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NCDMB Celebrates 10 Years with a 10-Year Road Map

-By Fred Ojiegbe

The local content aspects of the Nigerian oil and gas industry came under the spotlight recently as the enactment of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act clocked 10 years.

The NOGICD Act which was signed into law on April 22, 2010 and gave birth to the Nigerian Content Development Board (NCDMB), has been instrumental to the promotion of the development and utilization of indigenous capacities in Nigeria.

Following the signing of the Act into law, the NCDMB was established to create and utilize indigenous capacity in Nigeria’s oil and gas industry which hitherto had been dominated by foreign entities.

The NCDMB’s unique strategies in overseeing the implementation of the NOGICD Act has resulted in an ever-growing success story of improved local content in the Nigerian oil and gas industry, and this has continued to attract a deluge of accolades to the Board and its leadership.

Participation of local organisations in the development of a country’s resources is very critical as it is an essential ingredient for any nation that wants to create a thriving economy for its population.
Such participation and attendant development can only become a reality if it is hinged on the adoption of local content philosophy.

Between 2010 and 2017, the Board was able to spearhead the growth of Nigerian Content level from 5 per cent to 26 per cent and now 30 per cent through systematic increase in capacity utilisation of the local supply chain providing services in manufacturing, fabrication and construction, engineering, marine operations and logistics, well drilling, inspection testing, certification, and project management. Growth was also achieved through utilisation of indigenous manpower in oil and gas operations.

To consolidate on the gains going forward, the monitoring board, two years ago launched its 10-year Strategic Roadmap to move Nigerian content in the oil and gas to 70 per cent by the year 2027. The Nigerian Content 10-Year Roadmap would enable the nation to start reaping the full benefits of its oil and gas resources, with clear linkage to other sectors of the economy.
According to the Executive Secretary of the NCDMB, Engr. Simbi Kesiye Wabote the roadmap documents the short, medium, and long-term targets to increase Nigerian Content performance to 70 per cent by 2027.

The key rewards from the implementation of the 10-year roadmap are the creation of 300,000 jobs from industry activities and the retention of $14bn in-country out of the $20bn annual industry spend.

The execution of these initiatives will go a long way towards the attainment of the objectives of the Board’s 10-year strategic roadmap, one of which is to achieve70% local content by 2027.

Relying on published expert outlook, news reports and industry data obtained from the Board, Valuechain analyzed how the current leadership of the NCDBM has fared so far in transforming these initiatives into reality.

A deep dive analysis of the 10-year-roadmap show that the Board hinged its plans on five strategic pillars and four enablers, each of which address key focus areas for development of Nigerian content: The five pillars are namely: Technical Capability Development, Compliance and Enforcement, Enabling Business

Environment, Organisation Capability and Sectorial and Regional Market Linkage.
The four enablers are Funding, Regulatory Environment, Collaboration and Stakeholders Engagement and Research and Development.

On the Technical Capability pillar, available statistics show that the Board has moved the Nigerian Oil and Gas Park Scheme (NOGAPS) from mere plans on paper to actual construction in two pilot locations – Odukpani in Cross River and Emeyal 1 in Ogbia Local Government of Bayelsa State. Each of the parks will create employment for 2000 persons when fully operational and will spur manufacturing of critical oil and gas equipment, tools and spare parts close to oil fields.

The NCDMB is spearheading the Project 100 Initiative and 60 oil and gas start-ups have been identified. The Board is also sponsoring the deployment of special interventions for their incubation, maturation and growth into world class service companies. This intervention would include capacity building, funding and access to market.

Findings further show that the Board has also commenced International Certification program for marine personnel. The cadets are already on board foreign vessels and would stay for 12 months, which would qualify them to be awarded the Certificate of Competence (COC), with which they can work in the Nigerian waters and overseas. The program will address the deficit of trained cadets in the maritime and oil and gas industries and reduce the dependence on foreign personnel in the marine operations.

The Board has also reportedly provided equity investment to catalyse the establishment of 5,000 barrels per day modular refinery by Waltersmith Refining & Petrochemical Company Limited in Ibigwe, Imo State and in the 12,000barrels per day Hydroskimming Modular refinery by Azikel Petroleum Limited at Obunagha, Gbarain, Bayelsa State.

