Why Firms with Nigerian Local Content Commitment Are Preferred on LNG Train 7

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The Executive Secretary of the Nigerian Content Development and Monitoring Board (NCDMB), Engr. Simbi Kesiye Wabote, has explained why firms with Nigerian Local Content commitment are preferred to their foreign counterparts who are just arriving to the scene.

Speaking during a webinar, Wabote stated that the implementation of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act has saved Nigeria an estimated $2billion in the Engineering Procurement and Construction (EPC) contract for the Nigeria LNG Train 7 Project.

Presenting the keynote address at the 2020 Annual Capacity Building Workshop organised by the Board for the Judiciary, Engr Wabote stated that contrary to insinuations held in some quarters, ample evidence has proven that sustainable Local Content practice reduces the cost of oil and gas projects in addition to creating job opportunities and prosperity.

The NCDMB boss cited the example of the LNG Train 7 EPC bid, where Saipem and its consortium won the contract with a much lower bid than its competitor, leveraging its commitment to local content and investments in Nigeria in the last 50 years.

According to him, in the LNG Train 7 project contract which had been concluded and awarded, the difference in price between Saipem that had established itself in Nigeria and the second lowest bidder that was coming from outside the country was $2billion. 

“That’s a huge sum of money that this country would have lost if not for the drive for the development of Local Content,” Wabote said.

He explained that the other consortium had no business history with Nigeria and it proposed to put extra $2billion on the back of the project to develop local capacity to execute the project.

“This is evidence of cost savings associated with the development of Local Content,” he said.
Admitting that developing Local Content and building capacity would always entail some costs at the beginning, the Executive Secretary stated that such costs ultimately gets reduced overtime and creates much needed jobs and stability in the polity.

He also clarified that the focus of Nigerian Content implementation is not Nigerianization, rather it encourages domiciliation of capacities and promotion of foreign direct investments and home grown investments.
He assured that the NOGICD Act would always protect investments in-country, adding that companies that build capacities are given first right of refusal in industry projects.

“There are cable manufacturers in Lagos. If there is any opportunity to supply cables to oil and gas companies in Nigeria, those companies have the right of first refusal.”

The workshop was held via zoom and it drew over 117 participants, including Justices of the Supreme Court, Appeal Court, National Industrial Court, Federal High Court and external solicitors.

By Chibisi Ohakah, Abuja


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