A Review of the Nigerian Energy Industry

Stakeholders seek linkages of local content to Nigerian economy

27 October 2015, Lagos – Experts in Nigeria’s oil and gas industry have called on the Nigerian Content Development and Monitoring Board (NCDMB) to move a step further and ensure that the implementation of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act of 2010 would generate direct benefits to the larger economy of Nigeria.

Executive Secretary, Nigerian Content Development and Monitoring Board, NCDMB, Denzil Kentebe.
Mr. Denzil Kentebe, Executive Secretary, NCDMB .

The industry stakeholders, who spoke separately at the recent 5th Practical Nigerian Content Conference held in Yenagoa, Bayelsa State acknowledged that a lot of progress has been made in the implementation of the Act in the oil and gas industry but argued that the implementation of the NOGICD Act should not be limited to the oil and gas industry alone.
The Chairman of the Petroleum Contractors’ Trade Section and Managing Director of Schlumberger Nigeria Limited, Mr. Andrew Olotu said in the areas of capacity building and transfer of knowledge, a lot had been achieved in the implementation of the Act but stressed that linkages should be established between the oil industry and the entire economy.
According to him, the vision of those who promoted the Nigerian Content 37 years ago was to use the oil and gas industry to develop local infrastructure.
“When Mr. A says that he wants oil block, that is okay but he must build a refinery, say in Yenagoa or a power plant. That was the vision of the original promoters of Nigerian content. When it comes  to within the oil and gas industry, we have done much but we need to do more in the economy. We have done more in the area of transfer of Knowledge but that is a baby step because it is still within the oil and gas industry. We should not be addressing the industry alone. We need to look at the larger economy because the oil and gas industry does not create jobs. It is just an enclave, which must be broken in order to generate employment. When you have a population of 170 million people and the rate you generate job opportunities is low, you are bound to generate problems,” Olotu explained.
“We should avoid Dutch disease – that is, neglecting other sectors of the economy because we discovered cheap oil,” he added.
The Executive Secretary of the NCDMB, Mr. DenzilAmagbeKentebe said the country had passed the stage where foreigners were coming into Nigeria to take over the oil and is now at the stage where there is indigenous participation.
“Right now, we have indigenous participation in asset ownership; we are going to make sure that they have that 100 per cent in the next 10 years. We are going to make sure that structures are established where we can do fabrications in-country,” he said.
Kentebe, however allied his views with the presentations of other stakeholders, stressing that that it would be a mistake to limit the local content Act on only the oil and gas industry.
“We should incorporate it in all aspects of the economy so that we can have local content in all aspects of the Nigerian economy. Yes, oil is our mainstay, but you can see now that they have drilled oil to the extent that others have found shale oil. So, if we begin to look into other areas and begin to develop a capacity in others, then it will boost the economy,” he added.
In his speech, a former Chief Executive Officer of National Oil Corporation of Kenya, Mr. MwendiaNyaga stated that East African countries of Kenya, Uganda, Mozambiqu and Tanzania would learn from Nigeria to avoid Dutch disease.
Nyaga, who is the Chief Executive Officer of Oil and Energy Services, Kenya, argued that though Kenya does not have a lot of solid minerals and has not started developing its oil and gas resources, the country would not abandon other aspects of the economy when it starts producing oil and gas.
“I am happy today because I keep hearing about integration of oil and gas in other sectors of the economy.   We don’t have a lot solid minerals and oil and gas was just discovered the other day and we have not started production. But, we are beginning to see that the day we start to develop our oil and gas resources, people are going to forget other sectors of the economy and where we are coming from and focus on oil and gas. How do we integrate oil and gas into the economy? I am happy that I am hearing it today,” Nyaga explained.
The pioneer Executive Secretary of the Nigerian Content Development and Monitoring Board (NCDMB), Mr. Ernest Nwapa stated that Nigeria’s success in the implementation of the Nigerian Content Act has made the country the centre piece in the oil and gas industry around the world.
“I was with the Executive Secretary last week in London and Nigeria was the centre of attraction – the processes we have developed and the issues we have addressed over the last few years are the issues the global local content are trying to develop,” Nwapa added.

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