16 February 2017, Sweetcrude, Abuja – The Executive Secretary of the Nigerian Content Development and Monitoring Board (NCDMB), Engr. Simbi Wabote, on Monday, celebrated 100 Days in office. He spoke to some journalists in Yenagoa, Bayelsa State, on the achievements of the Board, and plans for the future.
I am pleased to address this press conference on the progress we have made so far since my appointment as the Executive Secretary of the Nigerian Content Development and Monitoring Board (NCDMB) on September 26, 2017 by President Muhammadu Buhari.
As many of you already know, I came to this assignment on the back of a long career in the Shell Group of companies in Nigeria and abroad, spanning a period of over 26 years. During this time, I held positions in Engineering services, Contracting & Procurement, Local Content Management, External Affairs and Community Affairs.
When I resumed office as CEO of NCDMB, I made a firm commitment to run an open and transparent organisation and to be upfront with information on the activities, programmes and even challenges facing the NCDMB. I am determined to remove opaqueness, rumours and insinuations often associated with oil and gas establishments.
This press conference was organised in furtherance of this commitment and there will be many more constructive engagements with the media as we go on the journey of reinvigorating the tempo of Nigerian Content Development and implementation for the benefit of our dear nation.
State of the industry
When I was appointed, some persons were concerned that the timing was challenging because of the crash in crude oil prices since 2014. Prices only began to recover gradually from November 2016. Within the period of slump, there has been very little industry activities as operators and government were finding it difficult to fund new projects while existing contracts were being renegotiated downwards. Without ongoing and new projects, there hardly can be Nigerian Content.
These challenges notwithstanding, I took on this job with the conviction that the low-price regime presents the Board and the entire industry with a wonderful opportunity to find ways of doing things differently and better.
Achievements to date
Ladies and gentlemen of the press, we invited you to share some of the achievements we have recorded since I have been on the saddle as the Executive Secretary. I will also announce some of the plans we have conceived to accelerate the implementation of Nigerian Content in the next four years.
On assumption of duty, I announced that the Board will conduct a baseline study on Nigerian Content implementation. This was intended to review how well we implemented the Act in the past six years, where we made progress and where we need to up the game. We have kicked off the project with the support of our consultants.
II.Community Content Guideline
We have developed a Community Content Guideline which provides pragmatic steps for incorporating and engaging community contractors as a critical delivery point for Nigerian content development.
This guideline was borne out of the necessity to boost peace and security in the Niger-Delta and address the lingering squabbles between host communities and operating and service companies over participation in oil and gas activities. Sections 25, 26, 27 and 28 (1) & (2) of the Nigerian Content Act provides for the operator to maintain a level of presence in communities where projects are located. The sections also mandate participation of community entrepreneurs in activities of operations throughout projects life cycle.
As you may recall, President Muhammadu Buhari launched the Petroleum Industry Roadmap on 27th October 2016 to revitalize the Oil and Gas industry. A key component of the Petroleum Industry Roadmap is to “Deploy 30% of business opportunities from operating companies to communities.” The Board’s Community Content Guideline sets out strategies to realize this target.
We have also already aligned our Capacity Development Initiatives to support the delivery of the aspirations encapsulated in the Petroleum Industry Roadmap.
III.Streamlining of the Contracting Cycle
When I assumed office I took on the lingering issue of protracted contracting cycle in the industry. With support from my team we have put in place internal performance measures to fast track the contract processing time from NCDMB’s end. We have committed to specific timelines for review of Nigerian Content plans, technical & commercial evaluation and issuance of Nigerian Content certificates
It is my belief that other agencies involved in the contracting cycle are working on their internal processes so that we can collectively work together to reduce the protracted contracting cycle, which has been identified as the main cause of the high cost per barrel of Nigerian crude in comparism to other OPEC countries. It will also help revitalize the tempo of Nigerian Content implementation as investors begin to develop more confidence in the Nigerian business environment.
The inauguration of the Board’s Governing Council by President Muhammadu Buhari (GCFR) on November 18, 2016 is another major achievement. With the Council in place and the calibre of members of the Governing Council, the Board is well positioned to fast track implementation of its flagship projects, like the Nigerian Oil and Gas Parks Scheme (NOGAPS), Polaku Pipemill and accelerated disbursement of the Nigerian Content Development Fund (NCDF) to deserving oil and gas service companies.
V. NIMASA/NCDMB Committee
The period also saw the reconstitution of the joint committee with the Nigerian Maritime Administration and Safety Agency (NIMASA) on local content development in shipbuilding. The committee’s work is to ensure that Nigerians take full advantage of opportunities in the marine services sector of the oil and gas industry. Often times, government policies fail because of overlapping functions and territorial rivalries between agencies. This committee provides a platform for both agencies to collaborate and achieve capital retention and in-country value addition in the marine sector of the oil and gas industry.
