGTAN. This is in recognition of their roles in human capacity development in the oil and gas industry in Nigeria.

    “OGTAN will also be participating in the 2017 Offshore Technology Conference (OTC) to enable our members interact with international training organisations with the aim of partnering with them in other to domesticate  more oil and gas trainings in Nigeria,” he said.

  • Reps pledge support to Local Content Board

    Reps pledge support to Local Content Board

    The House of Representatives has said it would do everything possible to support the Nigerian Content Development and Monitoring Board (NCDMB) in local content development.

    The Deputy Chairman, House Committee on Federal Capital Territory, Sergius Ose Ogun, who gave this assurance, restated the House’s commitment to making   laws that would boost Nigerian content development, disclosing that the Nigerian Content Act has been amended by the House, and the Senate has given its nod.

    In a telephone interview, Ogun said: “We have amended the Act to make it work for Nigerians. We will do all we can to make sure it works for Nigerians.”

    He urged the Board to work for the interest of all Nigerians, adding that the aims of the Board are to make Nigerians reap the benefits of its resources.

    The lawmaker appealed to indigenous firms to engage the people of the communities where they work, adding it would also help in reducing restiveness in the area. “An average Nigerian worker is a bread winner taking care of many  people; so, when you don’t engage these people, even if they don’t come out to carry placards, they have people that they take care of that can do that damage to you,” he said.

    He said it was not all about law making, adding there are enough laws that would regulate the Act and to make the International Oil Companies (IOCs) be on their feet and to do the needful.

    “The issue is not just about laws because our laws are enough to do anything you want to do but the bottomline is that we just want Nigerians to benefit from this whole thing so that at the end, it will be a win-win situation.

    ‘’It is no rocket science for the IOCs to know that if they train the local people and pay them well, they would have saved a lot of money,’’ he said.

    He said Nigerians should be very passionate local content. According to him, the IOCs were compelled to advertise, which opened the window for indigenous firms to apply.

    ‘’We appreciate what the government has done with the local content, and what the Board is doing. As lawmakers, we will do everything to support the Board.’’

    The Executive Secretary, Nigerian Content Development Monitoring Board (NCDMB), Simbi Wabote, said the Board had put in place adequate strategy to enhance collaboration with the government agencies, including the Immigration, Customs, the Nigerian Maritime Administration and Safety Agency (NIMASA) and the Department of Petroleum Resources (DPR)

    He said the Board recognised every agency and stakeholder in the industry in the development of the local content.

    According to him, the Nigerian    Immigration Service is among the key government agencies that suports Nigerian content, adding the Board would work with its oficials in realising its objective.

    Earlier, a stakeholders’ workshop had been held which, according to him, was anchored by the House of Representatives where everyone discussed the modalities for the implementation of the Act and also  addressed the grey areas and spelt out roles for every agency.

    The Customs, according to him, had rolled out guidelines and policies for the Board on the elimination of substandard parts imports, adding it would be implemented by the Customs

    He said: “We have tremendous capacity in-country for the manufacture of boats, nuts, gaskets and other kinds of fittings. We are working with the Customs to ensure that we pass on our aspiration to them and this is included in their schedule to ensure that the local industries were encouraged.”

  • Our plans for local content devt, by NCDMB chief

    Our plans for local content devt, by NCDMB chief

    Nigerian Content Development and Monitoring Board (NCDMB) Executive Secretary Simbi Wabote, an engineer, who has just marked 100 days in office, unveils the Board’s plan to maximise  local content development. EMEKA UGWUANYI reports.

    Simbi Wabote was appointed  the Executive Secretary of the Nigerian Content Development and Monitoring Board (NCDMB) on September 26, 2016 by President Muhammadu Buhari, after spending 26 years in the Shell Group of companies in Nigeria and abroad. He held various positions in engineering services, contracting & procurement, local content management, external and community affairs.

