Dr. Ginah O. Ginah is the General Manager, Corporate Communications and Zonal Coordination at the Nigerian Content Development and Monitoring Board (NCDMB). In this interview with Valuechain in Abuja, during the recent capacity building workshop put together by the board for media stakeholders, he spoke on issues ranging from energy transition to the role being played by NCDMB to deliver on the Federal Government’s aspiration of successfully making natural gas become the nation’s baseline fuel on the energy transition journey towards a zero-carbon future. Excerpts:
‘Sustaining Nigerian Content Amidst Shifting Energy Landscape: The Role of the Media’ was the theme for the workshop. What informed the choice for this theme?
For Nigeria and Nigerian content we are in a hurry, we are in a hurry because the first 50 years of oil and gas exploration and production was wasted; we wasted them because most of the revenue accrued from oil and gas production went to overseas, that capital flight estimated at more than $300 billion during those first 50 years. There are also other associated job and opportunity losses. We are now in the era of Nigerian content, and we have spent about 11 years, approximately one decade.
The first 10 years we were in a stable environment, as far as the oil and gas industry is concerned; we had oil and gas, all we had to do was to focus our Nigerian content strategies on it and to maximize the involvement of Nigerians, as well as Nigerian goods and services. But today the story is changing. The developed world is telling us that we cannot continue the way we’ve been going, that we should move to renewable energy. So, this has created an environment that is no longer stable because external factors have come in that can impact on the performance we have recorded in the past 10 years. If there is restriction even on one component, it will slow down Nigerian content, hence the development of the country as a whole.
That has made it imperative to recalibrate and appraise our processes and initiatives because the developed countries are telling us to move to renewables because they are definitely going to put some impediments on our progress if we continue the way we have been going before. I can tell you that demand for oil will be the first to be affected, and then gas. Because of this transitional period, we have to do an appraisal of how we will move forward. We’re saying our media stakeholders have become even more relevant now than in those past 10 years when the environment was stable.
So, happily for us, the President of Nigeria and our supervising minister, the minister of State for Petroleum Resources, have declared this decade the decade of gas. Why are we happy for that? For putting that much emphasis on gas, whatever we lose in terms of oil, we can now make up with gas so that at the end of the day, the overall material we will have to work with would not be compromised. We are now saying that in this crucial transition period, we need the media more to move from the traditional sensitization and informing the public of what we are doing to a more proactive advocacy role where they try to tell the story proactively so that people will see the need why the federal government and the NCDMB are now putting more focus on gas, because the federal government has made gas the transition energy source. We cannot jump into renewable right now because we are lagging behind in research as usual.
Why is gas considered the preferred transition energy source for Nigeria, and why is NCDMB keen on working with the media on this issue?
Our only credible solution is to use gas as our platform to renewable energy. Gas is cleaner and we have abundance of it, 206 trillion cubic feet (tcf) of proven gas reserves, and if you add the unproven you are going beyond 600tcf. So, we still have a huge mileage to use gas to transit and, in doing that, develop the country commercially, industrially, and agriculturally, especially considering the fact that sector agriculture provides a lot of employment opportunities for our people.
It’s a different message under an unstable environment, and the media practetioners will become even more important and that is why we have chosen the theme ‘Sustaining Nigerian Content in a Shifting Energy Regime: The Role of the Media.’ We are senstisizing the media on how to change the narrative to suit the direction that the Federal Government has chosen, which we are already supporting so that we will have the backing of even international stakeholders to see reasons why we have to use gas as our transition fuel. The NCDMB has already started that because in our signature behaviuor, once the Federal Government chooses a direction, we move fast. For example, in the area of modular refineries, we are already producing with Waltersmith Refinery and, for gas, I can count at least five projects that NCDMB has helped to kick-start.
NCDMB is driven by the belief that the world would witness energy mix or redistribution rather than an outright swap of fossil fuels to renewables. What gives the board such assurance that fossil fuels will still be relevant in the future?
Historically, we have seen that energy sources don’t just disappear overnight. For instance, coal has been around for thousands of years as a source of energy. It was around during the first industrial revolution right from the 18th to the 19th century, and as I speak with you, coal is still there. In fact, in countries of Asia, coal is still trending higher, despite all the negativity associated with coal, including environmental and health issues. So, it’s the same with oil and gas; it would not go away overnight, it will be here for decades because countries have different comparative advantages with different economics of production.
How does the board manage the seeming conflicting role of getting involved in commercial oil and gas projects and then being a regulator in the industry?
It doesn’t conflict in any way because Section 70(h) of our NOGICD Act (2010) clearly spells it out that NCDMB is to assist local contractors and Nigerian companies to develop their capacities and that is what we are doing. The commercial intervention is not for making profit; we are doing it for the Nigerian companies to be able to have the capacity to stand on their own, then we will now exit.
One of the major obstacles Nigerian companies have is finance. If you have every other thing but you don’t have finance, you cannot move. We come in, support the Nigerian company to stability, then pull out. The motive is in line with the Act and it’s to support Nigerian companies to the level where they have sufficient capacity to run on their own, then we pull out. We have modular refineries and gas projects that we are providing financial backing, and once they start running and become stable, we will pull out from them. The only area we have our own projects or investments are our NOGaPS or Nigerian Oil and Gas Parks Scheme NOGaPS. We are the ones building them 100 per cent and the idea is to spur production in-country.
NCDMB must have had its frustrations in the process of implementing the NOGICD Act (2010). With all the achievements recorded by the board in the last decade of its existence, what are the challenges you have also faced?
The first challenge was the lack of capacity on the side of Nigerian companies and Nigerians. When we started, there was no capacity; we had little or no Nigerian-owned marine vessels, so implementing Nigerian content without capacity on the Nigerian side was very difficult. We had to quickly and ingeniously ramp up capacity of Nigerians and Nigerian companies. We now have Nigerian oil companies that are working as foreign companies, just like Shell, in other African countries like Ghana, Angola and elsewhere. We have built capacity to the level that our AKK pipeline is now being handled by Nigerian companies, and we also have NLGN Train 7 being handled by Nigerian companies.
I can say to a large extent that we have crossed the issue of capacity and, now, we are left with the issue of funding for a lot of the Nigerian players in the oil and gas sector. Even when you have capacity to perform, most times you still need loanable funds. Like you already know, we have that covered. We have accessable loanable fund scheme at the Bank of Industry (BOI) for the purpose of disbursing to deserving Nigerian companies.
Then, the next challenge is projects. Without projects, there can be no Nigerian content because it’s on the back of projects that you can practice Nigerian content. So, as the projects are coming, our Nigerian content level is increasing. We are on track in achieving our target of 70% local content by the year 2027, as we are already on 42%. With new projects coming and our new focus on gas projects, I think we will achieve that target.
Despite the outbreak of Covid-19 and its impact in the last 2 years, you have still been able to carry on with several intervention projects or initiatives. What is the secret behind these achievements?
It is leadership; we have a dynamic leader in the person of Engr. Simbi K. Wabote. During the lockdown period and, in fact, most of the time, we were working. He is the busiest Executive Secretary in Africa (laughter). The leadership is working fully, that is how we have been able to continue to achieve as if Covid-19 never happened and we’re still ramping up. As you can see, every day there is news about something new that we are coming up with. Now, the focus is on gas and we are pushing endlessly for these projects to come to fruition.
In 2022, most of these gas projects would start production. A number of modular refineries will also come on stream and even our research and development initiatives will start yielding results because we have already identified some initiatives that we intend to push to commercialization.
