The Guardian’s Special Focus on leading champions of local content driving Nigeria’s economic growth: Part one
Over the last twelve years, Nigeria has grown to master the practice of local content, to the extent of mentoring other resource-rich countries such as Uganda in promoting their own industries. Nigeria is one of the few countries to have enacted a primary regulation dedicated to it, with a broad objective to domicile a share of the US$18 billion average annual spending on exploration and production by IOCs. Nigeria’s pursuit of local content has greatly facilitated the growth of local service providers and contractors. It has also fostered a mutually-beneficial relationship between international and local companies.
Signed into law in March 2010, the Nigerian Oil and Gas Development Act gives Nigerians the opportunity to be considered in the awards of oil blocks, oil field licenses and oil lifting licenses under its emphasis on increased entrepreneurship and domestic assets. The law set a target to increase the use of indigenous labour, materials and resources to 70% in all oil and gas projects in the country, as opposed to the previous 28%.
To strengthen the Act, the Executive Order 5 was created to improve local content and promote the application of science, technology and innovation towards achieving the nation’s development goals across all sectors of the economy with preference to Nigerian companies and firms in the award of contracts in line with the Public Procurement Act 2007. The Order also prohibits the Ministry of Interior from giving visas to foreign workers whose skills are readily available in Nigeria.
In this Special Focus, The Guardian examines the landmarks achieved in over a decade of the enactment of NOGICD Act 2010, not only on the accomplishments recorded by the Egina Project which has advanced the Nigerian Content but also through the contributions so far made an increasing list of Nigerian companies and local contractors, in various sectors, fabricating materials and producing components for major oil industry projects
This has continued to influence local value creation growth of indigenous firms, backward linkages and job creation.
How B2 Oil & Gas is improving local capacity through superior performance, professional integrity, by Adewoye
B2 Oil and Gas Projects Limited is a wholly indigenous oil and gas company that prides itself in providing end-to-end turnkey solutions in engineering, procurement, construction and waste management. The operational success of the company is its resolve to provide the best yet affordable services to her clients without compromising quality, health, safety and environmental standards expected for such services.
As one of the beneficiaries of the Project 100 sponsored by the Nigerian Content Development and Monitoring Board (NCDMB), the company has left no stone unturned in its pursuit of promoting and investing in local capacity through manpower training and fabrication of equipment. According to the Managing Director/CEO, Bayo Adewoye, he explained that the company has always given preference to indigenes and indigenous companies in the execution of projects in its drive to contribute to the local content initiative.
“B2 Oil & Gas Projects has contributed to the local content initiative in several ways. We ensure that we make it a policy to develop fellow Nigerian registered companies and Nigerian personnel in particular. If we are unable to identify companies or individuals that can execute the job in the locality where we have a project, then we source for Nigerian registered companies or individuals with the necessary expertise and resources to execute the job. It is only after searching for Nigerian owned companies or Nigerians without success that a subcontract for the supply of specialized services, equipment, materials and personnel can be awarded to foreign enterprises”, said the B2 Oil and Gas Projects CEO on how the company has been contributing to the development of in-country capacity.
Speaking further, he explained that the deliberate effort to grow local capacity through the NOGICD Act by the NCDMB in exploration and production, engineering, construction, drilling and fabrication is a laudable venture which has been fundamental to the promotion of the development of indigenous capacity in the Nigerian oil and gas sector.
Adewoye said, “Nigeria as a nation has benefited immensely from the Act as evident in the economic wellbeing of the country. We are not there yet, but we can see a tremendous increase in the availability of local capacity in oil exploration, production, development, transportation, and several other operations in the Nigerian Oil and Gas industry. However, there are certain challenges impeding growth in the industry.”
“One of the major challenges faced in the industry is inadequate investment in research and development and I think the government needs to pay attention to this. The poor investment in R&D has really slowed indigenous progress in the technological advancement in the industry. Another challenge is the issue of insecurity. One of the surest ways to get rapid skills and expertise development is by the transfer of technological skill and expertise to be achieved through on-the-job understudying of experts. However due to the security state of the country, experts are afraid to come and work here, thus, giving us an increasingly less opportunity to understudy them. The government needs to address the security issues in the country head on”, he advised.
How local content enhanced Dovewell’s contribution to Nigeria’s economic growth, by Ajala
Dovewell Oilfield Services Limited is a fully Nigerian owned oil and gas service company with primary focus to employ specialized, technical expertise and motivate its team of professionals in contributing positively to the Nigerian Petroleum and Energy main industry, in particular, and West Africa in general. Prided as a powerhouse of technology, creativity and expertise, Dovewell possesses unrivalled problem-solving proficiency and acumen in the Petroleum industry.
The depth and variety of oil industry knowledge, experience and expertise available within Dovewell Oilfield Services Limited and Principals lends credence to the earlier assertions. The company is led by a team of seasoned oil industry professionals with an excess of 25 years combined hands-on and top management experience in all phases of the upstream Oil and Gas Industry in Petroleum, Mechanical, Production Engineering and Materials Procurement services backgrounds. This is in addition to a wealth of experience and technology of our affiliates and technical partners.
Being a force and significant player across the entire value chain of the oil & gas industry beyond Nigeria,the company is poised to deliver solutions to client’s technical problems and provide project management services as needed. Dovewell’s culture is one of focused, innovative and entrepreneurial management, which brings effective services to our customers, through communicative teamwork, combined with efficient business and information technology systems.
