Nigerian Content Policy: A True Jinx Breaker
It would certainly not be out of place for anyone to allude that Nigeria appeared jinxed at a point in her economic life. What with the depressing fact that after 50 years of oil exploration and production, there was little or nothing to show for the huge oil revenue? Interestingly, the emergence of the NOGICD Act in 2010 and Nigerian Content Development and Monitoring Board’s doggedness in the pursuit of its mandate of ensuring that local capacities are built and the overall enforcement of the provisions of the NOGICD Act, are today reversing the ugly past, restoring confidence, repositioning and signalling a new dawn that will usher the country into a realm of growth, development and industrialisation, Peace Obi writes.
Nigeria is one country in the Africa continent and the world as a whole that stands out for nature’s benevolence on her. Hugely endowed with human and material resources, it would not have been out of place to describe her as the Giant of the World. Naturally, she is made beautiful, rich and wealthy by diverse and proportional deposition of these mineral resources in different regions and states of the federation. And in 1956, Nigeria discovered her ‘Black Gold’ in Oloibiri in today’s Bayelsa State.
The discovery of crude oil in commercial quantity in the creeks of Niger Delta, intrinsically led to the relegation of other resources, thus making oil the most important commercial asset of the country. Subsequently, the country’s doors were flung open to the international organisations that became attracted to Nigeria’s sweet crude. The exploration and production of this high-value, low-sulfur content, light crude oil did not just project the country into the international space but made her one of the oil-producing countries whose crude remains attractive to international markets till today.
NOGICD Act, the forerunner of a Paradigm shift
With over 50 years of oil exploration in the country, observers have sadly noted that the revenue generated from crude oil exploration and production has scarcely benefitted the country and her citizenry. Also, confronted with the reality that the country’s oil wealth has not passed down to her citizens, especially as statistics has it that about 70 per cent of the population still lives below the poverty line, the country in 2010 formally rose to arrest the misnomer through the instrumentality of law.
With the burning desire to strike a balance between Nigeria’s huge resource endowment and her economic development, on April 22, 2010, the Nigerian Oil and Gas Industry Content Development (NOGICD) Act was passed into law. On the heels of this, the Nigerian Content Development and Monitoring Board, NCDMB was established. The Board was charged with the onerous task of designing strategies using legal framework to drive compliance for the Nigerian Content policy. Eight years down the line, the passage of NOGICD Act and the creation of the NCDMB has become a turning point for Nigeria’s industrialisation bid.
A new era has set in and a new storyline had begun. The execution of contracts and virtually all other activities by the foreign companies, resulting in huge capital flight, lack of jobs for Nigerians in the oil and gas industry, among others came under check. NCDMB in its effort to realise 70 per cent in-country value retention within a period of 10 years, has continued to adopt different approaches and activities towards achieving its goal.
Obviously, the Board has proven to be a present help in the time of need for the reverse of some ugly trends in the Nigerian oil and gas industry. According to the Board, the domestication and domiciliation of operations that will usher Nigeria into a new era of greater participation of indigenous companies, communities, and individuals in the Nigerian oil and gas industry remain a target it pursues with passion.
2018, a year with landmark achievement
Indeed, true to the NCDMB’s declaration to integrate oil producing communities into the oil and gas value chain, maximize participation of Nigerians in oil and gas activities, link oil and gas sector to other sectors of the economy and maximization of Nigerian resources, from the inception of the Act till date, it has been a progressive movement. Guided by a 10-year Strategic Roadmap, NCDMB has nurtured Nigerian Content policy and saw the implementation leap from almost at a zero point in 2010 to a record high of 30 per cent in 2018.
Egina FPSO: The Local Content Pacesetter
The year 2018 became explosive for Nigerian content achievement. The berthing of Total Exploration and Production’s Egina Floating Production Storage and Offloading vessel at the SHI-MCI Yard, Ladol Free Trade Zone brought a major breakthrough for the country. Six months after its arrival, the fabrication and integration work on the vessel became a huge success. Undoubtedly, Egina FPSO turned out to be the jinx breaker, dispelling naysayers and their unbelief in the capacities and capabilities of indigenous oil servicing companies, and ultimately redefining Nigeria as a land of possibilities with enormous resources yet untapped.
