Local Content in oil, gas hits 30 per cent

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…Targets $14 billion in-country expenditure

By Samuel Ibiyemi

Seven years after the signing of the Nigerian Content Act into law by former President Goodluck Jonathan on April 22, 2010, the Federal Government has announced an increase of 27 per cent from 3 per cent to a new level of 30 per cent in-country expenditure on materials and services. To hold on the milestones recoded during the period, the Federal Government has unveiled a target of $14 billion in-country industry expenditure on materials and services.

Executive Secretary Nigerian Content Development and Monitoring Board (NCDMB) Mr Simbi Wabote disclosed at the first National Education Summit organised by the Oil Gas Trainers  Trainers Association of the Nigeria ( OGTAN)that $5 billion in-country expenditure on materials and services in the oil and gas industry represents 30 per cent of the annual industry expenditure of $20 billion. This milestone according to him was made possible as a result of the investment of the board on capacity in collaboration with the private sector led by the Petroleum Technology Development Association of Nigeria ( PETAN) and the International Oil Companies ( IOCs).

“ Capacity Building  in the oil and gas industry initiated by the NCDMB helped to boost domiciliation and in-country capacity of materials and services  from less than 5 per cent to the current level of 30 per cent,” he noted.

Wabote explained that before  the NOGIC Act was signed, less than 3 per cent of the oil& gas industry spend was carried out  within Nigeria. The IOCs according to him were executing almost all contracts outside Nigeria and brought only  the facilities back  into the country  for installation.

“The 5 per cent level of industry spend  recorded locally  by then was made possible because the oil resource lies in Nigeria, hence the  reliance of the government  solely on collection of royalties and taxes”, he said,

The NCDMB boss listed  Research and Development as one of the parameters of local content that boosted in-country capacity and the implementation of the Act.

Another parameter identified that contributed to the  implementation success was the Fiscal and Monetary incentives put in place  to keep the businesses afloat.

He disclosed that PETAN member-companies have been of great assistance in providing practical experience during internship  for those  trained  under the capacity building scheme since no company was willing to take them without experience. To solve the problem of unemployment by those trained under the capacity building scheme of the NCDMB, Wabote said that a review of the policy was carried out  which targeted job creation with the introduction of the 60/2020 approach contained in the 10 years development of the board.

President of OGTAN Dr Afe Mayowa in his welcome address listed initiatives of the training association. This includes commencement of the categorization of the member-companies in line with the international standards; issuance of  guidelines for standardization of training/establishment of National Occupation standard ( NOS) in conjunction with the NCDMB;fostering collaboration with regulatory bodies, academia and the oil and gas industry.

Also the Chairman of the Conference Dr ( Mrs) Obiageli Ezekwesili commended the activities of OGTAN for their initiatives directed at providing the right training needed for graduates of geosciences and engineering in meeting up with the needs of the oil and gas industry.

Vice Chancellor Ahmadu Bello University in his presentation on challenges of tertiary institutions in providing qualified graduates for the oil and gas industry identified poor remuneration lecturers and fees being paid as a major challenge.

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