Tunde Ajala, Founding Executive Director, Dovewell Oilfield Services Limited, and an Official Member of Forbes Business Council, spoke to The Guardian on Dovewell’s industry knowledge, experience and expertise, technology driven-operations, amongst other issues. Excerpts ..
The Local Content Act in Nigeria was enacted twelve years ago. Can you give an insight on the impact of the policy and attendant benefits in its implementation, especially in the Nigerian Oil & Gas Industry?
The Nigerian Oil Industry was originally the exclusive domain of the International Oil Companies (IOCs) in areas ranging from exploration to production, refining and trading. Even, the upstream operations were initially controlled by expatriate companies, such as Shell and Esso. Intervention by the Federal Government resulted in the nationalization of assets of the major oil players.
The Nigerian Content Law has impacted a lot on indigenous companies in the sense that previously the IOC’s and EPC’s engage foreign companies directly on projects but the local content law has brought in caution that is presently stimulating joint venture arrangements between indigenous and technically competent foreign oil firms in execution of projects with penalty on defaulters. The policy has helped indigenous companies to have technology transfer while working with expatriates on such projects. Local personnel acquire the technical know-how and managing the resources.
Secondly, there has been higher participation of small to medium-sized firms within the industry and subsequently this has enhanced value addition to the nation.
Also, there has been Increased Contract Awards to Existing Small to Medium-Sized Firms and this in turn has increased revenue for the companies. By engaging Nigerians on the projects, our unemployment rate is being reduced. The policy has given room for a high level of investment in the Oil and Gas industry as investments have been received from reputable international companies.
Finally, there has been an integration of the oil and gas industry into the mainstream economy through local refineries and petrochemicals.
Local Content Act plays a vital role in the advancement of the Nigerian Oil and Gas Industry and it also gives first consideration to Nigerian independent operators. This creates a platform for the Nigerian Company to contribute immensely towards the growth of the Nigerian economy. The act has encouraged the use of Nigerian made material and consumables which in turn amasses revenue for the country.
The local content act provides for the operation of a joint qualification system for the industry (NOGIC JQS) under the management of NCDMB. This is an interactive medium between companies and NCDMB to facilitate prequalification. So far, this has been resourceful in the sense that it is being used for record keeping and engaging skilled Nigerian workforce.
What would you say Dovewell Oilfield Services Limited has benefited from the policy after more than a decade of its enactment?
Local Content Act plays a vital role in the advancement of the Nigerian Oil and Gas Industry and it also gives first consideration to Nigerian independent operators. This has created a platform for Dovewell to contribute immensely towards the growth of the Nigerian economy.
The local content act and relevant regulations have made it mandatory for foreign owned companies seeking to carry out operations in the upstream sector of the economy to do so by involving Nigerians in the composition of the company. The act has been fundamental to promotion of development of Dovewell as we have been able to partake in various activities in the industry by virtue of the act.
Presently, there is stimulating joint venture arrangement between Dovewell and technically competent foreign oil firms in execution of projects and in country capacity building and this has helped reduce capital flight. The policy has helped indigenous companies like Dovewell to have technology transfer while working with expatriates on projects. Dovewell ensures Local personnel acquire the technical know-how and managing the resources. We have technicians broaden their technical know-how whilst working with expatriates.
The policy has given Dovewell the leverage to contribute tremendously towards the development of the Nigerian economy through opportunities to bid and win turnkey contracts which has helped to ensure steady inflow of revenue in the organization. The award of different oil contracts has created revenue in our organization which in turn has given us room to ensure Nigerians are gainfully employed thus reducing the level of unemployment.
Similarly, the establishment of in-country production industries such as valve assemble and valve manufacturing yard, tubular and casing treading yards in collaboration with our foreign OEM’s.
In essence, Local content has helped to build the capacity of Dovewell and to provide more opportunities for participation in business. It has provided direct and indirect opportunities for employment for Nigerians and procurement to home nationals, and also fostering the development of local skills, technology transfer, and use of local manpower and local manufacturing in capital projects awarded to Dovewell.
Are you convinced that the Act is achieving its mandate on backward integration and repositioning Nigeria to its rightful place as the truly leading economy in Africa?
Government’s objectives for the local content policy initiative are quite noble but have been achieved to a certain percentage but it can be improved upon overtime. These objectives include the expansion of the upstream and downstream sectors of the oil and gas industry, the diversification of the sources of investment into the sector such that some of the funds would begin to come from local sources, the promotion of indigenous participation and the fostering of technological transfer. Other objectives are the increase in oil and gas reserves through aggressive exploration; employment generation for all categories of Nigerians; increased production capacity, and perhaps most importantly, the integration of the oil and gas industry into the mainstream economy through local refineries and petrochemicals.
Factors which mitigate against the value adding potential of local content include non-access to long term commercial funding; rising exchange rates; high interest rates; widespread use of global framework agreements and centralized procurement systems by international oil companies; low technological capacity; lack of experience and expertise in certain operating environments and difficult prequalification and bidding requirements for the award of contract are impediments to the full actualization of Government’s objectives.
One of the expectations of the local content companies is in the area of government improvement in granting manufacturing and capacity building soft loans to all local content companies that have been active in paying the local content statutory charges (1% NCDF) on all their transactions over the years as this will help the local companies to achieve more in their expectation from the government. These funds cumulatively can serve as pool of funds for loan to companies to have access for in country capacity building asides the high interest rate of Nigerian banks. This will help in pushing companies rather than the mandatory requirements of NCDMB to have in country capacity building and manufacturing with no government support and exposure to high lending rate. If government and NCDMB can look into this there will be a faster rate of growth with all the local content companies which will help the country’s revenue generation in terms of taxation etc.
