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NCDMB saves Nigeria $5bn annually, moves to establish local content bank

The Nigerian Content Development and Monitoring Board (NCDMB), through its statutory activities involving six million training man hours, is now able to retain $5 billion in the Nigerian economy from the annual $20 billion oil and gas industry expenditure.

Simbi Kesiye Wabote, the executive secretary of NCDMB, who disclosed this Tuesday in Abuja at a public hearing conducted by the joint senate committee on petroleum upstream and gas, also noted that before now, the $5 billion ended up in foreign economies each year.

The intent of the public hearing was to determine the extent of compliance with the Nigerian Content Act and utilization of the Nigerian Content Development Fund (NCDF).

Another major target of the board, according to Wabote, is to establish the “Local Content Bank of Nigeria” to focus on the establishment of facilities for domiciliation of services with emphasis on optimal use of local resource input.

He stated that 36 percent of the marine vessels operating in the Nigerian oil and gas industry were now owned by indigenous players, a marked improvement from total foreign domination of the industry before the implementation of the Act.

Speaking further, Wabote cited the establishment of five world class fabrication yards as another evidence of Nigerian content implementation, adding that “today, Nigeria is able to handle 60,000 metric tonnes of fabrication in-country.”

He also mentioned the local production of barite, which is required for crude oil drilling operations, noting that NCDMB worked with the industry to support the establishment of a mechanized plant in Benue State for barite mining and benefication.

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According to Wabote, “the Nigerian oil and gas industry will between now and the year 2027, aspire to domesticate the full capacity and capability required for the integration of Floating Production, Storage and Offloading vessels (FPSOs).

The new target for the industry follows the successful in-country fabrication of six modules of the Total Egina FPSO and scheduled integration of the modules on the FPSO at the SHI-MCI yard in Lagos in September 2017 for the first time ever in Nigeria.

The FPSO is the biggest component of a deepwater oil and gas project, and the fabrication and integration of the modules at any location spurs multi-dimensional development and creates thousands of jobs.

On the NCDF, the Wabote explained that international oil companies comply reasonably in remitting one percent of the value of their contracts, but added that some service companies and indigenous operating firms default in their payment.

He regretted that the impact of local content in the oil and gas sector had not been sufficiently linked to other sectors of the economy, and canvassed for the support of key government agencies in deepening local content in the country.

In his remarks, Bukola Saraki, the senate president, represented by, Ahmed Lawan, leader of the senate, explained that the national assembly was keen to ensure that oil and gas companies complied with the Nigerian Content Act, especially in the employment of competent Nigerians and utilization of local goods and services in their operations.

Bassey Albert Akpan, chairman senate committee on gas, asked the Board to submit a detailed report on the operations of the NCDF from inception, including information on beneficiaries, defaulting firms and amounts owed the government.

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He expressed disappointment that only three companies have benefitted from the NCDF since inception, stressing that “there is no need to warehouse the funds with CBN, while Nigerian companies are suffering from lack of capital. There is no way they can build capacity.”

In his submission, Bank-Anthony Okoroafor, the chairman of PETAN, asked the senate to support NCDMB to ensure that at least 20 indigenous companies accessed the NCDF yearly.

He also proposed a guideline that would ensure that “companies that bid as lead tenderers should have the capacity to carry out more than 80 percent of the required work scope, while companies that have not built capacity should bid as sub-contractors.”

 

Monday Ashibogwu

Monday Michaels Ashibogwu is Editor-In-Chief of QUICK NEWS AFRICA, one of Nigeria's leading online news service.

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