    He said he was committed to running an open and transparent organisation, and to be upfront with information on the activities, programmes and challenges of the NCDMB.

    “I am determined to remove opaqueness, rumours and insinuations often associated with oil and gas establishments,” he said.

    He noted that with the crash in crude oil prices since 2014, there have been very few activities as operators and the government were finding it difficult to fund new projects while existing contracts were being renegotiated downwards. “But without ongoing and new projects, there hardly can be Nigerian Content. These challenges notwithstanding, I took on this job with the conviction that the low-price regime presents the Board and the entire industry with a wonderful opportunity to find ways of doing things differently and better,” he said.

     

    Achievements and future plans

    Baseline study – the Board with the support of its consultants, he said, has started conducting a baseline study on Nigerian Content implementation, to review how well its act have been implemented in the past six years. “It is to review where we made progress and where we need to up the game. Also we have developed a Community Content guideline, which provides pragmatic steps for incorporating and engaging community contractors as a critical delivery point for Nigerian content development,” he said.

    “This guideline,” he continued: “was borne out of the necessity to boost peace and security in the Niger-Delta and address the lingering squabbles between host communities and service companies over participation in oil and gas activities.”

    Sections 25, 26, 27 and 28 (1) & (2) of the Nigerian Content Act provides for the operator to maintain a level of presence in communities where projects are located. The sections also mandate participation of community entrepreneurs in activities of operations throughout projects life cycle.

    President Muhammadu Buhari launched the Petroleum Industry Roadmap on October 27, 2016 to revitalise the oil and gas industry. “A key component of the Roadmap is to “deploy 30 per cent of business opportunities from operating companies to communities. The Board’s Community Content Guideline sets out strategies to realise this target. Our Capacity Development Initiatives are in aligment with Roadmap,” he stated.

     

    Contracting Cycle

    He said: “On resumption, I took on the lingering issue of protracted contracting cycle in the industry. With support from my team we have put in place internal performance measures to fast-track the contract processing time from NCDMB’s end. We have committed to specific timelines for review of Nigerian Content plans, technical & commercial evaluation and issuance of Nigerian Content certificates. It is my believe that other agencies involved in the contracting cycle are working on their internal processes so that we can collectively work together to reduce the protracted contracting cycle, which has been identified as the main cause of the high cost per barrel of Nigerian crude in comparison to other OPEC countries.”

    Others measures according to him, include fast-tracking implementation of the Nigerian Oil and Gas Parks Scheme (NOGAPS), Polaku Pipemill and accelerated disbursement of the Nigerian Content Development Fund (NCDF), which is nearly $700 million to deserving oil and gas service companies as well as the reconstitution of the joint committee with the Nigerian Maritime Administration and Safety Agency (NIMASA) on local content development in shipbuilding.

    “The Board also has concluded HR process review and institute performance driven work, set clear targets such as develop 5-year strategic road map,  developing Oil and Gas Parks in Ogbia, Bayelsa State; Oguta in Imo State; Okoyong in Cross Rivers State and Ikwe-Odio in Akwa Ibom. Each of these five parks is expected to create about 2,000 direct and indirect jobs and link community entrepreneurs to the oil and gas supply chain. The Board will also hold Nigerian Content Opportunities Fair, Research & Development Fair, and expand compliance oversight to midstream and downstream,” he said.

  • How to improve local content for optimum value creation

    How to improve local content for optimum value creation

    Coming from an international oil company, many would expect that he will have bias for the segment. But the Nigerian Content Development and Monitoring Board (NCDMB) Executive Secretary/Chief Executive Officer (CEO), Mr. Simbi Wabote, has promised not to compromise on local content development matter. In this interview with Assistant Editor EMEKA UGWUANYI, Wabote unveils his plans to create value and empower more indigenous firms. 

