By Fred Ojiegbe
The Nigeria Content Development and Monitoring Board, established in 2010 to rigorously pursue the development of local content in the oil and gas sector has so far revolutionize the oil and gas sector with primary focus on local content development.
Data obtained by Valuechain from the National Bureau of Statistics has shown that the contribution of crude petroleum and natural gas sector, which is a sub-sector under the mining and quarrying sector, to Nigeria’s Gross Domestic Product dropped from N13.45tn in 2018 to N10.2tn in 2020, representing a N3.25tn or 24.16 per cent decrease.
Nigeria being a mono economy, the oil and gas sector being a major contributor to the mining and quarrying sector has recorded little decline in the last 2 years.
Apparently, the Covid-19 pandemic came with it’s devastating effect which has affected global oil prices.
For instance, in 2018, the sector was the main contributor to the mining and quarrying sector with a share of 96.39 per cent, while contributing N13.45tn to the GDP.
In 2019, the growth experienced in 2018 shrank with its contribution to the GDP dropping by N1.05bn per cent to N12.40tn.
It, however, remained the major contributor to the mining and quarrying sector with a weight of 97.11 per cent in 2019.
The drop continued in 2020, while the sector remained the main contributor to the mining and quarrying sector with a weight of 93.95 per cent annual contribution.
In 2020, the contribution of the crude petroleum and natural gas sector further decreased by N2.2tn or 17.74 per cent.
To ensure that greater percentage of the oil proceeds are retrained in country, there by creating the much needed effect to the nation’s per capita income, the NCDMB has been in the forefront of local content development in the oil and gas sector which is predominantly full of foreign players that eventually repatriate profits to their home country.
Synergy with law enforcement agencies, others
As the saying goes, no man operates as an island, as such, the NCDMB has over time engaged different agencies especially the ones saddled with enforcement of law to grow Nigerian content.
Thus, the NCDMB, Economic and Financial Crimes Commission (EFCC), Independent Corrupt Practices Commission (ICPC), Nigeria Police, Nigerian Customs Service, resolved to vigorously pursue the enforcement of Nigerian Oil and Gas Industry Content Development (NOGICD) Act.
Recently, during a two-day workshop in Abuja tagged “understanding the objectives and philosophy of the Nigerian Oil and Gas Industry Content Development Act,” these agencies vowed to pursue strict compliance with the policy.
In his welcome address, the Executive Secretary of NCDMB, Simbi Wabote, explained that the Board organised the workshop to create synergy and collaboration with regulatory and enforcement agencies in the discharge of its mandate.
He explained that the workshops held regularly to strengthen collaboration with key stakeholders, particularly those that are not familiar with the Board’s roles in the petroleum industry.
A former Inspector-General of Police, Dr Solomon Arase, in his paper, identified gaps in the provisions of the NOGICD Act that would hamper the successful prosecution and conviction of companies deemed to have breached provisions.
He proposed some amendments to the Act such as the explicit definition of offences, expansion of the parties to offences, and stiffer punishment for noncompliance while urging the Board to build a small team of experts, with competences in investigation and identification of ingredients critical for proving cases of noncompliance.
He suggested that the team should include officers of the Nigeria Police, ICPC, EFCC and other relevant agencies, who would be trained on Nigerian Content.
The Agency’s Director, Legal Services, Umar Babangida, who presented the draft Nigerian Oil and Gas Industry Content Development Compliance and Enforcement Regulation 2020, said this is designed to plug some of the gaps that were identified in the NOGICD Act.
He also explained that non-compliance and breach of Nigerian Content guidelines have been categorized into minor and serious infractions.
Minor offences refer to first time defaults, deficits in meeting deadlines for periodic reports and similar defaults and applicable sanctions would include a letter of warning, the invitation of the management team of the operator/stakeholder for corrective dialogue with the Board.
On the other hand, serious infractions include repeated or persistent defaults; and/or deliberate refusal to comply with directives issued by the Board.
Similarly, the Nigerian Content Development and Monitoring Board (NCDMB), and the National Information Technology Development Agency (NITDA), in a bid to foster the development of local content, have agreed to set up a joint committee.
Both agencies are also collaborating to set up a six-man joint committee that will foster their collaboration in the development of local content in information and communications technology, oil and gas industry and related sectors.
The NCDMB boss listed areas of collaboration to include the direct engagement of youth and the promotion of in-country production of motherboards, electronic components, system integration and assembly.
He explained that other areas of the collaboration will include the mentoring of the beneficiaries of NCDMB through sponsored GSM repair training, development of mobile applications and personal computer applications as well as the optimization of the use of locally developed virtual meeting platforms.
On his own part the Director General, NITDA Inuwa Abdullahi described the planned inter-agency committee as an excellent idea.
He identified capacity building as another possible area for collaboration between NCDMB and NITDA, indicating that personnel from about 100 government agencies were undergoing training currently at NITDA’s e-government center in digital transformation.
Similarly, NCDMB has pledged to work with the Justice ministry to deepen the existing collaboration between the Agency and the Ministry, as well as to strengthen implementation of Nigerian Content drive.
Speaking at the Nigerian Content Stakeholders Workshop organised by the NCDMB for staff of the Ministry of Justice in Abuja recently, the Executive Secretary of NCDMB, Engr. Simbi Kesiye Wabote stated that the collaboration between the two organisations has yielded excellent results.
Such results include the Federal Ministry of Justice’s approval of fait for the prosecution of persistent defaulters of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act and the support for the establishment of Special Purpose Vehicles (SPVs) to enable the Board’s partnerships and commercial interventions.
