*To categorize local content champions
18 April 2016, Sweetcrude, Abuja – The Federal Government is set to cut the contracting cycle in the Nigerian oil and gas industry from its current stretch of between two to four years to just six months, the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu has said.
The minister stated this on recently in a speech he delivered at the stakeholders interactive workshop on Nigerian Content Policy organised by the Senate Committee on Petroleum Resources (Upstream) in Calabar, Cross Rivers State.
He identified the long contracting cycle as a major contributor to the high cost per barrel of the Nigerian crude oil compared to other OPEC member countries, listing other challenges to include multiplicity of bidders, application of manual tools in bid evaluation and divergent tender requirements by approving entities such as the Nigerian Content Development and Monitoring Board (NCDMB), National Petroleum Investment Management Services (NAPIMS) and the International Operating Companies (IOCs).
The Minister who was represented by the Group General Manager, (NAPIMS), Mr. Sajebor Dafe Stephen stated that the contract approving entities were already implementing his charge to strategize and develop a single contracting procedure which will soon be issued to the industry.
He also confirmed plans to categorize companies that have invested heavily in the economy and become local content champions for specific work scopes in a way that will facilitate contract opportunities. These measures he said, will enhance transparency and further boost investor confidence.
While noting that a good number of Nigerians had been motivated by the Nigerian Oil and Gas Industry Content Development (NOGICD) Act to acquire high cost marine vessels and oil rigs, the Minister assured that the Act’s provision of first consideration for Nigerian owned assets shall always apply in tenders related to utilization of rigs or marine vessels.
With the emergence of a new crop of indigenous owners of marine vessels, he stated that the new focus was on the local construction of vessels, adding that an assessment of shipyards was ongoing and government will provide incentives and enablers that will enable local yards to construct vessels at competitive cost.
While expressing gladness that some firms, including the Lagos Deep Offshore Logistics Base (LADOL) had accessed the Nigerian Content Development Fund (NCDF) for its ongoing fabrication and integration yard expansion, the Minister regretted the challenges faced by some other companies in accessing the NCDF.
He stated that government was currently reviewing the operating model for NCDF, adding that “it is my hope that the revised model will see increasing number of Nigerians accessing NCDF for commercial and developmental interventions.”
Speaking further, Kachikwu charged Nigerians to keep faith with the Local Content policy as an instrument for the industrialization of our economy, noting that other prosperous jurisdictions succeeded because they adopted their preferred development policies and sustained the programs for long periods.
He challenged the National Assembly to consider the possibility of expanding the provisions of the Nigerian Content Act to other sectors of the economy especially information and communication, automobile, construction and power for maximum socio-economic gains.
He further solicited the support of the private sector and the international community for Nigerian Content implementation, assuring that the Act is not intended to drive foreigners out of the industry but encourages domiciliation of industry activities in-country through genuine partnerships.