PROJECT 100: Next Level of Nigerian Content
Leaving no stone unturned, the Nigerian government has finally set a broad based agenda to provide institutional support to 100 indigenous oil and gas service providers, with NCDMB driving the process to the next level, and in line with its primary constitutional mandate.
–By Yange Ikyaa
The Federal Government of Nigeria, through the Ministry of Petroleum Resources, in conjunction with the Nigerian Content Development and Monitoring Board (NCDMB), recently launched what it called Project 100, which is a special purpose vehicle specifically fashioned to provide institutional and financial support to qualified 100 indigenous oil and gas service companies operating in the country.
The project is broadly targeted at indigenous companies offering seismic, marine, engineering and drilling services, among others, and will provide financial and non-financial, as well as technical support and access to market for the beneficiary companies.
The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, who performed the official launch of the project, said he initiated Project 100 as an oil and gas industry intervention to identify, recognize and nurture wholly owned indigenous Nigerian oil and gas service companies into large scale players that will create high impact in the economy.
“The Ministry of Petroleum Resources is promoting Project 100 as an oil and gas industry intervention to identify, recognize and nurture wholly owned indigenous Nigerian oil and gas service providers into large scale players that will create high impact in the economy in terms of job-creation, technology development, wealth-creation and other local content indicators, and NCDMB was mandated by the Ministry of Petroleum Resources to drive the project,” he said.
Engr. Simbi Kesiye Wabote, the Executive Secretary of NCDMB, said “Project 100 is an initiative of the Ministry of Petroleum Resources, alongside NCDMB, to look holistically at 100 wholly indigenous oil and gas companies and nurture them to the next level. We would enhance their capacities, support them financially through the NCIF and help them find opportunities in the industry, in collaboration with NNPC and its subsidiary, NAPIMS.”
According to Wabote, it is in our interest as a country to support companies operating in the oil and gas industry so that they can create jobs for our teeming population. We selected the companies transparently from our platform, NOGICJQS, with the assistance of KPMG and there would be another phase of selection in the coming weeks.”
With the involvement of world renowned consultant, KPMG, in the selection process of the first 60 of 100 companies billed to benefit from this programme, the public expression by Wabote and Kachikwu that the process of selecting the beneficiary companies was very clean and transparent could be seen as credible.
According to Wabote, “a lot of evaluation criteria were used to trim the number of companies who applied to be considered for participation under the Project 100 scheme, adding that 60 companies were chosen among thousands of service companies who applied.
The NCDMB and the Bank of Industry (BOI) had in 2017 launched a $200 million Intervention Fund for Nigerian companies involved in manufacturing in the oil and gas industry.
Wabote said, however, that the Board was finalizing another financing model, stressing further that “within the next couple of months, we will launch another financing scheme perhaps without all the bottlenecks that we see today with the BOI and these selected companies will be our focus areas and beneficiaries,” he said.
This project consists of non-financial interventions, as well as financial linkages support. The non-financial support interventions include policy interventions, research and development, business insight, technical and business management skills, as well as access to markets in the oil and gas industry value chain, with primary focus on upcoming projects with Nigerian content opportunities.
Policy Interventions
Project 100 will lead mini policy workshops to diagnose challenges of the target beneficiary clusters and consolidate policy recommendations for consideration of policymakers and regulators. Such policy recommendations may include advocacy for solutions that address business environment challenges or bottlenecks.
Research & Development
Project 100 will drive R&D collaboration between industry research centres and universities. Such linkages would enable universities and research centres to participate in the R&D processes of oil companies on the basis of major technical challenges that require new R&D to be solved.
Business Insights
Project 100 will provide an open knowledge repository, containing essential industry information, articles and statistical data, which will now be accessible to all its beneficiaries.
The repository will allow for easy-to-search rich content, and will possess a user-friendly interface, and feature a robust analytical tool.
Technical and Business Management
Project 100 will manage the provision of technical capacity building and Business Performance Improvement (BPI) services and trainings to beneficiaries through its partners. This will address the dearth of capability of beneficiaries by developing both the business skills necessary to run their businesses and interface successfully with oil companies, and also the technical skills to use and apply international oil and gas technologies.
BPI interventions will support programmes that offer structured and/or ad-hoc assistance in response to particular business needs, as well as identify opportunities for local supply.
The various services under BPI will address business and management operational deficiencies, such as governance/operating structures and business process design, among others. The services will also include visitation of experts to diagnose and develop improvement strategies and implementation plans for beneficiaries.