Without any doubt, there are certain highly technical fields that require special skills/specific expertise, as well as huge investments that are yet difficult to access by indigenous firms. How can you describe how the Act has been addressing these challenges?
It’s quite obvious that there are specialized technical fields that require specific expertise which is difficult for local companies to tap into thus the act has given room for collaboration with foreign highly skilled companies as technical experts for execution of the services with some percentage of the activities to be domiciled in Nigeria. Equipment ownership has to be 50% for such foreign firm collaborating with Nigerian companies in which consumables and materials are to be sourced locally from Nigeria.
What is your view concerning compliance by multinationals, indigenous companies and other key stakeholders in the country?
On an average, multinationals, indigenous companies and stakeholders are in compliance with the local content principles and guidelines. Multi nationals have been able to demonstrate that 50% of the equipment intended to be used to operate or for a project in Nigeria is owned by their Nigerian subsidiaries who will apparently execute the project with highly skilled technical support from them.
What steps do you think government needs to take to address other obvious challenges in order to fast-track economic development and wealth creation for the nation?
The step the Government needs to take To Improve Nigerian Economy and enhance wealth creation include: Development of better systems of road networks, especially the express roads, efficient telecommunications, electricity and water supply systems; Discouraging Insurgency In Nigeria; and Patronizing Nigerian Made Products.
Others are Enacting and stability of good government policies that will aid the growth of businesses; Review of stringent economic policies, rules and regulations affecting local companies. Excessive taxation should be curbed; Encouragement of Innovations; Provision of soft loans with a friendly interest rate to small and medium scale companies; and Establishment of industrial estates to reduce the problem of locating industries in urban towns.
Lastly, it is Enabling Business Environment- Creating an atmosphere for business zones and innovation hubs with a friendly tax regime; Government should put in regulatory framework to the outrageous demands of some host communities as this will help the host communities to benefit in a more structured way.
Government improvement in granting manufacturing and capacity building soft loans to all local content companies that have been active in paying the local content statutory charges (1% NCDF) on all their transactions over the years as this will help the local companies to achieve more in their expectation from the government. These funds cumulatively can serve as pool of funds for loan to companies to have access for in country capacity building asides the high interest rate of Nigerian banks. This will help in pushing companies rather than the mandatory requirements of NCDMB to have in country capacity building and manufacturing facilities with no support from the government and exposure to high lending rate. If government and NCDMB can look into this there will be a faster rate of growth with all the local content companies which will help the country’s revenue generation in terms of taxation, etc.
TOPLINE: Leading Pipeline Integrity and Process Engineering Services Provider in the Oil and Gas Sector
Topline Limited was established with the purpose of creating value through timely delivery of quality services as a dominant player in the Nigerian oil and gas industry, Topline Limited has indeed lived up to her mission “to be a world class company that is globally recognized as the foremost service provider of integrated pipeline services in the oil and gas industry.”
Having completed a number of high profile oil and gas related projects within and outside Nigeria, it is no gainsaying that Topline has so far become a leading provider of pipeline integrity and process engineering services to the oil and gas industry. The exciting part is that the company has continued to engage indigenous manpower in the execution of projects, thus, making a mark for itself as a leading force in the propagation of the Nigerian Content Development.
Led by a visionary and thoroughbred professional in the person of Chinedu Maduakoh, he attributes the company’s success to its belief in innovation as a critical attribute for meeting and exceeding the expectations of its diverse clients.
According to Maduakoh, Topline “leverages innovation to drive continuous improvement in our internal business operations and processes and in delivering projects to our clients. Since inception, we have successfully executed a wide range of services to major oil operating companies within Nigeria, Ghana and UAE”, he said.
He explained that the energy sector has increasingly become more dynamic than ever, with the demand for the best solutions expected to keep rising. “At the same time, resources become more diverse, competition keener, and implementation of holistic engagement methods have become crucial. The sector operates in harsh and challenging conditions, often in remote and difficult terrains amidst hostility. To meet these challenges, we invest in new technologies and approach while always looking to balance risks and costs”, he said.
Speaking further, Maduakoh noted that the extensive experience in pipeline and process engineering available at Topline allows the company to provide specialized engineering and support services tailored to the needs of its esteemed clients. Through strong relationships with the most trusted names in the industry, Topline has continued to provide the most compliant, reliable, efficient, safe, and cost-effective engineering services. In a bid to deliver without compromise, he emphasized on the importance attached to working closely with clients, which guarantees a safe and reliable end-to-end service delivery.
It is therefore no surprise that Topline’s passion for workers’ welfare and leadership commitment shone through at the recently concluded Shell Leaders and Contractor CEOs Conference where the company emerged tops amongst over 3000 Shell Nigeria Contractors as it won two awards in the two categories available namely; Wellness and Care Category, as well as Leadership Commitment and Learner Mindset Category.
He stressed that “Based on the principles we have adopted through the continuous innovative approach applied to meet the needs of our clients and securing the environment, we are fully confident that Topline will sustain its development which will enable us achieve our goals as a globally recognized pipeline and process engineering service company in the oil and gas industry. It is also our firm belief that the Nigerian economy can only develop rapidly through individual and collective patronage of local content in terms of human and material resources.”
