OTC: Experts chart course for Nigeria’s oil sector
The future of Nigeria’s oil and gas; the nation’s drive for increased local content and the need to attract foreign investments, collaboration and partnerships in the sector came up for discussion last week in Houston, Texas, United States, at the inaugural Nigerian Content Investment Forum, (NCIF).
The NCIF which turned out to be Nigeria’s only event of consequence at the 2015 OTC was organised by SweetcrudeReports – Nigeria’s foremost energy publication in conjunction with partners, The Guardian Newspapers and the Nigerian Content Development Monitoring Board, (NCDMB).
Speakers and delegates at the Forum were unanimous on the potentials of Nigeria as a preferred investment destination, taking into account the country’s human resources, its leadership position in Africa, huge mineral resources – including oil and gas and the possible stability the new government coming into office on May 29 will bring to the nation, especially the oil and gas sector.
Nigeria depends on oil for over 80 per cent of its foreign exchange earnings signifying the importance of the sector to the nation. Chairman Africa, Schlumberger, Sola Oyinlola, who chaired the event noted that the collaboration which has birthed the NCIF has the capacity to facilitate interfaces between Nigeria and sub-Saharan Africa on one hand, and other parts of the world.
Oyinlola noted the many success stories of the Nigerian Content Act within a short period, stating that the Petroleum Technology Association of Nigeria, PETAN, has become a formidable force in the Nigerian petroleum scene, through the support of the Act.
But, he maintained that despite the success of the Act, deep challenges persist in its implementation, including the lack of in-country financial capacity to undertake big ticket transactions and inadequate infrastructure such as the deplorable state of supporting industries, for prototyping, manufacturing or assembling locally engineered solutions.
Other challenges, according to him, are the lack of technical capacity, dearth of research and development institutions and culture; and the limited access to technology limiting the possibility of innovation and domestic technological creativity as well as the lack of supporting import duty regimes.
For the Nigeria Content Act to achieve its full potentials, Oyinlola said these challenges must be addressed through continuing pursuit and commitment by the NCDMB and the Ministry of Petroleum Resources.
“The critical missing link between strategy and action must also be addressed to avoid the persistent incapacitation that public policy initiatives and actions many government programmes and projects have suffered,” Oyinlola said.
He added that the NCDMB and the Ministry of Petroleum must collaborate with development partners, including international oil companies, IOCs; original equipment manufacturers, OEMs, and multilateral agencies for overall success of the Nigeria Content Act.
Speaking on the global challenges of low oil prices and Nigeria’s “peculiar domestic challenges, the Schlumberger chief stated that despites these, “the nation was brimming with investment opportunities – with a high growth economy, a large, well educated but under-employed youthful population, agencies of government such as NCDMB working to optimise these opportunities, a PETAN domesticating petroleum technology, Nigerian independents developing newly acquired E&P assets and international service providers such as Schlumberger, GE, and a host of others continuing to operate in-country”.
According to him, the new government coming into office on May 29, has its work cut out for it while the oil and gas industry awaits with bated breath new policy directions from the government.
Besides Oyinlola, other speakers at the event included the former Executive Secretary of the NCDMB, Mr Ernest Nwapa; Brian McCleary, he Senior Officer in charge of the Commercial Section at the US Consulate in Lagos; Linda Anukwuem, Chairperson of the Mayor’s International Trade and Development Council, City of Houston; Mr. Manssour Jarmakani, Executive Director, Nigerdock and Mr. Fubara Anga, Principal Partner, Aelex, among others. Also speaking at the event, Ernest Nwapa, who was until last week, the executive secretary of the NCDMB, dwelt on the achievements of the board, lauding local companies for their successes in playing active roles in the oil and gas sector in terms of providing personnel and technology required in the industry.
He spoke of the government’s industrial park scheme, inviting original equipment manufacturers, OEMs, from the United States, Europe, Asia and South America to take advantage of the scheme by establishing industrial plants in the park.
According to him, it was also for this purpose of establishing their presence in Nigeria that many of the SMEs that attended the NCIF had come to seek partners from the OEMs. Brian McCleary disclosed that the US ambassador to Nigeria had planned to attend the NCIF but had to deal with other pressing matters brought on by the ongoing political transition in Nigeria.
“There is a lot to be told about Nigeria, a country of 170 million and is probably larger than that.” He commended the initiative behind the NCIF noting that the US Secretary for Commerce, Penny Pritzker had led a business delegation of over 80 companies to Nigeria last year in the hope of entering business relationships.
In his contribution, Mr Manssour Jarmakani, the Executive Director, Nigerdock, pointed to his company as an example of the success story of the Nigerian content policy.
His company, he said, was currently handling high-tech projects that were hitherto handled abroad, thereby saving the nation huge foreign exchange and contributing to the growth of the nation.
Jarmakani said that in spite of the challenges facing Nigeria, the country provides a good atmosphere for investment, saying his company would continue to do business in Nigeria.
He identified three key factors necessary for the delivery of sustainable local content including projects; funding and training, adding that these are critical to capacity building.
Jarmakani who excited the audience, left them with a harsh-tag titled “ThumbsUpNigeria”, Mr Fubara Anga disclosed of the view that Nigeria provides the best tax incentives for investors than any other country in the world, maintaining, for instance, that was only in Nigeria that foreign companies are allowed to repatriate its entire profits.
In a welcome address, the Editor-in-chief of SweetcrudeReports, Mr. Hector Igbikiowubo, said the forum was put together to bring Nigerian oil and gas small and medium enterprises, SMEs, with manufacturing pedigree together with international original equipment manufacturers of components used in the industry.
Igbikiowubo said the forum aims to “create a sustainable platform for interaction between credible professionals and stakeholders in the oil and gas industry, particularly in Sub-Saharan Africa, USA, Europe, Asia and the Middle East.”
“We also intend to showcase the gains of the Nigerian Content Act and the opportunities for collaboration, growth and development contained therein,” he explained.
He said though there was good reason for investor apathy and apprehension owing to the negative narrative in the public space on Nigeria, there was equally a lengthy list of positive narrative.
“The generality of the people are good natured, hard working and fiercely desirous of being a part of the global fabric of industry, manufacturing, trade and commerce.” Packaged to run every year alongside the Offshore Technology Conference, OTC, also holding in Houston, this inaugural edition of the forum held at the landmark Houstonian Hotel in Houston, Texas.
The forum included a plenary session as well as a technical session focusing on Nigeria’s Oil and Gas Park Scheme, NOGaPS; Capacity development within Nigerian Content framework; Nigerian Content Development Fund implementation model among others. ; and Legal framework governing company operations.
There was also a panel discussion on the way forward for Nigerian Content, Unlocking opportunities for OEMs through NOGaPS, and fiscal incentives in Nigeria to attract foreign investors.
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