BPI Trainings are training programmes aimed at addressing business and management competency gaps, including skill development for leadership and employees.
It also has structured trainings, which are intensive and business management training programmes, such as planning, financial management, and business plan development, among others, which are run over a period of time.
There are also ad-hoc trainings, which include seminars/workshops to help beneficiaries improve in identified generic improvement areas, such as “doing business with oil companies,” which can cover topics ranging from the IOC bidding and steps to ISO certification process.
Access to Market
This will be tackled by Closing Information Asymmetry, Improving Quality and Safety Standards, and Addressing Limited Local Jobs.
Closing Information Asymmetry
Information gaps will be addressed on both the side of the suppliers and that of the operators by allowing Project 100 beneficiaries to participate in where oil and gas operators discuss future projects and service needs, as well as provide opportunities for business development. This is intended to address the difficulty of local suppliers in identifying projects for which they might successfully bid to supply goods and services to operators.
Project 100 will spearhead the utilization of a service provider database, where service providers can promote themselves on the basis of certifications, competencies and track records. This database will serve as a one stop shop that will remain accessible to all operators for the identification and selection of service companies.
The platform will also address the difficulty and cost of oil companies in identifying and assessing the suitability of local suppliers as a result of short track record or equity to back up their offers.
Improving Quality and Safety Standards
There is a provision in the project design for the support of beneficiaries with the aim of identifying firms for technical assistance and targeting such assistance to key areas for improvement for the receipt of relevant international certifications that are necessary to work for large operators. This will address the motivation of oil companies to source only from internationally certified suppliers that have been granted international certifications, such as ISO, API, and ASME, among others.
Addressing Limited
Local Jobs
Project 100 will lead the relevant inter-governmental collaboration required to create access for branded beneficiaries to provide service to operators in other African countries.
Currently, there are numerous projects in the pipeline that may require the services of local companies, if upgraded and certified to internationally acceptable standards through the gradual but carefully tailored process being championed by the Nigerian government through NCDMB.
“Local content is a marathon, not a sprint. We are determined to grow Nigerian content in the nation’s oil and gas industry by 70 percent within the next 10 years. The target includes generating 300,000 jobs, retaining $14 billion in-country from the industry’s annual spend, as well as engender manufacturing and increase oil and gas contributing to the nation’s GDP,” said Wabote.
Some of the upcoming projects in the upstream, mid-stream and downstream sectors of the Nigerian oil and gas economy are as follows:
The first 60 different beneficiary companies selected under NCDMB’s Project 100
1. Adroit Investment Limited
2. Alpatech Engineering Nigeria Limited
3. Ankor Pointe Integrated Limited
4. Anzor Nigeria Limited
5. B2 Oil & Gas Project Limited
6. Beam Energy Limited
7. Blisston Nigeria Limited
8. Bridgsite Nigeria Limited
9. Cardinal Integrated Projects Enterprises Limited
10. Cle-parinna International Limited
11. D-Well Engineering Nigeria Limited
12. Eazroc Limited
13. Ellaleon Ventures Limited
14. Encapsulate Nigeria Limited
15. Energeria Limited
16. EST Master Construction Limited
17. Everest Engineering Services Limited
18. Fairtex Integrated Services Limited
19. Faithplant Global International Services Limited
20. Fleet Offshore Global Maritime Services Limited
21. Flind Nigeria Limited
22. Folstaj International Limited
23. Gamstec Integrated Services Limited
24. Gemstone Energy Services Limited
25. Geoterrain Nigeria Ltd.
26. Geoville Consulting Ltd.
27. Gmunu Limited
28. Gredor Nigeria Limited
29. Harrybeat International Services Limited
30. Henry Wilson Limited
31. Hollifield Industries Lt.d
32. Independent Project Monitoring Company Limited
33. Jahcon International Ltd
34. JiteProjekts Limited
35. Jomason Resources Ltd
36. Karsto Global Resources Limited
37. Kurusu And Associated Industries Limited
38. Libertine Global Solutions Limited
39. Loitte Engineering Limited
40. Mafuta Energy Services Limited
41. Milat Nigeria Limited
42. Narag Energy Solutions Limited
43. Nec Technical Systems Ltd
44. Nine Angle West Africa Limited
45. Nowerox Nigeria Limited
46. Nymagx Energy Services Limited
47. Oasis Corporate Systems Limited
48. Oilfield Management Services Limited
49. Olu Tee Engineering International Limited
50. Rit-beulah Engineering Services Limited
51. Rojel Nigeria Limited
52. Sage Integrated Marine Services Limited
53. Skymark Energy & Power Nigeria Limited
54. Sprovab Nigeria Limited
55. Techniques International Corporation Nigeria Limited
56. Total Quality Integrated Services Limited
57. Utis Energy Services Limited
58. Wartadef Limited
59. Weltek Limited
60. Zigma Limited
Upstream
Zabazaba FPSO, with different job opportunities, such as topside module fabrication, HSE, engineering and project management, marine operations and logistics services, materials and procurement, drilling and completion materials, catering services, sub-sea production systems, fabrication and construction, ancillary drilling services, rigs, as well as installation and hook-up services.
