A Review of the Nigerian Energy Industry

NCDMB, NNPC to deepen Nigerian Content in downstream, TAM of refineries

25 August 2012, Sweetcrude, Abuja – A renewal of the partnership between the Nigerian Content Development and Monitoring Board (NCDMB) and the Nigerian National Petroleum Corporation (NNPC) will deepen integration of Nigerian Content into downstream operations of the Oil and Gas Industry, including the turn-around maintenance planned for the nation’s three major refineries within the next two years.

This was agreed when the Board received the top management of NNPC led by the Group Executive Director, Refineries and Petrochemicals, Engr. Anthony Ogbuigwe at its headquarters in Yenagoa, Bayelsa State recently.

Speaking at the meeting, the Executive Secretary, NCDMB, Engr. Ernest Nwapa charged operators in the downstream sector of the Oil and Gas industry to comply with the Nigerian Oil and Gas Content Development (NOGICD) Act, so as to engender job creation, spur local equipment manufacturing, retain spend, transfer technology and deliver other benefits of implementation.

He noted that appreciable progress had been achieved in the upstream sub-sector of the industry where the Board has set up an effective process for interfacing with operators and service companies to positively influence their activities, pointing out that a similar model needed to be worked out for the downstream.

To achieve this, Nwapa said institutional synergies must be enhanced at strategic levels, where the Board will be able to obtain the subsector’s long term plans, so as to identify opportunities, devise programmes and interface points that will best grow Nigerian Content in the downstream without disrupting operations.

He further explained that certain capacities the Board had grown in the upstream subsector could be utilized for downstream operations, including the turn-around maintenance of refineries, but this could only happen if the Board is endowed with the subsector’s strategic and operational plans.

Giving a brief of the Board’s mandate and implementation model, the Executive Secretary reported that the Board had on the back of demands from upstream operations successfully attracted original equipment manufacturers like Siemens, ABB, Endress & Hauser, General Electric and GCA, Neway and others to set up plants in Nigeria, adding that Shell had already announced strategic support to some of the OEMs.

According to him, three pipe mills being planned for Nigeria by WSP, Yulong and Vigeo are entering construction phases while SCC, the existing pipe mill in the country is now being patronized by the operating companies.

He further charged the NNPC team, which included the Managing Directors of the three existing refineries and other top echelon of the directorate to work out the demands of their companies for heat exchangers, valves and other components needed for regular maintenance of the refineries and petrochemical plants.

Such demand profiles, Nwapa explained, will strengthen the business case the Board had built for the establishment of manufacturing facilities and other capacity building efforts to support industry operations.

He remarked that this was the first time top management of NNPC was formally engaging the Board in Yenagoa since the enactment of the Nigerian Content Act, adding that this collaboration was essential to achieve the Nigerian Content aspirations which were birthed and spearheaded by the NNPC.

He said, “under the leadership of the Hon Minister of Petroleum Resources,
Mrs. Diezani Alison-Madueke, it is important to demonstrate to the industry that all stakeholders on the Government side are united in the pursuit of
Nigerian Content implementation. Whilst we have always taken NNPC’s support for granted, operational and practical buy-in of NNPC will provide the impetus required to do even bigger things in Nigeria.”

In his comments, the Group Executive Director, Refineries and Petrochemicals, pointed out that the downstream subsector had witnessed substantial Nigerian Content growth in the past, but his team wanted such developments to be structured, expressing hope that collaborating with the Board will help realize this.

Ogbuigwe regretted that the nation’s refineries had not undergone proper maintenance in many years, adding that a lot of rehabilitation was being scheduled within the next 24 months to bring them to efficient performance levels.

He assured that the turn-around maintenance projects will have high Nigerian Content values, adding that the original manufacturers of the refineries who the Federal Executive Council had approved to handle the jobs had been directed to compulsorily use local engineering firms, support companies and equipment for the exercise.

The NNPC under the headship of Engr. Funso Kupolokun had structured the push for Nigerian Content in the Oil and Gas Industry and created the Nigerian Content Division in 2005.

The Corporation introduced and implemented the Nigerian Content Directives in the industry, contributed to the drafting of the Nigerian Content Bill and pushed stridently for the passage of the Bill by the National Assembly.

In this article

Join the Conversation