    What new strategy do you have for the NCDMB?
    When you have a new helmsman in any establishment, the first thing people will want to know is what difference you will make, and what your strategy for going forward is. I’m an engineer and worked for Shell for 25 years and rose to the position of a director. One thing my engineering knowledge teaches me is that you have to plan before you enter into execution. While we will focus on some quick wins to ensure continuity and to maintain the relevance of NCDMB, I think the first thing we need is to first of all take stock of how we have been able to implement the Act for the past six years and ask ourselves how well we have fared. Based on that stock-taking, we will set a baseline and pencil down the things we will pursue in the next four years that I will be in this position. First of all, we will continue the quick wins and, secondly, take a strategic look at how the Act has been implemented in the past six years and begin to strategise on the areas to strengthen, and the things we need to do that will change the face of the game. That, to me, is the strategic approach, which I will follow during my tenure. I’m sure the review of the Nigerian Content we intend to do will be very short and work is already ongoing. After that review we will set a very clear strategy direction, but in the short term, we will build on some of the successes that we have seen in the implementation of the Act. Some of these are the development of the pipe mills that we promised Nigerians that we will develop in-country, the development of our oil and gas parks to encourage manufacturing, and also the encouragement of local businesses to set up shops to manufacture for the industry. We will also look at the research and development (R&D) agenda that we have within the Act. A lot of work has been done, stakeholders had been engaged and some kind of regulation has been agreed on in terms of research and development. We will make sure we get quickly into the implementation phase. But like the Minister of State for Petroleum Resources, Dr Ibe Kachikwu, charged the Board, it is to think deep on the things we want to bring about in Nigerian Content to change the face of the game. So, our ambition will be very big, and robust, and the conscientious execution of that ambition.
    What is the worth of the Nigerian Content Fund? How much has been disbursed and how many companies have benefited from it?
    This is the question that bothers the minds of key stakeholders because the Nigerian Content Fund is what they started contributing since 2010, when the Act was enacted. I must say that the fund has grown over the years. There is about $600 million in that Fund. I mean functional dollars. As far as I’m aware, this Fund has benefited about six Nigerian companies that have tapped into it for capacity development. But I must say it is not directlygiving money to the six Nigerian contractors, it is about guaranteeing some of the loans they got from the banks because we are not a funding institution. So, we guarantee the loans they got from the banks. Not so much has been expended from that fund for capacity development, and part of the strategy of this new Board is to come out with a very transparent process with which genuine Nigerian contractors involved in the oil and gas sector will have access to the Fund. That is the strategy we will develop in the shortest possible time, to bring about transparency because most of the Fund contributors are asking questions about the Fund and we are not oblivious of that. We will make that position very transparent as soon as possible. One important thing, again, is the establishment of the governing council of the NCDMB, which was inaugurated on November 18, 2016 by President Muhammadu Buhari. That will bring corporate governance principles in the management activities of NCDMB and also support us in terms of the strategy we wish to deploy for Fund management.
    What will the board do about the upstream companies that don’t contribute to the fund?
    While the people who contribute to the Fund worry about the Fund, there are a lot of Nigerian companies that are not meeting up with the contribution as enshrined in the law. So, this Board will look at strategies with which we will make them comply with the provisions of the Act. Such companies might not be contributing out of ignorance or not understanding the implications of not doing so, and the mechanism to do those contributions. We are looking at those processes and within the shortest possible time, we will reach out to all those companies that are not contributing to the Fund and make them comply with the laws of the land. But having said that, I think it is also important to give them comfort that the Fund will be judiciously utilised for what it is meant.
    Some operators complain about the cumbersome process of accessing the Nigerian Content Fund. What will you do to ease access to the fund?
    I think it is not about the cumbersome process, but it is about the fact that there is no transparent process in accessing the Fund. I don’t think people have applied conscientiously for that Fund to do business with because the process is not clear to them, it is a bit opaque. That’s why I said this Board would bring about transparency and by the time we finished with the strategy, it would be published in various newspapers and other news media. Stakeholders will be engaged in the process we will follow to access that Fund. So, I don’t think people have really submitted their applications or shown their intentions from what I have seen. Probably there is no clarity and no understanding of the process to access the Fund, but we intend to bring about that transparency within the shortest possible time.
    There has been heated debate over the review of some of the provisions of the Act, and what constitute a Nigerian and an indigenous company. Can you throw more light on these issues?
    Like any legislation in this country or other parts of the world, it calls for review from time to time. I know there was an attempt by the House of Representatives to review the Local Content Act. In the process, all stakeholders decided to make their input of what they think the Act should look like, having operated it over time. I think one of the contentious issues with regard to the proposal for review is the ownership of equipment by indigenous companies. The Act stipulates 51 per cent ownership by Nigerian or indigenous companies because it was used interchangeably, but the proposed amendment, which I think at the moment, has not progressed too far, want those ownerships to be 100 per cent. I think the Board does not align with that position because we believe that in a global environment, you need to continue to encourage foreign investment in the country, partnerships, formation of consortium, businesses to distribute their risks in a way that if there is a downturn in the economy as it were today, the fall in oil price, no one company bears the total brunt of the impact. It is also a world that believes in interdependency and Nigeria will continue to collaborate and work with foreign countries and companies to enhance our capacity in local content.
