FG remains committed towards implementing local content policy – Kachikwu
…Charges NCDMB, NAPIMS on six months contracting cycle
Houston Texas: the Minister of State for Petroleum Resources and Group Managing Director of Nigerian National Petroleum Corporation, NNPC, Dr. Ibe Kachikwu has assured local service provider and prospective investors in the oil and gas industry of Federal Government commitment towards implementing the Local Content policy.
The Minister who stated this at the 2016 Nigeria Content Investment Forum in the Houstonian hotel, Houston Texas put together by Sweetcrude Reports in collaboration with Nigeria Content Development and Monitoring Board, NCDMB said in addition to implementing local content policy, government will continue to provide the enabling environment required to nuture businesses and investment towards creating a robust supply chain.
Kachikwu who was represented by the acting Executive Secretary of NCDMB, Mr. Daziba Patrick Obah said despite falling crude oil price, local content policy will be implemented.
Addressing Nigeria’s Small Medium Enterprises, SMEs and Houston’s Original Equipment Manufacturers, OEMs at the event, the Minister said specific areas of focus for local content development include, infrastructure development, Fiscal incentives, funding, addressing long contracting cycle, and in-country processing of hydrocarbon resources.
“We will accelerate 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.
“We will accelerate approval for gas infrastructure projects to make gas available in specialised oil and gas manufacturing and service hub. The gas infrastructure will assist in meeting the energy and power requirement of businesses supporting the oil and gas industry,” Kachikwu said.
On fiscaal incentives, the Minister said government shall extend fiscal incentives to all investors that set up shop close to rural oil producing communities.
“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,” he said.
To support peculiar funding needs of oil and gas service companies, Kachikwu said the NOGICD act established the Nigerian Content Development Fund, NCDF.
“NCDF provides source of low interest fund for the execution of projects and capacity development interventions in the oil and gas industry.
“NCDF operating model is currently being reviewed to enhance its accessibility by local service companies for their capacity enhancement activities. I encourage you all to approach the NCDMB for details on the operating guidelines for accessing NCDF,” the Minister said.
He maintained that Nigeria Content is now a key requirement in the conceptualisation of oil and gas projects and contracts which is creating ample work scope to be domiciled within the Nigeria economy.
However, Kachikwu noted that there is the lingering issue of contracting process spanning between two to four years.
He therefore charged all agencies involved in the contracting process such as NCDMB, NAPIMS and operating companies to work together and develop a common industry contracting procedure that will reduce the contracting processing time to six months.
He added that there is ongoing procedure that will identify companies that have invested in the economy and categorise them for specific work scope in a way that will facilitate contract opportunities.
“These measures are intended to boost investor confidence and attract investment into the Nigerian economy,” Kachikwu added.
Dr. Kachikwu explained that government is determined to engaged Nigerian in productive work by enforcing local content practice in other sector such as in power, construction and telecommunication.
“As you are aware, the National Assembly is currently in the process of amending our Public Procurement laws with stricter local content provisions. The cross sectorial synergy that will be created therein will expand market opportunities for OEMs that set up in Nigeria beyond opportunities in the oil and gas sector,” he said.
He added that government is pushing forth the drive to harness Nigeria’s our hydrocarbon resources for industrialisation noting that emphasis is no longer to generate revenue from exporting crude oil but to process locally to meet petrochemical, power, energy and domestic needs of Nigerians.
Kachikwu urged OEMs and multinationals to take advantage of the new thinking to set up hydrocarbon processing plants in Nigeria stressing that the decision to invest in Nigeria is the right investment decision.