FG lays frameworks for innovation in petroleum industry

Sopuruchi Onwuka

With the global movement for energy transition driving massive divestment of brownfield and medium value assets by multinational oil firms in Nigeria, government have started laying strong foundation for local technical capacity development to position indigenous companies to cope with emerging industry challenges.

The Executive Secretary of the Nigerian Content Development and Monitoring Board (NCDMB), Engr. Simbi Wabote, whose agency drives capacity development in the Nigerian energy sector, declared Nigeria must develop disruptive innovation to fit into “fourth industrial revolution with cloud computing, Internet of Things, Robotics, Big Data, Artificial Intelligent and many more being the hallmark of the current age.”

In pointing out urgent need for Nigeria to pursue local innovation, Engr Wabote pointed at direct relationship between investments in Research and Development (R&D) and economic prosperity. He made it clear that “it is time to start to nurture the growth of our home-grown technology rather just being a wholesome consumer of other people’s innovation.”

The Oracle Today reports that the NCDMB hosted its second research and development fair during which the Ministry of Petroleum Resources officially created the Nigerian Content Research and Development Fund; formally launched the NCDMB 10-year R&D Roadmap; and reconstituted the Nigerian Content Research and Development Council (NCRDC).

The Ministry also, at the fair, commissioned the NCDMB Technology Incubation and Innovation Center; and announced approval for the establishment of Oloibiri Museum and Research Center (OMRC).  

The Oracle Today reports that the country’s traditional foreign investors that operate the nation’s petroleum exploration and production agreements with government have all started cash recovery by divesting their assets in the country.

The companies, including Shell, Total, Eni, Chevron, ExxonMobil and others have launched consisted divestment programmes that transfer their petroleum assets to indigenous companies while recovering billion of dollars in cash earnings and profits.

It is projected that most of the foreign companies would have conceded their onshore operations to indigenous companies and small foreign independent companies seeking foothold in the country. The companies now focus on their deepwater assets where their discovered reserves are still huge and largely untapped.

Besides, most of the foreign majors have committed to net-zero emission targets as the global movement for environmental responsibility gather steam and shareholders demand them to pursue cleaner energy options. There is clear indication that foreign oil firms in Nigeria will either exit the country in the future or significantly diversify their business from petroleum energy.

The development has brought Nigeria to attention as capacity gaps among the indigenous producers pose threat to national energy security in the medium to long term.

Minister of State for Petroleum Resources, Chief Timipre Sylva, who performed the official ceremonies, declared that “Creating Sustainable Collaboration in Research and Development for the Energy Industry and its Linkage Sectors” captures the industry’s collective commitment to aggressively drive innovation and position for an integrated energy sector “where field development and production solutions are sourced through local capabilities.”

He said the Nigerian Oil and Gas Industry Content Development Act 2f 010 recognizes research as a key enabler for sustainable local content development, stressing the need for Nigeria to build a national technological capability to economic growth.

Chief Sylva made it clear that the country’s overdependence on foreign goods and services is a direct consequence of low local innovation and poor research funding. He challenged local service companies to embrace investment in R&D as a key component of their business model.

In calling for pan-industry collaboration in funding research, the minister announced the creation of the “Nigerian Content Research and Development Fund” with an initial seed capital of $50 million. He said the seed capital is a stimulus for the private sector to take the lead in investments in innovation.

“The funding of research is not the sole responsibility of National Governments, rather, big spenders on research and development globally come from the private sector,” he pointed out.

On the seed capital, Chief Sylva said the $50 million is designed for application in establishment of research centers of excellence; supporting research commercialization; supporting for basic and applied research; and endowment of professorial chair.

He said that the NCDMB has developed a 10-year R&D Roadmap after a painstaking forensic analysis of the research eco-system in Nigeria and the anticipation of the industry. The move, according to him is to set the agenda for its interventions on R&D.

In formally launching the NCDMB 10-year R&D Roadmap, the minister explained that the roadmap is anchored on eight success pillars of funding, infrastructure, capability, commercial framework, collaboration, governance, legal framework and enforcement.

“The 8 success pillars collectively implemented will no doubt position our industry on the path of sustainable assimilation of products of Research in oil and gas operations,” he noted.

He announced government’s approval for the reconstitution of the Nigerian Content Research and Development Council (NCRDC) which, according to him, would foster collaboration among the government, the industry and the academia developing a vibrant research and innovation ecosystem in the country.

Membership of the NCRDC is drawn from different industry groups and includes Dr. John Erinne, Mr. Ijuwe Albert, Mr. Rosario Osobase, Dr. Noel Biodun Saliu, Alhaji Aliyu Adamu, and Dr. Tandama Adamu Abu.

The council which has two year tenure is headed by the Executive Secretary NCDMB who is to provide secretariat support for it to proffer sound policies that will shape the direction of NCDMB’s research interventions.

Chief Sylva stated that the NCDMB Technology Incubation and Innovation Center would provide the platform for idea generation, incubation and acceleration of innovative ideas to the marketplace. He called on industry stakeholders and youths to take advantage of the center to foster adaptation of existing solutions and create new solutions that address major industry challenges.

On the the Oloibiri Museum and Research Center (OMRC), Chief Sylva said the facility would host a museum for historic developments, data, equipment, and tools used in the Nigerian oil and gas industry;  a functional Research Test Center to “close a major gap in our quest for homegrown technology.”

“I am confident that the combined impact of the fiscal, governance, and developmental provisions contained in the PIA and the major infrastructure and institutional support to R&D will lead us to a new energy industry that is resilient, adaptive to gas-based energy transition and a source of pride to all compatriots,” the minister declared.