By Gideon Osaka
There is no denying the fact that when the success story of the Muhammadu Buhari administration will be told, it would be incomplete without reference to the contributions of a transformational, enigmatic leader in the person of Engr. Simbi Kesiye Wabote, the Executive Secretary of the Nigerian Content Development and Monitoring Board (NCDMB).
Appointed as the Executive Secretary, NCDMB by President Buhari on September 29, 2016 with his excellent performance during the first tenure earning him a much-deserved reappointment on September 25, 2020, Wabote has helped to place Nigeria’s local expertise in the world map of oil and gas operations, thereby, curtailing the stereo-typed reliance by Nigeria on expatriates.
Armed with a mandate to “maximise the share and participation of Nigerians in oil and gas activities; maximise the utilisation of Nigerian-made goods and services and Nigerian-owned assets,” and to “integrate oil-producing communities into the oil and gas value chain,” the NCDMB has since inception in 2010 recorded a quantum leap in local content administration. This quantum leap would not have been possible without the stellar contributions of Engr. Wabote whose alias as Mr. Local Content in Nigeria is undisputeable.
Conceptualizing and Implementing 10-year Strategic Roadmap
One of Wabote’s first and most strategic initiatives back in 2017 after he assumed office was the development of the Nigerian Content 10-year Strategic Roadmap to provide the pathway for growing Nigerian content to 70% by 2027. After four years of implementing the roadmap, in-country value retention has increased remarkably from 26% to 42%. According to Wabote, this is one of the achievements he considers most strategic. In an interview published in the agency’s website to mark the achievements of the NCDMB under the current Executive Secretary. Engr. Wabote said “I think the most strategic for me is the development of the 10-Year Strategic Road Map. That to me is very strategic in the sense that taking over as the Executive Secretary of NCDMB, I needed to know where the organization was. I needed to ask myself, where do I want to take the organization to in the next 10 years? So, we then had to sit down, got a couple of consultants and evaluated the current state of the organization since it was established from 2010, up until 2016. What has it achieved? Has it achieved its objectives? Thereafter, we had to say, where do we want to be in the next 10 years? Which now gave us a clear roadmap on the things that we needed to do. So, for me, knowing where we are and trying to understand where we want to be, is the most strategic software issue that we’ve been able to achieve.”
Construction and Commissioning of NCDMB 17-storey Headquarters
The most visible accomplishment of Engr. Wabote is the completion of the Nigerian Content Tower 17-storey headquarters building within five years using an indigenous contractor. According to the ES, completing the agency’s 17-storey floor head office on record time, despite all the challenges, particularly COVID 19, was a strategic hardware achievement for him. “In four and half years’ time, we were able to complete that project and moved into that building, and currently, we’re using it. So, for me, those were extremely strategic if you want to ask me of the most strategic as it were.”
Modular Refinery Initiative
NCDMB under Wabote catalyzed the construction and completion of the Waltersmith’s 5000 barrels per day (bpd) modular refinery in Imo state, now in operation. NCDMB also invested in Azikel Group 12000 bpd hydro-skimming modular refinery in Polaku Gbarain Clan; Atlantic International Refinery’s 2000 barrels plant in Brass all in Bayelsa State and Duport Midstream’s 2500 bpd refinery in Edo State. The investments created over 3000 jobs in the refining value chain, ensured value addition to Nigeria’s crude oil, growth in domestic refining capacity to improve products availability, creation of jobs in-country and curbing of pipeline vandalism.
The investments in these modular plants tallies with one of the main objectives of local content in Nigeria which is job creation.
Wabote said: “If you look at Nigeria’s population that is growing exponentially today, we are about 206 million people. How do you create jobs for them? You have to also put a skin in the game.
“Today, we have equity investment in Waltersmith Refinery in Ibigwe, Imo State, where we are refining 5000 barrels of crude oil per day. We even built tanks within the refinery to store products but the demand is so much that we don’t even have products to store and that refinery, today, has in its direct employment, about 200 people and then, you multiply that with the indirect employment: truck drivers, filling stations and all that. The indirect effect is unimaginable.”
Enabling 50% domiciliation of $5bn NLNG Train 7 project, in-country integration of $21 Egina project
NCDMB under Wabote enabled the domiciliation of 50% of the $5bn NLNG Train 7 project. Over half of the project scope is being executed in-country by Nigerian vendors and is expected to create 12,000 jobs directly and engender peace in the Niger Delta region.
If extrapolated in terms of the yearly spend before now in the industry, about $21 billion was expended year-on-year in the oil and gas industry but today, the NCDMB interventions have clawed back $7 billion of industry spend into the country yearly. A typical example, according to Wabote, is the Egina project. Egina which is almost $21 billion, majority of the fabrication was done in-country (by Nigerian companies) including topside integration, which was never done in Africa.
The execution of Total’s Egina floating production storage and offloading (FPSO) deep water project, given the scope of the multi-billion dollar naira contract, illustrates of how advanced and dependable Nigerian service companies have become under the current leadership of the Board. Based on clauses introduced by the NCDMB into the Nigerian Content Plan, stipulating that the FPSO vessel, which was built in South Korea, must be integrated in Nigeria, Samsung Heavy Industries and LADOL undertook to build the US$300 million SHI-MCI Yard in Lagos, the first of its type in the Gulf of Guinea. Six of the topside modules of the FPSO vessel had to be fabricated by Nigerian companies, including Nigerdock, Aveon Offshore, and FMC. In addition, paints to be used for the vessel had to be procured from companies in Nigeria and shipped to the shipbuilders in South Korea. The Offshore Loading Terminal (OLT) buoy was similarly fabricated in Nigeria by Aveon Offshore.
