Nigeria’s In-Country Annual Spend In Oil & Gas Industry Hit  $6 Billion- NCDMB

NIGERIAN OIL AND GAS INDUSTRY LOCAL CONTENT ACT- A ROADMAP FOR  AFRICA'SRESOURCE RICH COUNTRIES BY Hannington Osodo - TheWire

Yemisi Izuora

Nigeria has scaled up award of contracts to indigenous firms to the tune of $6 billion out of estimated $20 billion annual value of contracts in the oil and gas industry, following sustained implementation and monitoring of the Nigerian Oil and Gas Industry Content Development Act, NOGICD Act.

Executive Secretary of the Nigerian Content and Monitoring Board, NCDMB, Simbi Wabote, who gave the figure at the Nigerian Bar Association Section on Business Law  and NCDMB Colloquium, in Lagos yesterday recalled that prior to the enactment of the Act in 2010, only a small fraction which is less than 5 per cent of the annual Nigerian oil and gas Industry spend was retained in-country.

Wabote, however, said that the enactment of the NOGICD Act in 2010 which led to the establishment of Nigerian Content Development and Monitoring Board (NCDMB) restored hope to the Nigerian oil and gas industry as no nation can survive under the negative trend of capital flight, loss of jobs and community discontentment.

The Board according to him, has two key mandates which are: to develop local capacities and capabilities along the oil and gas value chain without compromising standards and, to monitor compliance and enforce the provisions of the NOGICD Act.

He informed the audience that since inception in 2010, the implementation of the Act has resulted in 35 per cent of in-country value retention compared to the less than 5 per cent value retention before the NOGICD Act.

“Before the Act, we had annual spend of $20 billion with little or nothing retained in-country. Today, I can confidently say that we spend over $6 billion in-country annually.

“We have 2 world-class pipe mills and 5 impressive pipe coating yards

About 40 per cent of marine vessels used in the oil and gas industry are owned by Nigerians. We have four (4) active dry-docking facilities in Port Harcourt, Onne, and Lagos. In cable manufacturing, all cables required in the oil and gas sector are all manufactured in-country.” he said.

Currently, Wabote disclosed that over 50,000 direct jobs have been created on the back of implementation of the NOGICD Act, with over 76 operating companies and over 8,000 oil and gas service companies pulling their weight in the industry.

Continuing, the Executive Secretary added, “Our indigenous operators are responsible for 15 per cent of our oil production and 60 per cent of our domestic gas supply while in fabrication, today Nigeria can handle fabrication of more than 120,000 tonnes per year.

In cable manufacturing, all cables required in the oil and gas sector are all manufactured in-country, Wabote said while ten million training manhours have been delivered via our Human Capacity Development Programs.

This he further said was responsible for indigenous workforce to sustain oil production at the peak of the COVID-19 pandemic lockdown.

Listing other achievements, he said that in the last four years the Board has completed and commissioned its 17-storey headquarters building complete with 1,000-seat auditorium and multi-level car park and completion of 10 Megawatts, MW, power plant at Elebele Bayelsa State for supply of electricity to the new headquarters building and the oil and gas park in Bayelsa State

The power plant is equipped with 3 gas powered generators of 4800kva each .

In addition the Board completed and commissioned the 5,000bpd Waltersmith Modular Refinery as well as the launch of the $200million Nigerian Content Intervention Fund which was recently increased to $350million with additional products for Working Capital and for Women in Oil and Gas and Forensic Audit of NCDF Remittances with the recoveries close to $100 million.

The Board has also successfully exited appropriation since 2018 and intend to maintain self-funding status through the prudent management of the Nigerian Content Development Fund entrusted in its care.

Wabote also added that the Egina FPSO which is the largest in the world was integrated in the SHI-MCI yard in Lagos, which confirms that the only infrastructure in West Africa for FPSO integration is available in Nigeria.

Other achievements include STEM Education training for 1,500 teachers in Bayelsa and Katsina States; Completion of thirty ICT Labs in 9 states; Completion of sea-time training for 20 marine cadets in international waters with another batch of 40 cadets enrolled.

The Board also completed The GSM training scheme for 3,500 participants in Kano, Bauchi, Yobe, and Cross River States, upgrade of two Vocational Technical Colleges in Akwa Ibom and Enugu States; got approval for the $50million Nigerian Content Research & Development Fund

“We launched NOGTECH-HACKATHON and ENACTUS-STIC to nurture innovation amongst our young minds;

“We have made steady progress in the implementation of Project 100 to grow capacities and capabilities of indigenous oil and gas service providers.

We have engaged the services of seven (7) Third Party Monitors to expand the coverage of our compliance and monitoring efforts to additional thirty (30) operators in the upstream, midstream, and downstream. ” Wabote also added.

Additionally, it has harmonized its Marine Vessel Categorization standards with that of NIMASA and NIWA, reinvigorated the Nigerian Content Consultative Forum (NCCF) by creating the Diversity Sectorial Group and the Gas Value-Chain Sectorial Group. This is in line with Section 58 of the NOGICD Act of 2010, he explained.

In the area of Service Level Agreements, SLA, the Board has signed SLA’s with OPTS, IPPG, and NLNG thus covering about 98 per cent of industry operators. The benefit of the SLA was evident in the Board’s record-breaking timely approvals of the NLNG requests for the Train-7 project.

Industry operators are aware of the 15-day rule in which they can take any request forwarded to us as approved if they get no response from the Board after 15 working days and in line with its 10-Year Strategic Roadmap, the Board aspires to attain 70 per cent Nigerian Content level by the year 2027.

The Board is also in the process of completing the construction of oil and gas industrial parks spread across four states complete with the provision of infrastructure and utilities to enhance local manufacturing and partnership for the local manufacturing of 1.2million composite LPG cylinders per year with the 1st phase scheduled for commissioning by the end of this year;

It is also in partnership for the establishment of additional modular refineries in Bayelsa and Edo States and the construction of 300MMscfd gas gathering hub for gas supply into the OB-3 pipeline as well as ongoing partnership to deepen LPG utilization in the North with the roll-out of LPG bottling plants and depots in ten Northern States of Kano, Kaduna, Katsina, Bauchi, Nassarawa, Zamfara, Niger, Plateau, Gombe, Jigawa states and Abuja;

“As we journey towards the 70% Nigerian Content level target, we will continue to utilize industry platforms and fora like this to connect with our stakeholders to provide clarity on our mandate and ways to address any constraints of the industry.

The local content development drive unleashes an array of opportunities in the oil and gas industry.” he said.

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