FG says committed to local content development

The Nigerian National Petroleum Corporation (NNPC) has reiterated its determination to maximise the participation of Nigerians in local projects to raise the bar of Nigerian content policy.

The Group Managing Director, NNPC, Dr. Maikanti Baru gave the assurance at the 11th Oil Industry Achievement award, organised by the Petroleum Technology Association of Nigeria (PETAN) in Lagos on Thursday evening.

The theme of the paper is: “Local Content Compliance in an Extended Low Price Environment’’.

Baru said that Nigeria needed to take back most fabrication work and other services in the industry from foreign yards.

He said that this would increase the contribution of the industry to the nation’s GDP, adding “it is the corporation’s goal to achieve much more’’.

According to him, in our determination to maximise participation of Nigerians in our projects and domicile project activities in the country.

“We in the NNPC have been implementing the Nigerian Content Policy as enshrined in the Nigerian Oil and Gas Industry Content Development Act since before the enactment of the act in 2010.

“The development of domestic in-country value addition capacity capable of transforming Nigeria to self-reliant exporter of refined products, energy, power and oil and gas services,’’ he said.

The NNPC boss said that PETAN had been a veritable platform for Nigerian oil and gas entrepreneurs.

He said that the platform also encouraged exchange of ideas on the realisation of the Nigerian content aspiration and ways of achieving possible improvements.

He said that the choice of the topic was very relevant to the nation’s oil and gas industry of today, given that it was largely characterised by high cost of production.

He said that it would address high percentage of foreign content to the detriment of local industry, high expatriate quota utilisation by international oil companies and ever rising repatriation of profits and incomes.

Baru, therefore, challenged PETAN to strengthen its resolve in vigorously pursuing its mission of promoting the domesticating of petroleum technology by striving for fair and extensive patronage into a new phase.

He advised that association should consider the current realities of the industry so that its operations would align with efforts by other players to deliver efficient services to stakeholders and deepen in-country value addition.

He reaffirmed NNPC’s commitment to compliance with the provisions of the Nigerian Content Act to increase in-country value addition and support all relevant stakeholders in achieving this noble objective.

The NNPC boss implored the operators to join NNPC in encouraging PETAN members by settling their debts.

He said that recently, NNPC had also permitted the participation of Nigerian companies in crude oil lifting.

“For the first time, the local companies are now allowed to participate in the bidding process of crude oil lifting.

“This is an activity that was initially exclusively reserved for foreign companies,’’ Baru added.

He said that the corporation is also poised to promote development and commercialisation of home-grown technology through its Research and Development arm.

He said that NNPC was currently collaborating with Nigerian Content Development and Monitoring Board (NCDMB) to set up research clusters that would specialise in different areas of the oil and gas activities.

According to him, as a nation, it is time to look at the compliance level of the extant legislation and policy very closely.

The Executive Secretary, NCDMB, Mr Simbi Wabote said that the board was working with the Ministry of Petroleum Resources and the Bank of Industry to finalise the approval of the Nigerian Content Intervention Fund.

Wabote said that once the board concluded the process, the funds would be available for direct lending at single digit and longer tenor for qualified companies.

“At the board, we have maintained that domiciliation of industry activities reduces cost of operations.

“Participants at the recent Practical Nigerian Content Conference also reinforced this view that a strong and viable local supply chain ultimately helped in reducing cost of projects.

“However, the challenge for us is to devise new strategies, to come up with pragmatic schemes to validate the idea that Nigerian Content delivers tangible benefits both in the short and long term.

PETAN’s chairman, Mr Bank-Anthony Okoroafor said that the Nigerian oil and gas industry was bleeding, adding that the crude oil price declined had led to massive cut of workforce and projects cancellation.

According to him, this year has been filled with challenges in the oil and gas industry from the global trend of crude oil price, which seems to have settled at 46 dollars per barrel.

“Vandalisation of our pipelines and insecurity in the Niger Delta region. This had created a lot of unpleasant impacts in our industry,’’ he said.

Okoroafor said that the situation had not helped the activity of the indigenous operators, adding that many members were suffering at an unprecedented level.

He said that many members could not service their loans or pay salaries as at when due.

“It is very sad to lose capacities that took Nigerians several years to build,’’ he said.

NAN reports that Baru and seven other managing directors were conferred awards for their excellence performance.

Other organisations that received awards include Shell Petroleum Development Company, Waltersmith Petroman Oil Ltd., Oilserve Ltd., and ENI subsidiary of Nigerian Agip Oil.