On the success of the NOGICD Act, Maduakoh maintained that the Act has helped in repositioning Nigeria and Nigerians as far as the oil and gas industry is concerned. He said, “As mentioned by the Executive Secretary of the Nigerian Content Development and Monitoring Board (NCDMB), Engr. Simbi Wabote, while speaking at a local content workshop in Bayelsa on the 27th of April, 2022, the Nigerian content in the oil and gas sector has grown to 42%. This is against the background of less than 5% local content prior to the enactment of the NOGICD Act in 2010 and attaining 26% in 2017. Going by the records presented by NCDMB, Nigerian Content will be repositioned within the oil and gas industry, and aid the retention of over $8 billion of the $20 billion annual spending in the oil and gas industry.”
BELL OIL & GAS: The Reference Point for True Local Content Development In Nigeria
With a culture focused on innovative and entrepreneurial management, which brings effective and efficient service delivery to its customers, through communicative teamwork, combined with efficient business and information technology systems, Bell Oil and Gas Limited has carved a niche for itself as one of the most reliable indigenous players in the Nigerian oil and gas industry having grown steadily in the last 20 years to become a preferred partner to IOCs and other indigenous firms.
Led by a result-driven entrepreneur in the person of Dr. Kayode Thomas, whose first-hand understanding of the complexities and issues facing the industry, together with strong grounding in the Nigerian culture and business environment has given the company an edge to respond more quickly to clients’ requirements in a unique way.
According to him, the success of Bell Oil and Gas can be pinned on its vision, focus on capacity development, relentless push to add value to its clients’ operations and strong partnerships. “We provide best-in-class services to the upstream sector of the Nigerian oil and gas industry. This is strengthened by turnkey capabilities through an extensive network of strategic technical partnerships and alliances. Against this backdrop, we have built real and measurable local capacity, invested heavily in people, technology and infrastructure”, he added.
As a major player at the forefront of local content development in the oil and gas industry, Thomas explained that the Nigerian Content Development Act has been of immense benefit to the country as evident in increased participation of local companies across several facets of the oil and gas value chain.
“We have seen the emergence of unprecedented number of indigenous E&P players, EPC outfits and a number of credible local oil services companies. The Act has led to the creation of more jobs, and of course further development of in-country capacity, with the NCDMB championing the implementation, monitoring, compliance and enforcement of the Act.”, he said.
With strong emphasis on technical expertise, customer focus, on-time delivery, partnerships with world-class companies, quality of service, professionalism and of course agility, he maintained that the vision of Bell Oil and Gas to become a reference point for true local content development in the oil and gas industry pre-dates the Nigerian Content Act.
Thomas noted that “As such, we live and breathe all things local content. We have contributed in no small measure via continuous investment in people and technology. Some of these include our rotating equipment workshop for pumps and compressors, our hose assembly workshop and our composite pipe fabrication facility, which is the only one in the country. Furthermore, we are putting finishing touches to our multi-million-dollar integrated facility at the Lekki Free Zone, Lagos, where we will be commissioning a state-of-the-art valve assembly, testing and maintenance plant as well as a pipe threading and machining plant.”
He harped on the need to address the issue of insecurity, delayed payments and funding among others. According to him, the conditions for accessing the Nigerian Content Intervention fund should be reviewed and the loan made more accessible. He also advised that the CBN can create additional pool of funds and/or mandate local banks to lend at single-digit interest rates for local capacity development projects.
In his opinion, punitive measures should be considered for delayed payment to local companies by the international oil companies and others who take advantage of smaller indigenous companies by not paying within the stipulated time, thereby stretching resources. A mandatory shorter payment term of no more than 45 days can also be considered.
He also urged the government to take the issue of security very seriously and put measures in place that will instil confidence in investors as Nigerian is considered both a high-risk and VUCA environment.
MONTEGO UPSTREAM: Impacting Nigerian Oil and Gas Sector, Through Innovation, Efficiency
Montego Upstream Services Limited is a wholly indigenous quality-driven oil and gas company with expertise in exploration and production, and midstream services. Through cost-effective and efficient solutions, the company has continued to be at the forefront in the delivery of customized solutions in Engineering, Procurement, Construction, Installation, and Commissioning (EPCIC), as well drilling and completion services. A true leader in building capacity across Africa, Montego Upstream has become a household name in the oil sector given its uncompromising position at providing mission-critical solutions throughout the life cycle of Greenfield and Brownfield projects via systematic planning and execution that deliver the best results. Owuze Nwuche, CEO, Montego Upstream Services speaks on the essence of building in-country capacity in the oil sector.
Twelve years of Local Content Development
The Local Content Act has been very beneficial to the Nigerian energy industry because it has enabled indigenous participation at higher levels of the oil and gas value chain. This has led to immeasurable knowledge and technological transfer, a reduction in capital flight, increased investment in infrastructure and capacity building. Nigerian companies like ours have been given opportunities which might likely not have been possible if the Act didn’t exist. It has enabled us to partner directly with strong international players and OEMs within the sector, to deliver exceptional services to our clients.
Operational strategy of Montego Upstream Services
Montego was set up with a vision to provide world class services and solutions for the energy value chain in Nigeria and Africa. With a number of operating companies across Africa, we are diverse enough to deliver our strategy across a range of markets, adding value as we go. Excellence has been our watchword since our inception, and our clients have come to trust us to provide the support they require to meet their operational and production needs. We ease operational friction and deliver seamless flow to our clients through our portfolio of multi-disciplinary services.
