Why it’s difficult to enforce local content laws — Board Secretary
If the Nigerian Content Development Monitoring Board applies all the laws in the Nigerian Oil & Gas Industry Content Development Act, oil production will stop and the petroleum industry will be killed, Executive Secretary of the Board, Simbi Wabote, told journalists in an interview in Abuja. Business & Economy Editor, Bassey Udo, was there.PT: The Nigerian Oil & Gas Industry Content Development Act was enacted to promote increased Nigerian participation in the petroleum industry.
The roadmap has four enablers, namely funding, regulatory environment, collaboration and stakeholders’ engagement and research and development. Again, in the Egina Floating Production Storage Offloading facility that came into production late last year, Nigerian companies fabricated in-country six out of the 18 modules as well as integrated the world largest FPSO in Nigeria. That in itself is a huge achievement for our oil and gas industry.
Today, Seplat is doing about 75,000 barrels per day. Same thing with AITEO, a wholly-owned Nigerian exploration and production company. Nigeria has continued to provide leadership and guidance to other African nations that want to understudy Nigerian Content implementation. PT: The NOGICD Act mandates oil and gas companies to remit one per cent of the value of contracts awarded in the upstream sector of the industry to the Nigerian Content Development Fund. So far, what’s the update on those remittances?
We have concluded plans to hand over such companies to the Economic and Financial Crimes Commission for prosecution.WABOTE: We are on the process to recover the money. We are not there yet to be able to determine who those companies are and how much they are owing us. The NCDMB has five product lines within the $200 million revolving fund. One of them is project financing. The other ones are contract financing, manufacturing, loan refinancing and community contractors refinancing.
WABOTE: In terms of expatriate quota, I can tell you with certainty that it has gone down drastically. We have data on what it used to be and what it is today. But, it is important to clarify that Nigerian content is not about ‘Nigerianisation’. So many people make that mistake to say they visited a company and saw experts. That’s not the intent of the Nigerian content policy.
Another example is Bonny NLNG. Almost about 90 per cent of the staff in Bonny NLNG today are Nigerians, including the managing director, also of SPDC. PT: Why is the Board reluctant to wield the big stick against local contractors who refuse to comply with the provisions of local content law? So, we have to use the carrot and stick method to build up that capacity. If one reads the Act itself, it says all fabrications must happen in-country. It also says all steel products must be purchased in-country. If the NCDMB insists that all fabrications and steel products be done in-country, would we have any project? The answer is no.
PT: The NCDMB’s primary mandate is to promote local content in the petroleum industry. But, it appears the Board sometimes gets involved in refineries and other downstream industry activities. Why? That is an area we have recorded a major achievement. For instance, under the Technical Capability pillar, the Board has provided equity investments to catalyse the establishment of 5,000 barrels per day modular refinery by Waltersmith Refining & Petrochemical Company Limited in Ibigwe, Imo State.
Both modular refineries have huge prospects for jobs creation, value retention, petroleum products availability and the development of in-country capability. They fit perfectly with NCDMB’s vision to serve as a catalyst for the development of Nigeria’s oil and gas sector.
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