VI.New Guidelines for Accessing Nigerian Content Development Fund (NCDF)
One question I have had to answer repeatedly in the last 100 days has to do with the Nigerian Content Development Fund (NCDF). In the last seven years, the NCDF has grown to nearly $600 million but only three service companies successfully accessed the Fund.
Despite the healthy growth of the Fund, we are frustrated that it has not significantly addressed the purpose for which it was established by the Act.
Within the last 100 days, we have worked on various strategies geared to improve access to the Fund. The Minister of State for Petroleum Resources, Dr. Emmanuel Ibe Kachikwu and other members of our Governing Council are even more determined to quickly deploy this Fund to good use. We are hopeful that clear modalities that will guide the utilization of the Fund will be out within the next 100 days.
A few days ago the Board organised a workshop in Lagos to clarify the channels for remitting the one percent NCDF funds. At the forum, we made it clear that Oil and Gas Companies that default in their deduction and remittance of one percent of the value of contracts they executed in the upstream sector will henceforth be disqualified from participating in tenders for new contracts.
We also announced plans to conduct a forensic audit of the industry to track and recover due payments on the NCDF held by some companies.
VII. Conclude HR process review and institute performance driven work
With the period, the Board commenced a review of its HR processes with a view to enhancing employee development and performance delivery. The exercise is central to motivating and aligning employees to deliver on the Board’s regulatory mandate.
Ladies and gentlemen of the press, we have set clear targets for ourselves going forward and some of them include.
1.Develop 5-Year Strategic Road Map
Like Indicated earlier, we commissioned a baseline study. The outcome will help us develop a 5-year strategic road map that will guide the new wave of Nigerian Content development and implementation. The Road map will also enable the Board incorporate the Federal Government’s policies captured in the Petroleum Industry Roadmap and other change initiatives of the current administration.
2.Fast track NOGAPS.
Most of you are aware that NCDMB is developing Oil and Gas Parks in Ogbia, Bayelsa State; Oguta in Imo State; Okoyong in Cross Rivers State and Ikwe-Odio in Akwa Ibom. The Board has acquired sites for these parks. This year, we would fast track actual construction. Each of these five parks is expected to create about 2,000 direct and indirect jobs and link community entrepreneurs to the oil and gas supply chain. The Board’s strategy is to engage stakeholders especially IOCs and multinational service companies to support some aspects of the infrastructural development.
3.Hold Nigerian Content Opportunities Fair
In March this year, the Board will organise a Nigerian Content Opportunities Fair. The objectives are to showcase opportunities in upstream, midstream and downstream sectors and present available capacity in-country. The fair will enable Nigerian companies and manufacturers to tailor their business development strategy towards exploiting the opportunities thereby increasing value retention. It will provide multinationals the opportunity to link up and utilize in-country capabilities as against importation of goods and services.
4.Progress Polaku Pipemill
The Polaku Pipemill is one of the Board’s legacy projects. To ensure that it takes off, the Board is about to finalize a Memorandum of Understanding with Titan Steel, who are the new investors on the project. Meanwhile, the construction of the dedicated access road to the site has exceeded 45 percent. We have also conducted Public Hearing on the Environmental Impact Assessment for the project as required by law.
5. Hold Research & Development Fair
The Board is also planning to organise an R&D fair where researchers, inventors and stakeholders will showcase their research findings and breakthroughs. There are number of research breakthroughs in the industry; some are patented while others are not. The R&D fair is planned for June 2017 as part of our strategies to ensure that industry research problems are solved in Nigerian universities and research centres thereby growing our capacities and retaining the huge spend industry stakeholders expend on research overseas.
6.Expand compliance oversight to midstream and downstream
The focus of the Board compliance monitoring had focused largely on the upstream sector operations of the industry, mainly because of the higher percentage spend in the sub-sector. In 2017, we have reorganised our monitoring structures and will pay much more attention to the implementation of Nigerian Content in the midstream and downstream sectors of the industry.
Role of the Nigerian in Nigerian Content Development
In closing, I want to stress that the media have a strategic role to play in Nigerian Content development. Primarily, the media is expected to highlight the achievements the Board and other stakeholders have recorded in the implementation of the Nigerian Content Act and their contribution to the national economy. This will help convince industry players who are yet to adopt Nigerian Content as a business model.
Similarly, we need the media to publicise our programmes and initiatives so we can increase stakeholders understanding and commitment.
It is also important for the media to play its watch dog role on Nigerian Content and expose non-compliance by operating and service companies.
Lastly, we also expect the media to support the Board by pointing out areas of improvement in our operations. On our part, we will continue to collaborate with the media and support the practitioners through every means within our disposal.