We started out just over ten years ago and, in that time, we have executed various projects in Nigeria and other parts of Africa. Our success can be linked to our strategy which emphasizes people first and a cost-effective approach to project execution. We believe in building long-term relationships with key partners, host communities and other stakeholders. This has been instrumental in enabling us deliver quality services.
Contribution to Local Content Development
Being an indigenous company ourselves, we are all for local content. We have been privileged to work on significant projects within the energy sector, and with these projects, we have embodied the requirements of both the Act and global best practices. While the Act has allowed us to participate more extensively in the sector, it has also empowered us to positively impact our local communities through socio-economic development. This means that we invest in people through employment and capacity building, as well as through various socio-economic indices like education, healthcare, rural electrification, gender inclusion and environmental integrity.
Opportunities in the Oil Sector and Montego Upstream’s positioning for the Future
In terms of opportunities, natural gas offers Nigeria and Africa another opportunity to catch up with the developed nations, which we missed the first time with crude oil. We are a continent with a fast-growing population, and we need energy to grow; energy to move, energy to transport and energy to produce. There is a shift in global demand for sources of energy and natural gas has become a key resource in today’s energy transition. This makes it important that we prioritize Africa first when it comes to gas development, utilization and energy security for the continent.
As a company we are excited about the opportunities in the sector, and the ways in which we can contribute in easing access to energy for the average Nigerian. One of our current projects is the rehabilitation of the Port-Harcourt Refinery which is scheduled to be up and running by 2023. In addition, we have several short-term and long-term projects for the development of energy infrastructure.
How JOENY is creating value through Local Content development, by Ukodhiko
“JOENY Holdings is a 100% indigenous company offering services to the oil and gas industry. We have been involved in developing local capacity since the NCD Act came to existence in 2010. We ensure that expatriate engagement is limited in our operations, while giving priority to the training of young Nigerians on both classroom and field operations. These young Nigerians are usually selected from a pool of young engineers extracted from the NCDMB portal. Our compliance with the deduction of 1% NCDF statutory levy for enhancement of growing businesses is not questioned”. These are the words of Engr. Jonathan Ukodhiko, Group Managing Director, Joeny Holdings – a leading indigenous firms committed to creating value by offering precision engineering solutions, civil construction, fabrication, maintenance and procurement services to the Oil & Gas, Petrochemical and the Infrastructural development sectors of the Nigerian economy.
Over the years, JOENY Holdings has been keen on ensuring that Nigerian Content is appraised through activities bordered around ensuring that clients’ expectations are met and on time. As a policy guiding the operations of the company, the right equipment and manpower are deployed prior to the execution of any contract.
“Our operational facility in Port Harcourt has several workshops capable of carrying out fabrication and maintenance activities, equipment testing, warehouse and stores for spares as well as other administrative and logistics activities. This setup is to ensure operational optimization when deploying our services to our clients”, he added.
Speaking further, the JOENY boss applauded the introduction of the NOGICD Act which according to him has been of immense benefit to indigenous firms operating in the oil and gas industry, as well as the nation’s economy.
“Nigerian contractors with adequate capacity are first considered during award of oil blocs, oil field licenses, and all projects for which contracts will be awarded. Indigenous personnel are given first consideration and when expatriates are to be engaged, Nigerians are assigned to understudy these expatriates in form of skill development and technology transfer, while the Nigerian Content Development Fund has proven effective in growing young businesses in the industry.
“Section 53 of the Act has stated that all operators, contractors and any other entity engaged in the Nigerian oil and gas industry shall carry out all fabrication works and welding activities in-country. Approvals can only be given for the importation of welded products for a period not exceeding three years if it is proven that in-county capacity is not sufficient for its production as stated in Section 11 of the Act. Without doubts, the Act is achieving its mandate on backward integration, but there is still more to be done”, he said.
However, he lamented the dearth of research and development centers with the capability to handle current technological realities. “The government can help in ensuring this is a thing of the past by funding universities and polytechnics, because one of our primary aims as a country is to go into deep water operations fully which will require some input gained from R&D clusters. Absorbing trainees engaged via the Human Capacity Development Initiative (HCDI) is another area that needs to be looked into because most of them find themselves jobless after completion of the training. It is the primary responsibility of the government to ensure job creation and this initiative would have been more effective if we had better job availability in Nigeria”, he added.
Currently, we are looking at expanding our capacity to manage the fast-growing opportunities arising from indigenous involvement in the petroleum industry. Though as usual, we still have our limitations which boils down to funding, however, our strategies are in place to ensure a balance between our input and out processes. Hopefully, in no distant time, JOENY will acquire her own oil well that will further promote the involvement of nationals in the oil and gas industry growth”, he responded on how the company is positioned for future opportunities.
BRADE GROUP: Driving Local Capacity With Global Expertise
BRADE is a proudly African brand, with a diverse portfolio in oil and gas, manufacturing and chemicals spanning across East and West Africa. Comprising of BRADE Consulting Limited, BRADE West Africa Limited, BRADE Petroleum and Energy Services, BRADE Oil and Gas Uganda, BRADE Chemical Solution, as well as Stefan and Kevin West Africa, the BRADE Group is strategically poised to deliver superior services targeted at improving the operating capabilities of companies in Africa and maintaining a worthy reputation for being innovative and conducting business under and according to the strictest business principles, while upholding the highest ethical standards of practice. Ese Avanoma, the Group Managing Director of the company gives insight into the company’s strategies as a champion of local content development in Nigeria.
