The Nation Newspaper

Tag: Local firms

  • Local firms contravene Content Act, says Wabote

    The Executive Secretary, Nigerian Content Development and Monitoring Board (NCDMB), Simbi Wabote, has said local firms flout the provisions of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act more than international oil companies (IOCs).

    He is surprised that indigenous operators who benefited from the Act are circumventing it.

    The NCDMB chief spoke with reporters in Lagos at the weeked.

    On the forthcoming Nigerian Oil and Gas Opportunity Fair (NOGOF 2019) holding in Yenagoa, Bayelsa State capital on April 4 and 5, he said the fair had as theme ‘Maximising investments in the Nigerian oil and gas industry for the benefits of the Nigerian people.’

    On the level of compliance with the Act by the IOCs, National Oil Company and the indigenous oil companies, Wabote said, among the three, the IOCs have the highest level of compliance.

    He said: “I can categorically tell you that in terms of compliance from where I sit, the IOCs are the most compliant with the NOGIC Act to a large extent compared to the indigenous players. If there are people who flout the Act, they are the indigenous players who have benefitted from the Act.

    “When you put the measure of compliance between the IOCs and the indigenous operators, I see the clear tendency by the indigenous operators to want to circumvent the provisions of the Act, which honestly to me is an irony. People who benefitted from a process are now the ones who are actively working to see how they can circumvent the Act.

    “In terms of compliance, if you compare the international oil companies with the NOC as well as the indigenous players, the IOCs are on top of compliance because their corporate governance structure is also very strict because they also go through international scrutiny, so they try as much as possible to comply.”

    On the strategy adopted to promote compliance, Wabote said: “Our strategy has always been a pragmatic approach to implementation of the Act. We don’t read the Act like a bible. We have to compare between existing capabilities and capacities and ask; are they available at all and if they are, do they address a particular challenge? When do we build capacity up? Are we going to build them in a couple of years’ time? Don’t forget that oil and gas is the mainstay of our economy and if we don’t manage it properly, we will shut down businesses as well as  our future as a country.

    “So, we use a pragmatic approach in terms of implementing the Act itself. And we made tremendous progress compared to other sectors, be it construction or information technology. Today, every other sector wants to model its local content implementation to that of oil and gas sector which we are also actively supporting them to do.”

  • Reps to probe IOCs over debt to local firms

    The House of Representatives is to investigate  International Oil Companies (IOCs) operating in the country over huge debts owed indigenous contractors.

    An ad hoc Committee that would carry out the investigation will also examine the processes of marginal oil  fields licence acquisition as well as the financial proceeds from successful bids, remittance and non-remittance of revenues by the licensed operators into the Federation Accounts.

    The operations of licensed marginal fields Strategic Alliance Agreements between IOCs, investors and Nigerian Petroleum Development Company (NPDC) in the operations of the margnal oil fields would also be examined by the panel.

    The decision of the House followed the adoption of a matter of urgent public importance by brought by Diri Douye (PDP, Bayelsa), who said the need to investigate the processes of licensing rounds and financial proceeds of the oil and gas fields operators has become imperative.

    “Though the economic potentials of such fields are enormous to the economy of Nigeria, but it is sad that the operations and remittance of funds back to government is skeletal as the operators keep claiming to be battling with a range of challenges from environmental, financial to procedural.

    “The Deparrmemt of Peteoleum Resources  (DPR) has also not lived up to its billing in the supervision of the operation  and this has made the process which should be a large contributor to the national funds remit barely four per cent  earnings to the national coffers.

    “The result is a recurring system of huge revenue loss which can no longer go unnoticed and unresolved,” he said.

    The motion was unanimously adopted after a voice vote.

     

  • EATECH urges local firms’ protection

    An indigenous firm, Engineering Automation Technology Limited (EATECH), has decried  continuous breach of the Local Content Law by some International Oil Companies (OICs) in Nigeria, urging the Nigerian Content Development Monitoring Board (NCDMB) and the National Petroleum Investment Management Services (NAPIMS) to step up their regulatory and monitoring functions to protect local firms.

    EATECH’s Managing Director/Chief Executive, Mr. Emmanuel Okon, spoke to reporters at an event organised to mark the company’s 10th anniversary and inauguration of the company’s multi-million naira operational base and fabrication yard in Eket, Akwa Ibom State.

    Okon lamented the harsh operating environment in which some local vendor firms were operating in Nigeria, saying in a bid to tap effectively into the Nigerian Content Law, some local firms had taken bank loans and made substantial investments in requisite infrastructure and human capital, only to suffer from low patronage from International Oil Companies (IOCs) in the award of contracts.

    He pointed out that despite the growth in the technology and manpower capabilities of Nigerian firms, contracts were continually skewed in favour of foreign firms by some of the OICs.

    Okon said local contractors were faced with a unique challenge where IOCs expectation of quality project delivery from an indigenous contractor is usually benchmarked against expatriates whereas the consideration for same goods and services are based on the perception that Nigerians deliver low value jobs. He explained that under such situation, the premium for service excellence would always be skewed to expatriates.

    He said: “NAPIMS in conjunction with the NCDMB should encourage paradigm shift in the skewness of contract consideration towards expatriates and similar contract values should be applied to both local and expatriates where execution standards are similar.

    “We have built the capacities to do several of the projects that continue to go to expatriate companies and this is not good for our business. We have been tested and we have proved that we can deliver the best quality of jobs. So, it is not about the delivery of job. It is about our regulators keeping an eagle eye and ensuring that at all stages no one breaches the Nigerian Content Law. It is important that we get patronage because that is the only way we can grow, eradicate unemployment among our youths and contribute to prosperity of the economy.”

    Okon also listed access to funding as another challenge faced by local firms and he also demanded close collaboration between the NCDMB and banks to resolve this challenge. “Like most local contractors, access to working capital remains cumbersome for lack of appropriate collateral and we also experience delayed payment when negotiating contract financing with banks,” Okon added.

    “There should be a deliberate collaboration between the NCDMB and financial institutions in developing a framework for local contractors to access funding,” he said.

  • ‘Local firms can meet meter demand’

    Indigenous companies can meet the requirement for meters, the Minister of Power, Works and Housing, Babatunde Fashola, has said.

    Fashola, who spoke after he visited Mojec International, a meter manufacturing plant in Lagos, expressed delight that there are Nigerian firms that can meet the metering demand of the country. He, however, wondered why there is still a huge meter gap between demand and supply.

    According to him, all that is required for the indutry to thrive, is for players in the power sector, especially the distribution companies and meter manufacturers, to embrace persuasion and reasoning to be able to play their role, adding that this would make the  sector more competitive in terms of pricing and quality of service delivery in the local market.

    He said: “I think that commercial things should be done by persuasion, reason and the dynamics of the economy. When the market is competitive in terms of pricing and quality, then it will make more business sense to produce and patronise meters locally.”

    Mojec International Managing Director, Mrs.Chantelle Abdul, said the lack of finance to run factories, as well as the inability to provide some kind of vendor financing to off-takers remains a major challenge for meter manufacturing.

    “One of our critical issues at the moment is lack of access to foreign exchange. A lot of our manufacturing inputs rely on goods abroad. My goal as a manufacturer, is to produce much of my products with local inputs so that we can go as far as producing our chips and the PCB which is the brain of the meter and all other components that are required,” she Abdul said.

    She regretted that because the country lacks auxiliary firms that can support bigger manufacturing firms, it is increasingly becoming difficult for the sector to produce with locally sourced inputs, thereby increasing cost of production.