    Can you explain more the 15-day approval limit to ensure reduction of the contracting cycle time?
    Contracting cycle time is of great concern not just to the international oil companies (IOCs) but also to NCDMB and some of our sister regulatory agencies because it increases the cost of doing business and it delays investment decisions. The Minister of State for Petroleum Resources charged all agencies in the oil and gas industry to ensure that they reduce the contracting cycle time as much as possible. In fact, he gave a benchmark of six months as a turnaround time for contracts. I think all the agencies are working on this to come out with a strategy with which they will reduce the contracting cycle time. One of them that NCDMB will adopt is to give a timeline within which if what is required of us is not received by the operators or project promoters, which is within 15 days, the operator or project promoter should consider that the item has been approved. I think we are drawing a line in the sand. I think that is a bold step and all my colleagues within the Board are aware of this and are working conscientiously to ensure that the turnaround time is drastically reduced for those items that are within our control. But it is not only NCDMB that gets involved in the contracting process in the oil and gas industry. We are working with other agencies to understand where the challenges are, but, on the other hand, we also challenge the project promoters and operators to also keep their house in order. We have also seen that the bulk of the delay is also on their part. For instance, when I took over office, I received a letter that NCDMB has approved six months earlier for a particular operator but the operator was asking for a further review. I’m sure once the operator gets that approval, the story might not get to the public that it was their fault but the operator might push the delay back to NCDMB.
    Many agencies as, you said, are involved in this contracting cycle job and all of you work for the government, from the Board to NAPIMS, I mean multiple regulators. Can’t one agency do the job?
    It is important to clarify the role of the different agencies. NAPIMS is not a regulator. It is a joint venture partner with oil and gas operators, hence they hold a critical stake in the business that the operators undertake. They have joint operating agreement, which they have negotiated with the various operators, on the role they play in the contracting cycle. But NCDMB is a regulator, it regulates NAPIMS. In every country, there are different arms of government that undertake different activities. It is the same government that set out regulations to check some of their activities. An example is the Central Bank of Nigeria (CBN), which ensures that banks’excesses are curtailed. In the same manner, the NCDMB ensures that local content is adhered to in the oil and gas industry.
    The indigenous operators complain about the award of jobs to foreign firms and influx of expatriates into the oil and gas industry and these are where Nigerians have capacity. How do you intend to tackle this?
    Local content is not a sprint, it is a marathon. It is not something that will happen in a year or two or even in five years, it is a continuous process that needs focus and tenacity to ensure that it is implemented. A lot of steps have been taken in terms of local capacity development to replace expatriates that come into the country to work. The media should also portray to the world efforts and achievements recorded by Nigerian Content. Today, most of the IOCs are being managed by Nigerians. This was not there some eight years ago when expatriates were the managers. In addition, about 90 per cent of employees of these IOCs are Nigerians. So, a lot of progress has been made in that area. Most of the owners of the oil blocks (oil mining leases) are Nigerians. This never existed seven years ago. A lot of progress has been made in various areas. So, what I mean is that Rome was not built in a day. We will continue to push the boundaries, do anything we can to improve local content attainment in the oil and gas industry. I think we also need to look at the positive side of it and not think we can eliminate expatriates within our midst overnight. Don’t forget that I came from an IOC. I know within those IOCs a lot of Nigerians are outside in various countries giving their expertise to those countries. So, from where I came (Shell), there are more Nigerians outside the country than expatriates in the country to strike that balance. I think the media should also look at the other side of the development because we also need Nigerians to go out to acquire the technical knowhow and knowledge, come back and make inputs to further develop the country.
    Nobody is contesting your competence, but coming from the IOC, there are concerns you will have sympathy for IOCs when there are issues. What will you do to strike a balance here?
    It has not just been a concern outside this wall, even my members of staff are also wondering on whose side I will be, having come from the IOC. But I think I’m first a Nigerian before I worked for the IOC. I also managed local content from the company I’m coming from for eight years, both locally and internationally. They know my antecedents; where I stand on issues that concern Nigeria and on issues that concern my employer then, which was Shell. I believe passionately in the benefits of local content, which I think Shell as an organisation also saw the benefits. This is so because I believe in the long run that local content will reduce the cost and ensure the security of supply. For example, today in the Niger Delta where you have all the militant activities going on, it is Nigerians that are working there. If we didn’t build local capacity, I think most of the oil companies would have packed up by now. Secondly, local content secures the life and properties of investors because there is no security you can get that is better than the community people. The benefits of local content are enormous. Shell is really pushing for the benefits of local content hence, they allowed my voice for local content to passionately exist. Now I’m working for the government to further enhance the development of local content in the oil and gas industry. I believe in the administration’s drive to create jobs and develop capacity; therefore, I cannot compromise on local content because I came from the IOC.