Impact of the NOGICD Act on the Nigerian economy
The Local Content Act does help to grow local capacity, utilizing local resources in the process. Benefits from the industries are domiciled here and not taken out. Nigerian industries and banks benefit from the domiciled revenue, even the Insurance companies, and not resorting to exporting “value” to the Western world.
Currently, Nigeria is growing huge potential thanks to the Act. As an industrial hub, many local players now exist in the space and are potentially reaching out to other markets around because of their capacity. The market gets more domesticated and reliance on foreign expertise reduces. This translates to more domestication of the wealth coming out of the industry. I will say the industry is currently around 10% – 15% core local content, with the ability to grow even more in the short term.
Strategies behind BRADE’s operational success
We concentrate on what we do best by focusing on our core competence areas. As Project Managers, we have overtime, analyzed the numerous business opportunities in the value chain, with greater interests in those that relate to our core competences, in oil and gas wells drilling and completion, industrial and production chemicals, heavy duty equipment and EPCI.
BRADE’s contribution to local content development
We are big on executing projects with the best expertise which involves a lot of training and improving the skills set of “local content”. In BRADE, we adapt, introduce, and localize “new technologies”. A good example is the MaxTube GRE (glass-reinforced epoxy) technology for lining of Tubulars. It introduces a non-reactive surface to hydrocarbon fluids flowing through the tubing, hence eliminating the problems associated with corrosion, and reducing the dependence on high alloy steels for most water and gas wells.
We are partners with NOV for the SEABOX-SWIT, a revolutionary reservoir management technology for both improved and enhanced oil recovery. We have sensitized the entire industry of its benefits, and are confident that with time, more companies will adopt this technology.
Challenges and the way forward
A lot of us will jump at “access to capital” as the major needs of most local companies. That said, we have to step back a bit – go back to the fundamentals of doing business properly. That is the biggest problem in the industry.
Pipeline vandalization is another major challenge in the Oil & Gas industry. This disrupts crude oil supply to export terminals via pipeline and contributes to large volume of losses recorded in the industry. The Government needs to improve our pipeline surveillance architecture and introduce technology to curtail the frequency of this challenge. Enactment and enforcement of punitive laws against pipeline vandals will also reduce the frequency of pipeline vandalization.
BRADE’s position in managing future opportunities in the industry
BRADE has evolved, from a company (BRADE Consulting Limited) to a formidable group with six subsidiaries, strategic global partnerships, and in-house capabilities to undertake Oilfield projects from a single defined technical study to the delivery of Turnkey projects.
Our core services includes Well Construction (Drilling & Completions), Well Delivery Services, Project Management (including Technical Manpower Supply), Integrated Field Development and Rehabilitation, Heavy Duty Equipment Supply (OCTG, Wellheads and X-mas trees), Subsea Equipment Services and Provision of Supply Vessels.
For large projects, we can set up an integrated team of professionals which typically includes engineers and geoscientists skilled in reservoir description (petroleum geology and petrophysics), reservoir engineering, production engineering, well engineering, facility engineering, and petroleum economics.
Why Calaya Engineering prioritized local capacity development since inception, by Osuagwu
Calaya Engineering Services is one the leading oil and gas service providers in Nigeria with a robust track record of excellence in service delivery, while prioritizing in-country capacity at the core of its operations. In achieving this, the company has over the years developed strategic partnership with OEMs to deploy cutting-edge technologies in executing projects which has resulted in cost minimization, time efficiency, and long term preservation of assets and increased revenue for its valued clients.
According to the Managing Director/CEO, Engr. Tony Osuagwu, the company has always focused on alleviating the plight of technically sound Nigerians by partaking in various engineering projects in the oil and gas industry within scheduled time without compromising required standards either nationally or internationally.
He explained that “Before the NCD Act came into existence, we have always had a vision to develop local capacity because at that time, not only were the IOCs giving preference to their nationals, most graduates hardly get recruited due to stringent requirements. Given my background in engineering, we recruited NYSC members who were trained in different aspects of the industry and I am happy that a lot of them who started with us are having excellent careers in the industry. Presently, we have over 260 employees, of which 90% started their career at Calaya. We have always been a local content company from inception.”
Speaking further, Osuagwu applauded the initiators of the Act and the management of the NCDMB for supporting indigenous firms to acquire skills which were hitherto exclusive to foreign firms. He said, “The Local Content Act is a blessing to the Nigerian oil and gas industry, because it has enabled local firms to acquire skills and exhibit high capacity. It was a tight situation for indigenous players before the Act because IOCs dominated the industry and favoured their own. Local capacity wasn’t strong and it made local firms look inferior, but thankfully, the Act has increased local capacity to about 65% and our economy has benefited largely from it.”
With footprints in Oman, Equatorial Guinea, Congo, Malaysia, Angola and Spain, Osuagwu maintained that the Act has played a big role in the growth of Calaya Engineering which propelled its expansion outside Nigeria. “When we started operating in Equatorial Guinea, some of the IOCs we met were surprised that a Nigerian company could compete with them. By executing projects to required standards, it gave us a strong edge which earned us referrals to other places like Congo, Angola, Ivory Coast and Senegal. The exposure we got from the local content initiative made all of these a reality”, he added.
Emphasizing on the need to support indigenous firms with more funds to enable them become bigger in capacity like the IOCs, Osuagwu urged the federal government to do more for the industry in terms of funding and putting in place policies that would foster innovation.