The successful integration of the six locally fabricated topside modules of the FPSO with 2.3 million barrels storage capacity vessel is said to be a game changer as far as the execution of deep offshore oil and gas projects in the country is concerned.
Speaking on the project reputed to be the first of its kind in sub-Saharan Africa, Vice President, Yemi Osinbajo described the successful anchor of the FPSO as a celebration of local content. Commending participants on the uncommon feat, Osinbajo said, “Excellent work has been done here and this would be sacrosanct to the economic recovery and growth plan of government in the long run as would be evident in the nation’s Gross Domestic Product in no distant time.”
For the Executive Secretary, Engr. Simbi Wabote, the Egina project changed the narrative about capacities and capabilities of the indigenous oil servicing companies in the country. He noted that the quality and timely delivery of the Egina project has raised the bar in the indigenous companies’ participation in various scopes of contract handling, covering the wells, subsea production systems, umbilicals, flowlines and risers. He said, “One of the Nigerian contractors that fabricated the Buoy completed it three months ahead of schedule. The argument often put forward by project promoters is that Nigerian Content is expensive and cannot deliver on schedule. The Egina has buried that mindset forever,” he said.
More Local Content Achievements
Also, in a similar development, another success story has been recorded with the 100 per cent local content input in the development of Oredo Integrated Gas Handling Facility (IGHF).
Speaking during a tour of the NPDC’s Oredo Flow Station, Oredo Gas-to-Pan-Ocean Facility, Oredo Integrated Gas Handling Facility (IGHF), as well as the Oredo LPG Dispensing Facility, all in Edo, the Group Managing Director of NNPC, Dr. Maikanti Baru, said he was proud that a world-class facility was being put in place by a Nigerian engineering contractor in conjunction with another Nigerian company, the NPDC.
Baru said, “From engineering, construction to the erection of the various units, we feel very encouraged by the huge man-hours which you are putting in here, day and night, with full local content,” Baru told over 500 workers at the site.
Speaking further, the NNPC boss stated, “The IGHF is currently at 80 per cent completion. When completed in December, it will make provision for dehydration of gas and liquid extraction.
“ It is expected to also produce both Liquefied Petroleum Gas (LPG) and Propane, in addition to dry gas to the Escravos Lagos Pipeline System (ELPS),’’ he said
He described the Oil Mining Lease (OML) 111, where the gas projects were located, as one of the most significant assets of the NPDC.
“You could see that right from the well-design through to reception of the various liquids to the processing and disposal of the various outputs, it is fully indigenous. So, it cannot be better than this,” he added.
He said the LPG Dispensing Facility strategically offered 40 per cent solution for Nigeria’s domestic LPG market which would translate into extra cash flow for the company.
The List Continues
In a recent visit by the NCDMB to the Dangote Petroleum Refinery and Petrochemical Free Trade Zone Enterprises (DPRP), the Board revealed that the level of adherence to the local content law in the refinery project execution was quite commendable.
To strengthen the policy implementation as well as guard against the reoccurrence of such losses the country experienced prior to the passage of NOGICD Act, the Board took a Nigerian Content Sensitization/Awareness Creation Programme titled, “Let’s Walk the Nigerian Content Talk Together,” for contractors working on the DPRP.
Represented by the Director, Monitoring & Evaluation, NCDMB, Mr Akintunde Adelana, the Executive Secretary, Engr. Simbi Wabote said that the programme was part of the Board’s efforts to ensure that the company and its contractors comply with the local content policy.
Wabote explained that the Dangote Refinery projects were expected to close a major gap in the supply of petroleum products in the country. “We consider this as a very important project and we are willing to partner with the company to ensure full implementation of the local content policy. We embarked on this journey with the company a long time ago and we are ready to partner with the Dangote Group.”
Stressing that the country recorded loses prior to the enactment of the local content policy, Wabote noted it came from jobs executed abroad by International Oil Companies (IOCs), operating in the country.
According to him, “The narrative then was that nothing can be done in-country. Plants and modules were fully fabricated offshore without any structure in place to achieve knowledge transfer. Before 2010, we had no active dry-dock facilities. The few we had were abandoned and left to rot away. Today, we have four active dry docking facilities in Port Harcourt, Onne, and Lagos,” he added.
The list of Nigerian Content success story is unending. It is just a pointer to whom we really are as a people and as a nation. Greatness truly lies in us!