He listed other benefits of the cooperation to include the Ministry’s review of the Draft Nigerian Content Ministerial Regulations and the Board’s sponsorship of capacity building workshops for judicial officers.
The Executive Secretary stated that the Board would not succeed in the implementation of its mandate if the Federal Ministry of Justice were not aligned with it. “If we don’t work with the Ministry to understand what we do, it will be difficult for them to support us,” he said.
He noted that the Board had organized similar workshops with the Nigerian Customs, Justices of the Supreme, Appeal and High Courts, with the intent of improving their understanding of the Nigerian Content Act, so as to get their cooperation.
He called for more assistance from the Ministry, especially in securing fait to prosecute recalcitrant defaulters of the NOGICD Act and establishment of new SPVs for the Board’s projects.
Wabote also sought the endorsement of the Ministry of Justice for the extension of the Local Content Act to other critical sectors of the economy, including Power, Construction, Rail and Information Communication Technology and the amendment of the NOGICD Act to enable NCDMB superintend over those sectors.
He advised against plans to enact a new law that would regulate Local Content in the Science and Technology sector and establish an independent agency to supervise it.
According to him, “once you establish another agency, there will be overlapping of functions, because science and technology activities overlap to the oil and gas industry. That way the atmosphere will become uncertain and scary to investors.”
”The Ministry of Justice will play an active role in this and will need to tell those who have such plans that it is better to have Local Content under one umbrella. There will be a lot of implications if there are separate laws on Local Content,” he added.
In his address at the event, the Solicitor General of the Federation, Mr. Dayo Apata commended NCDMB for organising the workshop, which is the second in the series. He noted that the engagements had enabled the Ministry and NCDMB to understand themselves better and foster a collaborative relationship in the enforcement of Local Content in the interest of the nation’s economy.
Apata explained that the Ministry of Justice is the legal advisor of the Federal Government and ”the workshops provide its personnel with an in-depth understanding of Local Content, the achievements of the NCDMB and a clear understanding of the roles of the Ministry of Justice in the enforcement of Local Content under the existing legal framework.”
Ongoing projects to be completed soon
The Board has affirmed that four major projects being developed by investors in partnership with the Nigerian Content Development and Monitoring Board (NCDMB) would be completed before the end of 2021, the Executive Secretary NCDMB, Engr. Simbi Kesiye Wabote has disclosed.
The projects include the Rungas facility in Polaku, Bayelsa State that would manufacture 400,000 units of Composite LPG Cylinders per annum and BUNORR production plant in Port Harcourt, Rivers State, which would produce 48,000 litres of base oil per day.
The other two projects include NEDO Gas’ 80 million standard cubic feet per day gas processing facility upgrade and expansion, plus 300 million standard cubic feet per day KGG manifold in Delta State, and DUPORT Midstream Ltd’s Energy Park, which comprises 2,500 barrels of crude oil per day modular refinery, 40 million standard cubic feet per day gas processing plant and 2 megawatts power plant.
The Executive Secretary spoke in Abuja at the one-day workshop on the “NCDMB Roadmap, A Catalyst for the Industrialization of Nigeria 2017-2027,” organised by the Reform Coordination and Service Improvement Department of the Ministry of Petroleum Resources.
He also said that five Liquified Petroleum Gas (LPG) storage/bottling plants and six LPG Depots being developed in partnership with Butane Energy Limited in 10 states in the North and Abuja would be completed in two phases – six in 1st quarter of 2022 and the rest in last quarter of 2022, with the opportunity to create 1,900 direct, indirect, and induced jobs.
Wabote also hinted that the Board was partnering with the Lagos Deep Offshore Logistics Base (LADOL) to develop a 24 megawatts power plant at Takwa Bay, Lagos State to provide uninterrupted power supply to the free zone which hosts key facilities required to service the oil and gas industry. The project is expected to generate 400 jobs.
According to him, the Board’s partnership investments cut across modular refineries, LPG value chain, and other areas. He stated that that the Board had 23 project sites spread across Abuja, Bayelsa, Bauchi, Delta, Edo, Gombe and Imo States. Other locations include, Jigawa, Kaduna, Katsina, Kano, Lagos, Nasarawa,Niger Plateau, Rivers, and Zamfara states.
The NCDMB boss explained that the Board committed equity investments into strategic projects that align with Government’s policies with a view to catalysing them to success and would exit once those businesses become successful. The investments were also in line with the Board’s vision “to be a catalyst for the industrialization of the Nigerian oil and gas industry and its linkage sectors,” he added.
On the US$350m Nigerian Content Intervention Fund, which provides affordable and accessible credit to qualified oil and gas companies, he described it as one of the most successful funding schemes in the country, hinting that the repayment rate by beneficiaries has been 99 percent.
In his comments, the Permanent Secretary, Ministry of Petroleum Resources, Dr. Nasir Sani Gwarzo lauded NCDMB for its achievements, adding that the Board was on the right trajectory in implementing its mandate and impacting linkage sectors. He charged the Executive Secretary to remain committed to the same trajectory of deepening Local Content implementation for the benefit of the economy and Nigerians.
He said the workshop was the first edition of enlightenment series conceived to educate personnel in the ministry on the operations of agencies under the ministry.
Wabote promised to deliver a report on the workshop to the Head of Service of the Federation and expressed hope that other ministries would inaugurate similar programmes and use them to build an informed and reformed civil service.