In his words, “Local firms need funds to grow because the technical activities carried out in the industry require that you have the right technologies and efficient manpower. Though the Nigeria Content Development Fund (NCDF) was established to help in this regard, but it is not enough. China and India invest a lot in their local firms and when they work elsewhere, the wealth is returned to these countries. If the Nigerian government can do the same, it will be highly beneficial to our economy.”
NiGSA ENERGY SERVICES: Expertly Delivering Innovative, Efficient, Value-Driven Solutions for Nigeria’s Energy Sector
NiGSA Energy Services Limited is a leading player in Nigeria’s oil and gas, petrochemical and energy sectors. With a vision to become a supplier of specialized products and services through an innovative and customer-centric approach beyond the shores of Nigeria, the company has made impact in contributing to the local content initiative having trained over 200 Nigerians in different areas of the oil sector and timely delivery of projects which cuts across engineering and consultancy, rope access management, asset integrity management, safe lifting operations, corrosion monitoring and cathodic protection survey as well as conventional and advanced Non-Destructive Testing (NDT) inspection services through the deployment of indigenous manpower. Vincent Molokwu, Managing Director/CEO of NiGSA Energy Services speaks on the impact of the local content act and challenges faced in the industry in this interview.
To what extent has the NOGICD Act benefitted the Nigerian economy?
The Local Content Act of 2010 was enacted to promote indigenous participation in Nigeria’s oil and gas industry for the purpose of improving the economic and social wellbeing of those operating in the oil and gas industry. This implies that Nigerian operators and Nigerian service companies, suppliers and manufacturers are considered first in the award of contracts, licenses and projects in the oil and gas sector before their foreign counterparts. This has generally increased opportunities and paved ways for the growth of participating indigenous companies. The Act has also created employment for thousands of young Nigerians who have acquired skills in different aspects of the industry.
What is the strategy behind the operational success of NiGSA Energy Services?
NiGSA Energy Services Limited aims at being a known brand in asset integrity management in the oil and gas industry. We have strategically designed processes to maintain and facilitate sustainable organic growth through development of human capital, deployment of unique technologies through strategic partnerships with OEMs and transfer of skills to Nigerians which has strategically positioned us to achieving more with local capabilities.
Our highly esteemed clients are the driving focus of our business and to ensure their continuous satisfaction, we are fully registered by institutions like DPR, NCDMB, NiPeX, and adhere to all regulations and stipulated guidelines, we are also accredited by international bodies such as ABS, BV, IRATA, ASNT and stick to the international standard encouraged by these organizations.
To what extent has NiGSA Energy Services contributed to the local content initiative?
As a provider of innovative solutions, we focus on using the best technologies to carry out inspections, maintenance and turn-around services without compromising on safety and quality. This has been done initially by partnering with foreign companies and using expatriates to carry out these services, however, importing foreign skills has its own challenges. A major example is the outbreak of Covid-19 in 2020 followed by travel restrictions which would have made it difficult for us to deliver on projects. However, we were able to bridge this gap, as we have actively participated in developing local capacity by training over 200 personnel in the last five years. The trainings were focused on conventional and advanced NDT inspections, Rope Access technique, Artificial Intelligence, Data management, advanced reporting and analysis as well as project management amongst others.
What are the challenges faced in the industry and how do you think these challenges can be addressed?
The oil and gas sector comes with a lot of stringent standards and constantly changing policies some of which includes the requirements for statutory document like the DPR permit, OSP, NSITF compliance certificate, and tax law among others. Also, the security challenges in the country demands that extra measures are put in place to safeguard workers in high-risk zones. We are convinced that this situation will change should the government intervene with more stringent laws and measures in tackling the issue of insecurity, not just in the oil sector but in the country as a whole.
Why there is need to drive competence in the Oil and Gas Industry, by Okon,
Engineering Automation Technology Limited (EATECH) is one of the leading oil and gas companies that has continued to be at the forefront of local content development in Nigeria. Through its exceptional workforce which is made up of Nigerians, the company has continued to demonstrate commitment to customer satisfaction, periodic review, innovative technology and application of appropriate standard, while meeting statutory and regulatory requirements.
With operations spanning across, Asset Integrity, Engineering and Construction, as well as Electrical, Instrumentation and Controls, EATECH is well positioned to undertake major contracts in the industry being a Company certified to ISO 9001:2015 and accredited to ISO/IEC 17025 and in the process of being certified to OHSAS 18001: 2007.
In this interview with Dr. Emmanuel Okon, the Managing Director and CEO of the company, spoke on the essence of the Nigerian Content Act and how EATECH is making impact in the Nigerian Oil and Gas Industry.
Benefits of Local Content Act 12 Years After
The actual objective of the Act is the best that could happen to the Nigerian oil and gas industry. Unfortunately, people tend to dwell on things that are not working, but I can tell you that one of the things working in Nigeria is the Nigerian Content Act. The ability of the industry to run successfully during the COVID-19 period is a proof that the Act is a right initiative in the right direction.
Since the Act came into existence, indigenous firms have been challenged to develop technology. So far, we have trained over 50 employees for competency training abroad which we might not have embarked upon without the Act, but we made the investment because we know that the industry has come to stay with us. We still investing on various investments, signing foreign partnerships and collaboration with foreign firm
We are one of the members of the Project 100 Company an initiative championed by the Nigerian Content Development and Monitoring Board (NCDMB), we received the application without knowing anyone and we did talk to anybody or call anyone when we submitted the application and we received the nomination letter as a beneficiary of the initiative as a Project100 Company of the Board.
