Investors declare Nigerian Content Policy successful

• NNPC Limited to domesticate 80% of transactions

Sopuruchi Onwuka

Players across the streams in the Nigerian petroleum industry have declared the local content policy in the country very successful despite visible disputes that have clogged its smooth implementation in the past 11 years.

The endorsement came as the industry took stock of the gains and challenges in the implementation of the Nigerian Oil and Gas Industry Content Development (NOGID) Act of 2010 ahead of the amendment of the law to cover the full sectors of the economy.

The Oracle Today reports that the Nigerian Content policy otherwise known as the local content policy is legitimized by the NOGICD Act and enforced by the Nigerian Content Development and Monitoring Board (NCDMB) to domicile execution of petroleum industry jobs in the country and also prioritize use of local goods and service in the operations of the industry.

The aim is to use the huge petroleum industry annual budget to stimulate growth in domestic productivity by creating jobs, patronizing local products, boosting cash flow in the domestic economy and stimulating local industrial development.

Executive Secretary of the NCDMB, Engr Simbi Wabote, had declared a 10 year strategic plan to boost local content of the oil and gas industry from less than 10 percent in 2018 to about 70 percent by 2030. He said the plans which include massive development of infrastructure and other factors of production would leverage estimated annual $20 billion budget of the upstream petroleum industry to build enduring local production capacity.

In the just concluded 2021 Practical Nigerian Content (PNC) hosted by the NCDMB in Yenegoa, Bayelsa State, the industry took stock of policy performance and also ex-rayed the challenges that could be addressed in the ongoing amendment of the NOGICD Act. Players agree that the NCDMB has developed a commendable implementation process, delivered visible and palpable results, and evolved credible template for local content policy for African producers.

Country Chair of Shell Companies in Nigeria, Mr Osagie Okunbor, who is also the Managing Director of Shell Petroleum Development Company (SPDC) Nigeria Limited, declared that policy implementation templates developed and operated by the NCDMB could form a model that could be replicated across the globe.

Mr Okunbor who delivered industry address at the conference said NOGICD Act recorded commendable successes in the past 11 years of providing legal platform for enforcement of the Nigerian local content policy; adding that the NCDMB has exceeded expectations in the prime goals of developing industry job delivery facilities, boosting jobs and retaining capital in the local economic environment.

He pointed at the building of integration facilities for floating production, storage and offloading (FPSO) operated by the Hyundai Heavy Industries (HHI) in Lagos State, saying the integration yard could form the hub for integration of future deepwater field development facilities in Africa.

He pointed out that peer international oil companies including ExxonMobil, Chevron, Total, Eni have taken different initiatives in creating significant economic values for Nigeria under the NOGICD Act, saying that independent companies and indigenous players have also gained solid grounds in the industry through the opportunities provided by the law.

He commended the NCDMB on the initiative of opening various low cost and flexible funding windows for indigenous upstarts struggling with budget at a time global lenders are shutting the door on fossil fuel projects. He said the Nigerian Content Intervention (NCI) Fund, which is one of the several widows, has also reduced overall cost for indigenous service firms.

“Nigerian manufacturers are also making giant strides in production of quality goods and services for the industry,” he said, adding that NCDMB has drilled down the positive impact of the NOGICD Act across the sections of the industry.

In his industry leadership remarks, the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mallam Mele Kyari, testified that the petroleum sector has witnessed growth in local capacity across the full chain.

He pointed that the rapidly grown capacity became handy and enable the local industry operations remain uninterrupted during the 2020 global pandemic lockdown and severance of international supply and logistics chain. He noted that the Nigerian petroleum operations would have grounded if it still relied on foreign goods and services.

He further challenged the NCDMB to channel new energy in development of additional capacity for new forms of energy as the world begins to shift demands from fossil fuels to greener and renewable energy options.  He called for rapid development of local capacity for low carbon energy production and services operations.

Mallam Kyari declared that the new NNPC Limited would rely on the NCDMB to local capacity development and innovative services as the national oil firm launches into full commercial operations with administrative and financial autonomy.

He said NNPC Limited would reply on the assistance of NCDMB to domesticate over 80 percent of its transactions in-country.