Development of OML 147, which will need engineering services, drilling services, training/consultancy services, procurement services, fabrication and construction, workover rig, installation and commissioning, land rig and marine vessel services.
Full field development of Owowo, Bonga, Wosi Projects is also pregnant with opportunities in engineering design, fabrication and construction, materials and procurement, drilling services, valves testing and maintenance services, catering, telecommunications/CSS, procurement, engine and pump, and repair facilities.
Okpai Phase 2 is another project that will require fabrication and construction services, engineering and project management, HSE, catering, transportation services, logistic services, and materials procurement.
Midstream
TNGP Phase 1 is a midstream project that will need coating services, pipeline fabrication and construction, engineering and procurement services, health, safety and environment services, training services and procurement services, while NLNG Train 7 will continue to be in need of engineering services, construction services, manufacturing and fabrication services, HSE, training and certification, technology, materials procurement and supply services, logistics services, as well as inspection, testing and certification.
Another midstream opportunity for indigenous service companies lies in the gas supply demands from the Niger Delta Power Holding Company (NDPHC). Here, there exist multiple opportunities in the form of coating services, pipeline fabrication and construction, engineering and procurement services, pig traps (launcher and receiver), as well as engineering design.
Downstream
In the downstream of the Nigerian oil and gas industry, project opportunities also abound in the area of expanding DS gas market, particularly in the fabrication of LPG plants and equipment, manufacture of consumables, such as cylinders and tanks, as well as in the manufacturing components.
The Port Harcourt, Kaduna, Warri and other modular refineries also hold opportunities for business, such as engineering design, procurement services, manufacturing and fabrication services, process vessel construction, rotating equipment maintenance, and training services.
Financial Linkages
On the side of financial linkages, there is support for access to finance, which entails the provision of letters of introduction to requesting beneficiaries to be included in beneficiary application for intervention funds and other credit facilities from public and private financial institutions.
There is also a provision for support with packaging and conducting readiness reviews of beneficiaries’ applications for funds.
The financial linkages support will also help in highlighting synergies and collaborative opportunities between beneficiaries, as well as with other players across the oil and gas industry to enable them acquire new capacities and take on larger projects.
On the initial $100 million for manufacturing in the oil and gas, it is said that BoI would be responsible for its deployment to qualified contractors. NCIF provides long-term facilities to contributors to NCDF at eight per cent interest rate.
“As soon as we finalise the process for the release of the initial $100 million (about N31 billion) to BoI for the pilot phase, contributors to the Fund with manufacturing proposals in the oil and gas industry, can approach BoI for the NCIF facility, which has a single obligor limit of $10 million and tenor of up to 5-10 years,” Wabote maintained.
Upstream contractors are required by law to pay their contributions into the Fund put at 1 percent of their earnings, which is now utilized on developmental initiatives in areas such as manufacturing of pipe mill, Nigeria Oil, and the Gas Park scheme (NOGaPs), which is ongoing at five different locations, including one at Polaku in Bayelsa State.
There is also a direct focus on training in areas such as geosciences, artisan and machinist training, oil spill management and environmental remediation training.
The Fund also encourages sensitization programmes on supplier development, and as well support to Nigerian Content Consultative Forum (NCCF) and Nigerian Content Investment Forum (NCIF).
The LADOL Integration Yard Development in Lagos benefitted from the intervention through the 30 per cent partial guarantee and 50 percent interest rebate, while Stars Investment, involved in vessel construction benefitted through 25 per cent equity guarantee.
Also, Vandrezzer, which is into contract financing, got 30 percent NCDF partial guarantee and 50 percent interest rebate.
It is determined by law that contractors’ currency
of remittance to NCDF must be the currency of the contract, adding that
conversion of currency will be allowed only if the transactions currency is
outside of any of the four major currencies such as United States Dollar, Great
Britain Pound, Euro and Nigerian Naira, and with the approval of NCDMB. In such instances, the conversion will be
made to US Dollars.