  • Local content’ll boost defence sector, says NCDMB chief

    The Executive Secretary, Nigerian Content Development and Monitoring Board (NCDMB), Simbi Wabote, has said the adoption of Local Content policy in the operations of the defence sector, particularly in the manufacturing and maintenance of security equipment and development of software, will boost the sector.

    Wabote made the statement when he delivered a lecture to participants of the Nigerian Defence College, Course 25, in Abuja.

    Speaking on the topic ‘Local content policies and national security: An assessment of the oil & gas sector,’ he charged military authorities to also consider adopting local content in the production of security clothing, construction of security vessels and include the policy in other security contracts, especially in offshore locations and maritime facilities.

    He pledged the support of the Board to the Defence community in developing a unique local content policy that would fit its operations.

    According to him, the implementation of local content in the oil and gas industry has yielded enormous achievements, including employment generation for thousands of Nigerians, skills acquisition, local manufacturing and asset ownership.

    He advised sectors such as power, telecommunications, and construction to adopt the policy.

    The NCDMB chief noted that countries, such as Ghana, Kenya, Gabon and Oman, have also adopted some of the local content models implemented in Nigeria. He described Nigerian Content as a national security imperative, noting that the oil and gas industry must depend on Nigerian-owned assets and personnel to avoid a scenario where the sector is forced to shut because foreign owned assets or expatriates have to be withdrawn due to insecurity in the Gulf of Guinea region, diplomatic tensions or outbreak of an epidemic in the country.

    He said expenditure on procurement of manufactured goods gulp over 50 per cent of contracts budgets, much more than other elements aqlike fabrication, construction and engineering. This, he said, informed the emphasis of Nigerian Content implementation on in-country manufacturing and domiciliation of industry activities because of their capacity to create employment, retain spend in the economy and contribute to national industrialisation.