We acknowledge the Board for such a transparent selection process. I can quote the Executive Secretary, Engr. Simbi Wabote on the Inauguration ceremony saying that he did not nominate any company, that selection was through a transparent selection process by KPMG and I believe him because we submitted our application without lobbying. Through the initiative, the NCDMB has invested so much in training the CEOs of those 100 companies in areas such as, corporate governance, leadership, management, project management, operations and financing. They also carry out system audit to review gaps for improvement.
Most of the improvement we have in our system is as a result of the training we received through the NCDMB and same can be said about a number of companies in the industry. If they realize 40 successful company, the industry will be on its feet and with the drive I have seen in the ES, they will achieve more because the Board is one of the agencies in Nigeria I have seen that is aggressive in delivering their mandate. They keep engaging to us and they have been consistent. They opted to take me to Angola in May 2022, but I was engaged. They took me to Aberdeen twice for capacity building. Most prospect and improvement in our system is because of their training, they have invested so well in Nigerian companies and we are a beneficiary. Companies like ours are investing more in Nigeria because of the work the Nigerian Content Monitoring Board is doing.
Growth strategies adopted by EATECH
We started as subcontractors and I have to give kudos to SAIPEM for helping us grow. They saw our commitment and introduced us to quality management system, they also appointed their quality manager to assist us in setting up our quality management system. That expanded our scope to see the benefits of structure, corporate culture, execution excellence and strategy in line with global standards.
Another company that helped us is ExxonMobil, they saw that we are competent based on the projects we executed for SAIPEM and they developed trust in us as a result of our performance and we are committed to corporate success. What we built with SAIPEM helped us grow from a sub-contractor to a Major contractor. Our exposure to ISO 9001 actually made us realise that one of the major threats of a growing organization is allowing multiple opportunities to swallow you. We discovered that if we have so much contracts without structure and competence, if we mess up one projects, all other projects would be affected. By that knowledge, we were able to improve our approach by reviewing capacity to take up opportunities. We did not spread our tentacles to all IOCs at once, we grew capacity and then extended to ExxonMobil, then Shell, NAOC and Total, while maintaining relationship with Saipem. We review our capacity before we expand to another company.
Over the years, our emphasis has been on a building corporate brand, corporate reputation, corporate culture, and execution excellence. So, when you meet any of our clients, the story remains consistent and we have been able to accelerate growth to where we are today.
Contributions of EATECH to Local Content Development
Going by our activities and manpower strength in the industry, we are 100 percent local content compliant. In our 14 years of existence. You cannot separate us from local content as we are local content, we believe in the act I am an ardent of local content as well as the company we have employed Nigerians, used Nigerian resources, invested in Nigeria and trained Nigerians. We have transferred a lot of technology down to Nigeria and we equally operate authorised service centres for OEMs. We have been able to achieve this by sending Nigerians abroad for trainings to follow the manufacturing process and assembly process with the OEMs. Our laboratory can handle various equipment calibration up to Aviation instrument. Apart from the cost savings in sending equipment abroad for maintenance, the time variance to send the equipment abroad for maintenance is no longer there. We have contributed to the Local content growth as much as the board
Challenges faced in the industry and the way forward
The major challenge in the industry still boils down to awareness. For instance, many indigenous firms are not fully abreast of the mandate of the NCDMB, as such, when they have issues, they don’t know how to direct it to the board. I have written to the board a couple of times and they have responded without me talking to anybody. I have no personal relationship with the executive secretary, but my experience with the board shows that they are ever ready to assist indigenous firms.
Secondly, a number of companies are not committed to corporate governance and the industry is meant to be sustained in conformance to corporate governance and best practises, because corporate governance creates value.
There is also the issue of competence which is lagging. There are huge opportunities in the industry but the competence to match up is a major challenge. It becomes difficult in a country where people do not see training and development as a key driver of the economy. The NCDMB has made efforts, but it is beyond them alone. There is need for collaborative effort from the state and federal governments, other regulators in the industry and educational institutions. Else, we will be faced with capacity challenge sooner.
On backward integration
I would say the NCDMB is even exceeding its mandate going by what they have achieved. I don’t have a personal relationship with Engr. Simbi Wabote, but the board has been exceptional.
Relationship with host communities
As a corporate entity, we believe in empowering our host communities by engaging them through skill acquisition and infrastructural development. It makes no sense paying money to some people while doing nothing, it encourages laziness and contributes in no way to their economic wellbeing, but when we train the youths, which we have always done, the skill becomes a part of them for life and it will position them to secure employment.
We also invest in schools through the provision of laboratory equipment, books, and renovation of classrooms. By so doing, we are adding value not just to those communities, but the society at large.
Positioning for optimization in the industry
We are an organization that operates in line with global best practice, so we don’t want to lay another foundation to key into the Petroleum Industry Act. We are well positioned to take up opportunities by nature of our foundation, systems certification, accreditation, standardization, structure, infrastructural development and capacity building.
Expansion for us is being able to address issues in the country, take up opportunities and grow capacity. We evaluate opportunities based on feasibility, viability, risk, enterprise review, cost and benefits. We don’t make decisions because others are doing so, we check if it meets our business objectives and goals. We are looking at a situation whereby other countries in Africa would come to our facility to get value. This would not only yield revenue for us, but for the country as well. That is our goal.