Available data show that the Waltersmith refinery is on track for completion later this year while the Azikel Refinery would be completed in 2021. About 300,000 liters of diesel per day are expected from the Waltersmith refinery in addition to various volumes of naphtha, kerosene and fuel oil while Azikel refinery will produce about 1.5million litres or 50 trucks of petrol daily, including 170,000liters of diesel, and other products. Both modular refinery projects have huge prospects for jobs creation, value retention, petroleum products availability and the development of in-country capability and they fit perfectly with the Board’s vision to serve as a catalyst for the development of Nigeria’s oil and gas sector.

On the second pillar, Compliance and Enforcement, it was gathered that the NCDMB had put in place seven companies to assist in carrying out specific and specialized monitoring and compliance functions in the upstream, midstream, and downstream sectors of the industry. The Board also deployed chartered accounting firms to carry out forensic audit of Nigerian Content Development Fund (NCDF) remittances. The Forensic Audit started in November 2018 and has revealed huge amounts of non-remittances from operating and service companies. At the moment, some companies have owned up to their indebtedness and have started addressing their infractions while a few companies have remained recalcitrant. The Board has concluded plans to hand over such companies to the Economic and Financial Crimes Commission (EFCC) for prosecution.

On the pillar for Enabling Business Environment, the Service Level Agreements (SLAs) NCDMB signed with the Nigeria LNG, International Oil Companies (IOCs) under the aegis of the Oil Producers Trade Section (OPTS) and Independent Petroleum Producers Group (IPPG) have helped to shorten the NCDMB interface on the tendering cycle in the Oil and Gas Industry from 36 months to nine months. This has also enhanced broad compliance with the requirements of the Nigerian Content Act and led to significant reduction in the unit cost of oil production in Nigeria. During the last review, major operating companies, including SPDC/SNEPCo, Chevron, Total E&P and First E&P all rated NCDMB very high on the implementation of the SLA.

Highlights of other aspects of roadmap pillar are: Sectoral and Regional Market Linkages (extending collaboration with other sister agencies and MDAs with a view to improving patronage of local companies); Organisational Capability (further developing the capacity and capability of staff members); Regulatory environment (working with the Office of the Minister of State for Petroleum Resources for sign-off of the Ministerial Regulations, and the Nigerian Content Committees in the Senate and the House of Representatives for extension of coverage of the NOGICD Act); Collaboration and stakeholder engagement; and-Research and development initiative leading to the launch of a $50m intervention fund as part of efforts to deepen domestic research and development (R&D) activities in the oil and gas industry in Nigeria.

On Funding, the NCDMB have so far disbursed a total of $160m out of the $200m Nigerian Content Intervention Fund (NCI Fund) to qualified firms, as part of efforts to provide accessible credit for Nigerian oil and gas service companies and community contractors with single digit interest rate and one year moratorium.
The Executive Secretary recently confirmed that the Board would collaborate closely with the 9th National Assembly to complete the amendment of the NOGICD Act, so as to extend it to key sectors like Power, Construction and Information Communication Technology.

It is noteworthy to mention recent strides through partnership by the Board that has seen the establishment of the Polaku cooking gas cylinders manufacturing facility. The NCDMB is partnering with a gas production and manufacturing company for the establishment of 400,000 per annum Type 3 LPG composite cylinder manufacturing plant in Polaku, Bayelsa State. This is in line with its resolve to develop facilities that will improve Nigeria’s ability to meet domestic gas demand.

NCDMB and the Oil Producers Trade Section (OPTS) have also mapped out plans to develop marine vessels standards for the oil and gas industry. The standards, which will be applied in marine tenders, will state uniform technical specifications that the marine vessels must meet to be eligible to operate in the industry.

The impact of Nigerian Content in the oil industry has no doubt stimulated other sectors like Information & Communication, Automobile, Construction and Power to adopt some of the templates in their policy formulations.

Some African countries like Kenya, Congo Brazzaville and Uganda as well as Gabon and Angola have come to Nigeria in the past for mentorship on Local Content initiatives.