Wabote said: “Egina is the largest FPSO in the country today – 200,000 barrels of oil per day. That’s huge in terms of its production, and it was integrated here in Nigeria. So, we have clawed back almost $7 billion. Our aim is to get $14 billion into the country with regards to our 70 per cent target by 2027.
In ways that might not be obvious to analysts outside the industry, the significant inroads of Nigerian service companies into oil and gas operations and consequent increase in the utilisation of local inputs are steadily driving down costs that should reflect in lower expenditure in production operations. In other words, the cost per barrel of crude which, until recently, was within the brackets of $15 to $17, as explained by the Nigerian National Petroleum Company Limited Group Chief Executive Officer, Mele Kyari, would drop gradually to the $10 per barrel target of the Federal Government.
Creation of $500m intervention fund
The NCDMB under Engr. Wabote created a $200 million Nigerian Content Intervention (NCI) Fund which it later expanded to $500m managed by the Bank of Industry and NEXIM Bank to provide affordable credit to Nigerian oil and gas service companies and community contractors with single digit interest rate. Through this intervention, the Board has effectively addressed the challenge of lack of affordable capital which hampered growth and development of many indigenous service providers.
The Board seeks to drive down cost of funds and enhance “local supply chain efficiency and competitiveness.” As of 2020, about 90 per cent of the Fund had been accessed and utilised under the management and supervision of the BOI. The Fund was increased to US$350 in the third quarter of 2020. As of early 2022, over US$500 million has been dispensed under the Fund.
Project 100 Initiative
The vision of Engr. Simbi Kesiye Wabote to pull indigenous operating and service companies from the fringes of the oil and gas industry to the centre, competing meaningfully with their international counterparts in every segment of the oil and gas value chain- gave birth to what is today known as Project 100 Initiative. The Project 100 Initiative identified 100 oil and gas startups and deployed special institutional interventions for their incubation, maturation and growth into world class service companies.
For their incubation, maturation, and growth into “world-class service firms,” NCDMB focused on capacity building, adequate funding, and access to markets. Engr. Wabote pledged at the inception of the scheme that NCDMB would make the capacities and capabilities of the companies known to major project promoters and big Engineering, Procurement, Construction, and Installation (EPCI) for consideration wherever business opportunities existed.
The NCDMB has thus been at the forefront of the drive for markets for Project 100 Companies, beginning with the NLNG Limited to which they made recommendations for the Companies in a letter entitled, Introducing Project 100 Beneficiaries for Consideration on NLNG Projects. The NLNG Management emerged with a decision that at least 50 per cent of the $10 billion Train 7 Project would be executed locally. Today, most of the Project 100 Companies rank as successful service providers in the industry.
Across the oil and gas industry – upstream, midstream, and downstream – the plaudits for the NCDMB Executive Secretary are almost deafening and unceasing for the phenomenal transformation recorded in the six years of the Chief Executive in the saddle.
Indeed foreign and local including service companies in the oil and gas industry have been unstinting in their acclamation of the remarkable accomplishments of the NCDMB under the Management of its current Executive Secretary, Engr. Simbi Kesiye Wabote. The industry players are unanimous that the Board has lived up to the billing.
Country Chair, Shell Nigeria, Mr. Osagie Okunbor, is among key figures of the corporate world who are highly impressed with NCDMB’s implementation of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act.
“It’s been excellent. A lot of credit goes to the Nigerian Content Development and Monitoring Board and its leadership, the Executive Secretary and members of the board, the Minister, who is the chair of the board. I think all round, we have all embraced this Act.”
Former NLNG Managing Director/Chief Executive Officer, Engr. Tony Attah, had this to say on how Engr. Wabote facilitated the US$10 billion Train 7 Project: “The Executive Secretary worked assiduously to ensure that Train 7 became real. Without his personal support and commitment, we may not have Train 7 today. Train 7 means 12,000 jobs directly and based on the Board’s calculation, it is 40,000 additional jobs indirectly.”
He further said: “We have experienced the Executive Secretary very positively, and perhaps there is nobody else, at least in Africa, who understands Local Content more than he does. When he was a staff member of Shell Petroleum Development Company (SPDC), he was recognised and exported to Dubai to help them on Local Content. From Dubai, he went to Oman, to Brazil and he eventually came back to Nigeria. And it soon became obvious that he had to move to the national league.”
The Managing Director/CEO, MG Vowgas Group, Mr. Godwin Izomor, had this to say: “Accolades will … go specifically to our pragmatic and dynamic Executive Secretary, Engr. Simbi Wabote, and his team, for the giant strides achieved during his tenure. Without the NCDMB, we wouldn’t be where we are today as a company.”
Also among the many highly appreciative beneficiaries of the intervention by NCDMB under Wabote is Oilserv Limited, whose former Managing Director, Mr. Adegbite Falade, stated: “I must salute what the NCDMB has been doing and the giant strides that have been achieved in pushing the mandate of the NOGICD Act. In the course of the Board’s sensitisation programmes, we became aware of the NCI Fund…. We just had to follow the process and we were able to access US$10 million facility to support our business and the speed at which it was executed was part of what made us to feel it was a dream. The processes were concluded in 45 days.”
