IOCs Chief Executives back Nigerian Content implementation

26 October 2011, Sweetcrude, Yenagoa – Chief Executives of international operating oil companies in Nigeria have embraced key initiatives being implemented by the Nigerian Content Development & Monitoring Board.

The CEOs endorsed the programmes during their quarterly meeting with the Executive Secretary of NCDMB, Ernest Nwapa held last Tuesday at the Board’s headquarters in Yenagoa, Bayelsa State.

The programmes included the Indigenous Marine Vessels Utilisation Strategy, Offshore Rigs Acquisition Strategy, Equipment Components Manufacturing Requirements and Establishment of Line Pipe mill

Others are the Nigerian Content Development Fund, the Proposed Engagement Model with Ministries and Departments and Nigerian Oil & Gas Industry Content Joint Qualification Systems.

The CEOs at the meeting included the Managing Director of ExxonMobil Nigeria, Mr. Mark Ward; Chevron Nigeria, Mr. Andrew Fawthrop; Addax Nigeria, Mr. Cormelis Zegelaar; SNEPCO, Mr. Chike Onyejekwe; Total, Mr. Guy Maurice, and Nigerian Agip Oil Company, Mr. Ciro Antonio Pagano.

In his presentation, the Executive Secretary appreciated the collaboration operating companies had extended to the Board in the past 16 months of implementing the Act.

He canvassed for the deepening of collaboration at all levels and common understanding of the Act’s provisions, without which all industry stakeholders would suffer.

According to him, the structured implementation of the Nigerian Oil & Gas Industry Content Development Act has been judged as effective by various stakeholders, such that managers of other key sectors of the economy have started to adopt the philosophy.

He stressed that the Oil & Gas Industry had the capacity to encourage the development of local capacity, ownership of equipments, utilization of local facilities in the execution of jobs, thereby creating a revolution in the Nigerian economy.

Nwapa warned that unless the IOCs patronize local service companies and help them build capacity with which to execute jobs in Nigeria and employ the citizenry, they will continue to put pressure on international operating companies to employ them.

He regretted that most operating companies judge their Nigerian Content performance by the volume of contracts they award to Nigerian entities whereas most of such jobs get executed abroad and with tools leased from foreign companies, thereby exporting most of the spend.

He also rued the low patronage of indigenous marine vessels by the international operating companies, noting that the industry spends approximately $4bn annually, but nearly 80 per cent of the spend end up abroad.

The industry, she said, should commit to the Vessel Replacement Strategy developed by the Board, which will see Nigerians owned Anchor Handling Tug Supply (AHTS) and Platform Supply Vessels (PSV) replace foreign owned vessels.

To ensure the success of the Offshore Rigs Acquisition Strategy, Equipment Components Manufacturing Requirements and Establishment of Line Pipe mills, Nwapa challenged the industry to “take steps that demonstrate that we are going to get to the expected target in 2015.

“If we give a top down directive, it will create a revolution and that is how we will move from where we are now to what the Act requires.”

On the NJQS, the Executive Secretary explained that it is ready for launch and clarified that rather than serve as a contracting tool, the NJQS will help track developments in the industry and enable the industry make informed decisions.

eHeHeHe He also advised the CEOs to ensure that their companies follow due process if must remove Nigerians from their positions.

He criticized recent developments in the industry where companies sack experienced Nigerians who have built capacity over the years while at the same making large applications for expatriate quota positions to the Board under the guise that there is lack of experienced Nigerians to occupy certain positions.

Nwapa said the Proposed Engagement Model with Ministries and Departments will help address policy inconsistencies and common issues impacting implementation of Local Content in the Oil and Gas Industry.

The committee is proposed to be made up of the Minister of Petroleum, Transport, Finance, Trade and Investment, Transport and Interior.

In his comments, the Managing Director of Addax, Mr. Cormelis Zegelaar assured that his company will support the implementation initiatives pursued by NCDMB.

He said, “We are adding smaller vessels and we should be able to ensure that a significant part are Nigerian owned. We are already using pipeline barges operated by Nigerian contractors which we will support to ensure that they work. Capacity building is something we should improve on. We already discussed this at our head office and our people are positive about that, creating internal capability that will allow us to do more work in Nigeria.”

Similarly, the Managing Director of Chevron Nigeria, Mr. Andrew Fawthrop commended the efforts of NCDMB and charged government to provide necessary infrastructure that will support building Nigerian Content.

Also, the Managing Director of ExxonMobil, Mr. Mark Ward assured that the leadership of the operating companies are committed to growing Nigerian Content as it will be in their collective interests.

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