Nigerian oil industry spends $20.4bn on local fabrication, engineering

• NCDMB raises Nigerian Content to 42%

The Nigerian Oil and Gas Industry spent approximately $20.4billion between 2016 and 2020, particularly in key areas such as Engineering, Procurement, Fabrication, Project Management, and Services.

Executive Secretary, Nigerian Content Development and Monitoring Board (NCDMB), Engr. Simbi Kesiye Wabote revealed this at the opening of the 10th Practical Nigerian Content Conference held at the Nigerian Content Tower in Yenagoa, Bayelsa State  from 29thNovember -2nd December, with the theme“Driving Nigerian Content in the New Dawn of the Petroleum Industry Act (PAI)”.

He hinted that the aggregate industry spend was captured from the projects covered by the Board’s Monitoring and Evaluation Directorate.

The computation was part of a Checkpoint Review of the implementation of the Nigerian Content 10-Years Strategic Roadmap, to analyse the journey to 70 percent Nigerian Content and determine the level of the various initiativesintroduced by the Board.

According to him, the top industry spendare $8.07bn on Fabrication representing 39 percent of spend; $4.74bn on Engineering services representing 23 percent of spend, and $5.67bn on Procurement of manufactured materials, representing 28 percent of spend.

He listed the low spend areas to include $1.18bn on Services representing 6 percent of spend and $746m on project management representing 4 percent of spend, adding that the aggregated level of Nigerian Content across the five categories is 42 percent.

Noting the Nigerian Content performance in Engineering is above the 70 percent target, Wabote said areas for focus included fabrication and procurement of materials if the industry is to realise the 70 percent target by 2027.

He said: “That is why we are keen to ensure that the established in-country fabrication yards are utilized for sanctioned projects such as NLNG Train-7 as well as drive local manufacturing of goods such as chemicals, hardwares, spares, accessories, and other consumables via our commercial venture partnerships and our oil and gas industrial parks.Overall, we believe we are on track towards the 70 percent Nigerian Content target but we will need the support of all industry stakeholders to make it happen.”

Giving insight into the Board’s focus for 2022, the Executive Secretary said the Oil and Gas parks in Cross River and Bayelsa states would be commissioned in the 4th quarter of 2022. He emphasised that the provision of reliable power generation and distribution was one of the key requirements to commence operations at the park.To guarantee this, the Board signed an arrangement at the 2nd day of the PNC with the Gas Aggregation Company of Nigeria (GACN) and INFINI Power Limited for provision of reliable power to the two industrial parks.

He listed other plans of the Board for 2022 to include the completion of the engineering design of Brass Island Shipyard and commencement of roadshows to secure investment partners. Other scheduled programmes include thecommissioning the 2,000 barrelsper day Atlantic Modular Refinery in Brass and commissioning the 400,000 per year Rungas LPG composite cylinder manufacturing plant in Polaku, Bayelsa State.

He said the Board also plans to commissionthe 48,000 litres per day Base Oil production plant located in Omagwa Rivers State and commission the 30MMscf Nedo gas processing plant and the 300MMscfd gas hub tied to the OB-3 pipeline in Kwale, Delta State as well as progressthe Human Capacity Development interventions in institutions of learning, vocational centers, ICT centers in secondary schools and others.

Speaking further, the Executive Secretary announced that the Board has acquired land for the construction of 200-room NCDMB Conference Hostel accommodation in Yenagoa for delegates and guests to the various conferences hosted by the Board. He noted that the calendar of conferences hosted by NCDMB is getting busy with events,especially with the opening of the Bayelsa State Airport. He said: “it is only logical that we put in place a decent Conference Hostel to further enrich the experience of our conference participants.”

On the area of funding, Wabote stated that the Nigerian Content Intervention Fund has been expanded the from $200million to $400million, with $350 million from NCDMB and $50million from NEXIM Bank. “Additional products for working capital and loans for Women in oil and gas were also introduced. NEXIM Bank has completed processing of the loan approval for thefirst set of beneficiaries of the funds under their management.”

He also announced that the Board intends to implement modalities to extend the Nigerian Content Intervention Fund to the manufacturing sector in year 2022.

In furtherance of the Board’s intent of commercializingResearch findings,the Executive Secretary confirmed the approval of the partnership with Amal Technologies for the setting up a state-of-the-art factory to produce hardware, embedded systems, and other technological devices in Nigeria, the first fully commercially printed circuit board manufacturer in Sub-Saharan Africa.

He later signed the shareholders agreements on behalf of the Board with the Managing Director of Amal Technologies for the unique partnership in Research and Development.

He explained that the “plant will produce Smart Gas/Smoke Detector Alarm devices that monitors and detects smoke and all types of gas leakages (especially LPG), calls the user’s mobile phone if the intensity of the gas is getting high and automatically shut off the valve of the gas cylinder using Internet of Things and Artificial Intelligence technology.The facility, also has the capacity to produce more than two million Advanced Smart Electric Meters in Nigeria, to support the Federal Government’s initiatives towards the national mass metering program thus bridging the gap in local production of electric meters,” he added.

In his address, the Honourable Minister of State for Petroleum Resources, Chief Timipre Sylva noted that the signing of the Petroluem Industry Act would enable rapid development of projects in the Nigerian oil and gas industry. He stressed that new projects were needed in the industry to increase the nation’s production volume, grow national revenues, engage the local supply chain, create more employment for Nigerians and promote national security.

He also hinted that the recent conclusion of bid rounds for marginal fields was part of Federal Government’s determination to reinvigorate the Local Content in the production side of the business and open a basket of opportunities for local capacities across the industry value chain.

The Minister who was represented by the Director Human Resources, Dr. Famous Eseduwo charged NCDMB to continueontheir upward trajectory, focused on the implementation of the Nigerian Content 10-Year Strategic Roadmap to grow Nigerian Content to the targeted level of 70% by 2027.