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Capacity Utilisation Bane of Local Content —Stakeholders

…As NASS plans to amend NOGIC Act

-By Gideon Osaka

The local content policy of the Federal Government may not achieve the expected results if the issue of capacity utilisation is not urgently addressed, oil industry stakeholders have opined.

Speaking at the Nigerian International Petroleum Summit, NIPS, Professor Wumi Ilebare, African Region Director, Society of Petroleum Engineers (SPE), stated that Nigeria is not suffering from lack of capacity but local capacity utilisation. He said, “Nigeria is not suffering from lack of capacity. What Nigeria is suffering from to derive benefits from local content, is local capacity utilisation. We need to move away from equalisation of everything. You cannot pay a professor of petroleum engineering the same amount you pay a professor of history. You have to look at so many things. You need to move away from centralisation of most of the things we are doing if research and development are to take us to the next level. You must find a way to create incentive to make people study more difficult subjects that are required to fill the gaps.

“There must be partnership if Nigeria wants to get the full benefits of local content policy. Local content is not about local pockets. It is not about my people. It is about who is there that has the capacity to provide the necessary and needed services. “All over the world, Nigeria’s local content has been a banner. I have had the privilege of traveling to many oil producing African countries. They said they have learnt something from Nigeria’s local content policy and they were fast. When it comes to research and development, the place for cheap labour is the university. If the universities are not fully developed, to be able to produce capable hands to fill the gap, all the conferences and the events we organise are mere jamborees.”

Also speaking, Hon. Legor Idagbo, Chairman, Nigerian Content Development and Monitoring Committee, House of Representatives stated that the National Assembly is working seriously to amend the Nigerian Oil and Gas Industry Content Development, NOGICD Act, so as to give the Nigerian Content Development and Monitoring Board, NCDMB, power of enforcement. “The focus area for the National Assembly is to amend the NOGIC Act. The focus is to give NCDMB more power of enforcement. There were some clauses that created some lacuna. We want to amend those clauses to further strengthen the board. The activities of the board will also begin to cover some aspects of the midstream and downstream operations. That way we are able to trap comprehensively the complete value chain in the sector in-country.” Idagbo lamented the gap currently being experienced in the local content policy. “There is still gap in the local content policy. 65 per cent of Nigeria’s revenue comes from the oil and gas sector, whereas the GDP contribution to the economy is less than 10 per cent. Angola is Africa’s second-largest producer of oil. The GDP contribution from the oil and gas sector is about 50 per cent. That means they are able to trap in-country the complete value chain from the sector. That is why we need to take other steps and make further legislation to correct some of those gaps.