Local content in oil sector retains N3.3 trillion

• Set to attract N200b investments in two years
• Fuel queues may worsen as marketers run out of stock
• NNPC links outage to vandalism

BETWEEN 2015 and 2016, Nigeria’s oil and gas sector will rake in $10 billion (about N200 billion) worth of investments through the Local Content Development Policy.

So far, about $191 billion (N3.8 trillion) investment has been retained in-country and hundreds of thousands of jobs in manufacturing, engineering, sciences and technical services could be created.

The Executive Secretary of Nigerian Content Development and Monitory Board (NCDMB), Ernest Nwapa, who disclosed yesterday, at the Nigerian Investment Forum in Houston, Texas, United States also said that over $5 billion worth of investments has been made in Nigeria since the signing of the Nigerian Content Bill into law by President Goodluck Ebele Jonathan in 2010.

The forum was organised by NCDMB in collaboration with SweetcrudeReports and Guardian Newspapers Limited,

Nwapa, who was, however, removed as NCDMB Executive Secretary by the President same yesterday, hinted that over $1billion has been invested in the Nigerian oil and gas industry to create capacity and execute Nigerian Content scopes provided on the Egina Deep Water Project.

Meanwhile, there are fresh indications that the already-long queues at petrol stations across the country may get even longer as oil marketers are running out of the product.

A source told The Guardian at the conference that their available stock might not exceed two weeks and that they will not import products until government offsets the outstanding N285 billion it owes them.

This is coming as the Nigerian National Petroleum Corporation (NNPC) has blamed power cuts in recent weeks on unrelenting vandalism of its pipelines.

While accusing government officials of being economical with the truth about the precarious financial situation confronting the present administration, the source said such office holders were busy disputing the amount owed marketers.

Nwapa told participants at the forum that the acquisition of key oil and gas assets and establishment of critical facilities by local and foreign investors will help guarantee the continued implementation of the Nigerian Content Act.

He stated that Nigerian investors and their partners had demonstrated their resolve for the policy to continue by building immense capacity over the past five years, acquiring hi-tech industry equipment and creating employment opportunities for thousands of young Nigerians in their assets and facilities.

Nwapa explained that “policy statements issued by the in-coming government had indicated that it will continue to support indigenous participation and Nigerian Content. It is very important that the international community gets that message clearly and that Nigerians who are investing, continue to do so believing that government is a continuum and will always support them by continuing with good policies they have initiated.”

Speaking also at the event, the chairman of the occasion and Chairman Africa, Schlumberger, Sola Oyinlola, said Nigeria has become a force to reckon with on the petroleum industry through the support of the Nigerian Content Act.

According to him, the success of the national content agenda, with its ability to create massive multiplier effects in other sectors of the economy that need to diversify away from oil and gas, has influenced thought to expand the initiative into other sectors such as power and telecommunication.

Despite the success recorded so far with the scheme, Oyinlola, however, identified the lack of in-country financial capacity to undertake big ticket transactions and inadequate infrastructure, including the deplorable state of supporting industries, for prototyping or manufacturing or assembling any locally engineered solutions, as major challenges facing the local content policy and the limited access to technology that hinders the possibility of innovation and domestic technological creativity.

For the policy to achieve its full potentials, he stated: “The critical missing link between strategy and action must be addressed to avoid the persistent incapacitation that public policy initiatives and actions many government programmes and projects have suffered.

“The board must actively collaborate with development partners including the International Oil Companies (IOCs) and multilateral agencies, to implement identified solutions to the myriad problems catalogued above.

For instance, I would be curious to know how the tax payer funded Nigeria Content Development Fund, which could help solve the financial capacity constraint, is going to enable small scale enterprises to finance their joint initiatives.

“The incoming administration has its work cut out for it and the industry awaits with bated breath any new policy directions, but we are all optimistic that challenges would be tackled expeditiously to provide a new dynamic investment destination.”

Speaking on the reasons for the investment forum, the Editor-in-Chief of SweetcrudeReports, Hector Igbikiowubo, stated that the organisers, the NCDMB, Guardian Newspapers Limited and SweetcrudeReports, were driven by a common objective to establish a platform for interface between oil and gas, small and medium enterprises operating in Nigeria/West Africa and original equipment manufacturers in the United States, Europe, Asia and the Middle East.

He stated: “For too long, businesses operating out of Sub-Saharan Africa attend the Offshore Technology Conference (OTC) in the hope of striking a partnership or collaboration of some sort, but come up short owing to, in some cases, an inability to communicate their intentions in a coherent manner which takes into cognizance the peculiar operating needs – norms cum business culture of foreign climes.

“Similarly, foreign entities seeking to operate in sub-Saharan Africa in some cases also fail to take into cognizance the peculiar business culture and operating needs of host countries.”

He noted therefore, that the forum seeks to facilitate collaboration and partnerships between stakeholders seeking to expand their horizon, while providing advisory services that promote the integrity and fidelity of claims made by the parties involved.

On the dispute between government and the source added: “It is very unfortunate that government officials are denying how much marketers are owed. For the record, government is owing marketers N285 billion and not N200 billion the Minister of Finance is claiming.

I can confirm that we are dispensing what we have in reserve, which can last for about two to three weeks. If we don’t import now, the nation will be grounded in three weeks time and this is because our members no longer have the resources to import.”

Also speaking at the conference, the NNPC Group Executive Director (GED), Power, Dr David Ige, stated that the conduct of the 2015 general elections prevented the Joint Task Force (JTF) in the Niger Delta from providing security cover for the technical group tasked with the resuscitation of the vandalised pipelines.

Similar stories
36 ships laden with foods, petroleum products to arrive Lagos
8 ships arrive Lagos ports with petroleum products
New dawn for indigenous operators in Nigeria’s petroleum industry