    He explained that NCDMB is implementing the Nigerian Content Act using a four-pronged approach that focused on Manufacturing and Infrastructure, Human Capital and Technology, Supplier Development and Funding and Asset Ownership.

    Wabote expressed satisfaction that the Board’s participation at the Defence College event last year resulted in the partnership the military has forged with Oildata Wireline Services – an indigenous service company.

    The two parties collaborated in the deployment of fibre optic technology for pipeline monitoring and protection between Ughelli and Kwale, Delta State last year and the setting up of oilfield shaped charge manufacturing facility in Nigeria with the Defence Industry Corporation of Nigeria (DICON).

    Wabote explained that the Board was collaborating with the Nigerian Maritime Administration and Safety Agency (NIMASA) to implement the Cabotage Act as it pertains to the oil and gas industry.

    He noted that the number of Nigerian vessel owners in the oil and gas industry have increased to about 60 per cent – an improvement on what obtained in 2010 when the Act was enacted.

    He said the Board’s expatriate quota policy regulates the participation of expatriates in the industry through the issuance of biometric cards after confirmation that such skills are not available locally. The policy also assists the Board to electronically track their length of stay, compliance with provided succession plans and expected date of exit.

  • Local content: National Assembly to modify procurement laws

    Local content: National Assembly to modify procurement laws

    • NCDF grows to $600m

    The National Assembly will begin the modification of public procurement laws to accommodate more local content provisions as the Federal Government plans to enforce application of local content in the other sectors of the economy, the Minister of State for Petroleum Resources, and Group Managing Director, Nigerian National Petroleum Corporation (NNPC) Dr Ibe Kachikwu has said.

    He spoke at the annual Nigerian Content Investment Forum (NCIF) organised by SweetCrude in partnership with the Nigerian Content Development and Monitoring Board (NCDMB) in Houston, Texas, United States (U.S).

    Represented by the Director, Monitoring and Evaluation, NCDMB, Tunde Adelana, he said: “Government is determined to keep our populace productively engaged, as such we are working on enforcing local content practice in other sectors especially power, construction, information communication technology (ICT). The National Assembly is currently in the process of amending our public procurement laws with stricter local content provisions.”

    He also noted that the Nigerian Content Development Fund (NCDF) has grown to $600 million from $500 million, adding that the management of NCDMB, Central Bank of Nigeria (CBN) and commercial banks, are reviewing the guidelines of the fund to ease access by indigenous players in the oil service industry.

    Kachikwu said the Federal Government plans to review tariffs in oil and gas sector that hinder competitiveness of locally manufactured goods and extend fiscal incentives to all investors that have oil and gas facilities close to rural oil producing communities. He added that in line with government’s drive towards diversification of the economy, the administration is focused on implementing initiatives that are aimed at creating mutually benefitting partnerships that will contribute towards the achievement of industrial growth and socio-economic well being.

    “Nigerian content policy has shifted the focus of the oil and gas industry from the stance of revenue for government to in-country value addition through the domiciliation and utilisation of Nigerian goods, services and personnel in oil and gas activities,” Kachikwu said.

    Addressing Nigeria’s Small and Medium Enterprises (SMEs) and Houston’s Original Equipment Manufacturers (OEMs), he said specific areas of focus for local content development include infrastructure, fiscal incentives, funding, addressing long contracting cycle, and in-country processing of hydrocarbon resources.

    “We will accelerate the implementation of the Nigerian Oil and Gas Park Scheme (NOGaPS) to enable our SMEs focus on production and services while we develop infrastructure and facilities to support domiciliation imperatives. Tariffs that put local production at a disadvantage are being reviewed as a way of enhancing competitiveness of locally made goods that are critical to the industry such as steel pipes and valves,” Kachikwu said.